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(Solved): 1. What I want to understand better is2. What makes it difficult for me to achieve my goal is3. What ...



1. What I want to understand better is
2. What makes it difficult for me to achieve my goal is
3. What I’m doing now to overcome the above challenge is
4. The main things I’ve recently learned are
5. The actions I need to take to reach my goal are
6. To reach my goal, the next action I will take is

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Most organizations find that organizing around either functions (in the functional structure) or products and geography (in the divisional structure) provides an appropriate organizational structure. The matrix structure, in contrast, may be very appropriate when organizations conclude that neither functional nor divisional forms, even when combined with horizontal linking mechanisms such as , are right for their situations. In matrix structures , functional and product forms are combined simultaneously at the same level of the organization. (See Figure 101․) Employees have two superiors, a product or project manager, and a functional manager. The "home" department-that is, engineering, manufacturing, or sales-is usually functional and is reasonably permanent. People from these functional units are often assigned temporarily to one or more product units or projects. The product units or projects are usually temporary and act like divisions in that they are differentiated on a product-market basis. Job design refers to the study of individual tasks in an attempt to make them more relevant to the company and to the employee(s). To minimize some of the adverse consequences of task specialization, corporations have turned to new job design techniques: job enlargement (combining tasks to give a worker more of the same type of duties to perform), job rotation (moving workers through several jobs to increase variety), job characteristics (using task characteristics to improve employee motivation), and job enrichment (altering the jobs by giving the worker more autonomy and control over activities). Although each of these methods has its adherents, no one method seems to work in all situations. A good example of modern job design is the introduction of team-based production by the glass manufacturer Corning Inc., in its Blacksburg, Virginia, plant. With union approval, Corning reduced job classifications from 47 to 4 to enable production workers to rotate jobs after learning new skills. The workers were divided into 14-member teams that, in effect, managed themselves. The plant had only two levels of management: The Plant Manager and two line leaders who only advised the teams. Employees worked very demanding -hour shifts, alternating three-day and four-day weeks. The teams made managerial decisions, imposed discipline on fellow workers, and were required to learn three "skill modules" within two years or else lose their jobs. As a result of this new job design, a Blacksburg team, made up of workers with interchangeable skills, can retool a line to produce a different type of filter in only 10 minutes-six times faster than workers in a traditionally designed filter plant. The Blacksburg plant earned a US million profit in its first eight months of production instead of losing the US million projected for the startup period. The plant performed so well that Corning's top management acted to convert the company's 27 other factories to team-based production. Some authorities in the field propose that the evolution of organizational forms is leading from the matrix and the network to the cellular (also called modular) organizational form. According to Miles and Snow et al., "a cellular/modular organization is composed of cells (self-managing teams, autonomous business units, etc.) which can operate alone but which can interact with other cells to produce a more potent and competent business mechanism. "This combination of independence and interdependence allows the cellular/modular organizational form to generate and share the knowledge and expertise needed to produce continuous innovation. The cellular/modular form includes the dispersed entrepreneurship of the divisional structure, customer responsiveness of the matrix, and self-organizing knowledge and asset sharing of the network. Bombardier, for example, broke up the design of its Continental business jet into 12 parts provided by internal divisions and external contractors. The cockpit, center, and forward fuselage were produced in-house, but other major parts were supplied by manufacturers spread around the globe. The cellular/modular structure is used when it is possible to break up a company's products into self-contained modules or cells and when interfaces can be specified such that the cells/modules work when they are joined together. The cellular/modular structure is similar to a current trend in industry of using internal joint ventures to temporarily combine specialized expertise and skills within a corporation to accomplish a task which individual units alone could not accomplish. The impetus for such a new structure is the pressure for a continuous process of innovation in all industries. Each cell/module has an entrepreneurial responsibility to the larger organization. Beyond knowledge creation and sharing, the cellular/modular form adds value by keeping the firm's total knowledge assets more fully in use than any other type of structure. It is beginning to appear in firms that are focused on rapid product and service innovation-providing unique or state-of-the-art offerings in industries such as automobile manufacture, bicycle production, consumer electronics, household appliances, power tools, computing products, and software. 58 The product-group structure of American Cyanamid enables the company to introduce and manage a similar line of products around the world. This enables the corporation to centralize decision making along product lines and to reduce costs. The geographic-area structure 50 of Nestlé, in contrast, allows the company to tailor products to regional differences and to achieve regional coordination. For instance, Nestlé markets 200 different varieties of its instant coffee, Nescafé. The geographic-area structure decentralizes decision making to the local subsidiaries. As industries move from being multidomestic to being more globally integrated, MNCs are increasingly switching from the geographic-area to the product-group structure. Nestlé, for example, found that its decentralized area structure had become increasingly inefficient. As a result, operating margins at Nestlé have trailed those at rivals Unilever, Group Danone, and Kraft Foods by as much as . Then CEO Peter Brabeck-Letmathe acted to eliminate country-bycountry responsibilities for many functions. In one instance, he established five centers worldwide to handle most coffee and cocoa purchasing. Simultaneous pressures for decentralization to be locally responsive and centralization to be maximally efficient are causing interesting structural adjustments in most large corporations. This is what is meant by the phrase "think globally, act locally." Companies are attempting to decentralize those operations that are culturally oriented and closest to the customersmanufacturing, marketing, and human resources. At the same time, the companies are consolidating less visible internal functions, such as research and development, finance, and information systems, where there can be significant economies of scale. Business process reengineering strives to break away from the old rules and procedures that develop and become ingrained in every organization over the years. They may be a combination of policies, rules, and procedures that have never been seriously questioned because they were department" to "Local inventory is needed for good customer service." These rules of organization and work design may have been based on assumptions about technology, people, and organizational goals that may no longer be relevant. Rather than attempting to fix existing problems through minor adjustments and the fine-tuning of existing processes, the key to reengineering is asking "If this were a new company, how would we run this place?" Michael Hammer, who popularized the concept of reengineering, suggests the following principles for reengineering: - Organize around outcomes, not tasks: Design a person's or a department's job around an objective or outcome instead of a single task or series of tasks. - Have those who use the output of the process perform the process: With computer-based information systems, processes can now be reengineered so that the people who need the result of the process can do it themselves. - Subsume information-processing work into the real work that produces the information: People or departments that produce information can also process it for use instead of just sending raw data to others in the organization to interpret. - Treat geographically dispersed resources as though they were centralized: With modern information systems, companies can provide flexible service locally while keeping the actual resources in a centralized location for coordination purposes. - Link parallel activities instead of integrating their results: Instead of having separate units perform different activities that must eventually come together, have them communicate while they work so they can do the integrating. - Put the decision point where the work is performed and build control into the process: The people who do the work should make the decisions and be self-controlling. - Capture information once and at the source: Instead of having each unit develop its own database and information processing activities, the information can be put on a network so all can access it. 59 Pioneered in the aerospace industry, the matrix structure was developed to combine the stability of the functional structure with the flexibility of the product form. The matrix structure is very useful when the external environment (especially its technological and market aspects) is very complex and changeable. It does, however, produce conflicts revolving around duties, authority, and resource allocation. To the extent that the goals to be achieved are vague and the technology used is poorly understood, a continuous battle for power between product and functional managers is likely. The matrix structure is often found in an organization or SBU when the following three conditions exist: - Ideas need to be cross-fertilized across projects or products. - Resources are scarce. - Abilities to process information and to make decisions need to be improved. Davis and Lawrence, authorities on the matrix form of organization, propose that three distinct phases exist in the development of the matrix structure: - Temporary cross-functional task forces: These are initially used when a new product line is being introduced. A project manager is in charge as the key horizontal link. J\&J's experience with cross-functional teams in its drug group led it to emphasize teams crossing multiple units. - Product/brand management: If the cross-functional task forces become more permanent, the project manager becomes a product or brand manager and a second phase begins. In this arrangement, function is still the primary organizational structure, but product or brand managers act as the integrators of semipermanent products or brands. Considered by many a key to the success of , brand management has been widely imitated by other consumer products firms around the world. - Mature matrix: The third and final phase of matrix development involves a true dualauthority structure. Both the functional and product structures are permanent. All employees are connected to both a vertical functional superior and a horizontal product manager. Functional and product managers have equal authority and must work well together to resolve disagreements over resources and priorities. Vodafone, British American Tobacco, Boeing, and Philips are examples of companies that use a mature matrix. example of what could be termed a "non-structure" because of its virtual elimination of in-house business functions. Many activities are outsourced. A corporation organized in this manner is often called a virtual organization because it is composed of a series of project groups or collaborations linked by constantly changing nonhierarchical, cobweb-like electronic networks. The network structure has been enabled by the rapid development of Internet-based tools that allow collaboration without physical presence. Rather than satisfying a company's needs with locally available people (or paying to relocate people) more and more companies utilize a network structure to get the best and brightest. This structure is also quite useful when the environment of a firm is unstable and is expected to remain so. Under such conditions, there is usually a strong need for innovation and quick response. Instead of having salaried employees, the company may contract with people for a specific project or length of time. Long-term contracts with suppliers and distributors replace services that the company could provide for itself through vertical integration. Electronic markets and sophisticated information systems reduce the transaction costs of the marketplace, thus justifying a "buy" over a "make" decision. Rather than being located in a single building or area, the organization's business functions are scattered worldwide. The organization is, in effect, only a shell, with a small headquarters acting as a "broker," electronically connected to some completely owned divisions, partially owned subsidiaries, and other independent companies. In its purist form, a network organization is a series of independent firms or business units linked together by computers in an information system that designs, produces, and markets a product or service. Developments in information technology are changing the way business is being done internationally. See the Global Issue feature to learn about the latest issue related to international outsourcing of IT.


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