Organizational Structure, Strategy, and Ethics in Business

What is the primary purpose of an organization's structure?

To support and facilitate good strategy execution.

What are the four levels of strategy in organizations?

Corporate, Business, Functional, Operating.

What must be created between strategy and the external environment for effective execution?

FITS (alignment).

What are the three components of building a capable organization?

Control, coordination, and motivation.

What does the term 'structure' refer to in an organization?

How the firm is organized, including reporting relationships, coordination, authority, and responsibility.

What happens to organizational structure when a new strategy is introduced?

It typically requires reassessment and changes to the structure.

What are the basic structural arrangements in organizations?

Simple, Functional, Geographic, Multidivisional, and Strategic Business Units (SBUs).

What characterizes a functional structure for a cost leadership strategy?

Operations is the main function, with a mechanical structure and highly structured job roles.

What characterizes a functional structure for a differentiation strategy?

Marketing is the main function, with an organic structure and less formalization to foster change.

What is a key implication of organizational structure?

Appropriate structure depends on the firm's strategy.

What is the role of coordinating mechanisms in organizational structure?

To support implementation through cross-functional teams and networking arrangements.

What is the significance of formalization in organizational structure?

It helps control, coordinate, and motivate employees and their activities.

What does a traditional functional organizational structure typically include?

Departments such as Research & Development, Manufacturing, Human Resources, Engineering, Marketing, and Finance.

What is the difference between a simple structure and a multidivisional structure?

A simple structure is less complex, while a multidivisional structure organizes different business units under a corporate umbrella.

What is the importance of modifying basic structural designs?

To match the structure to the strategy and ensure effective execution.

What are the eight components of the strategy execution process?

The specific components are not listed, but they relate to the action agenda for executing strategy.

What does the term 'formalization' refer to in organizational context?

The extent to which policies, procedures, and rules are established and followed.

What is the impact of internal politics on organizational structure?

It can influence how reporting relationships are arranged and how work is integrated.

What is a geographic organizational structure?

An arrangement where the organization is divided based on geographical locations.

What is the significance of authority and responsibility in organizational structure?

They define who makes decisions and who is accountable for outcomes.

What is Business Ethics?

The application of general ethical principles and standards to the actions and decisions of business organizations and their personnel.

What are the two contrasting views on ethical standards in business?

Universalism and Relativism.

What does Ethical Universalism propose?

That the most important concepts of right and wrong are universal and apply to all societies and cultures.

What is Ethical Relativism?

The belief that ethical standards vary by culture and society, meaning what is ethical can differ from one nation to another.

What is Integrative Social Contracts Theory?

A theory that combines universal ethical standards with local customs, asserting that more stringent standards should take precedence.

What are the three categories of management morality?

Moral Managers, Amoral Managers, and Immoral Managers.

What characterizes Moral Managers?

They are dedicated to high standards of ethical behavior personally and organizationally.

What is a common approach of Amoral Managers?

They do not pay attention to business ethics or believe that business and ethics do not mix.

What drives unethical strategies in business?

Immoral and amoral business practices, conflicting ethical standards, and pressures to meet earnings targets.

What is the Damage Control approach to managing ethical conduct?

An approach focused on preventing adverse publicity and using window dressing.

Why should company strategies be ethical?

Unethical strategies can damage reputation, make recruitment difficult, and are ultimately bad for business.

What is Corporate Social Responsibility (CSR)?

The duty of corporations to act as responsible citizens and promote the general welfare while avoiding harm.

What are the five components of a Corporate Social Responsibility strategy?

The specific combination of socially responsible endeavors a company chooses to pursue.

What is the Triple Bottom Line?

A framework that considers social, environmental, and economic impacts of a company's actions.

What does Sustainability in business refer to?

The relationship of a company to its environment and its use of natural resources.

What are Sustainable Business Practices?

Practices that meet present needs without compromising future generations' ability to meet their needs.

What is the moral case for CSR?

It is the right thing to do, and corporations have a duty to be good corporate citizens.

How can CSR benefit a company internally?

By increasing buyer patronage, reducing reputation risks, lowering costs, and enhancing employee retention.

What should link a company's strategy to its ethical principles?

Vision/Mission, Code of ethics, Core values, and Culture.

What is the role of communication in a company's ethical strategy?

It should influence and be part of the strategy, promoting ethical behavior throughout the organization.

What is the Compliance approach to managing ethical conduct?

Implementing a compliance system to control ethical behavior within the organization.

What is the Ethical Culture approach?

Using culture and peer pressure to promote ethical behavior among employees.

What is the significance of adhering to higher ethical standards?

It helps navigate the gray areas of cross-cultural ethics and maintains integrity.

What are the consequences of an unethical strategy?

It can lead to reputational damage, loss of customers, and difficulties in employee recruitment.

What should companies consider in their strategic actions?

The effects on employees, local communities, the environment, and society at large.

What is the importance of demonstrating social consciousness?

It reflects a company's commitment to being a good corporate citizen and enhances its reputation.

What is the primary focus of strategy implementation?

To put the strategy in place, execute it proficiently, and produce good results.

What does creating FITS refer to in strategic management?

Creating FITS between strategy and the external environment and within the organization.

What are the key issues addressed in strategy execution?

Control, coordination, and motivation issues.

What is the first component of the strategy execution process?

Allocating resources to the strategy execution effort.

How should resource allocation align with strategy?

Resource allocation should fit the strategy and support its execution.

What is zero-based budgeting?

A budgeting process that requires all expenses to be justified for each new period.

What are Standard Operating Procedures (SOPs)?

Formal, written instructions that specify a series of actions to achieve a given end.

How do policies and procedures facilitate strategy execution?

They standardize work behavior and help with control, coordination, and motivation issues.

What is the purpose of using process management tools?

To strive for continuous improvement and adopt best practices.

What is benchmarking in the context of process management?

The process of identifying, studying, and implementing best practices.

What does Business Process Reengineering (BPR) involve?

Radically redesigning and streamlining how an activity or business process is performed.

What is the goal of Total Quality Management (TQM)?

To enhance the quality of products and services through continuous improvement.

What is Six Sigma quality control?

A set of techniques and tools for process improvement aimed at reducing defects.

What is the significance of resource allocation in strategy execution?

It involves shifting resources to support new strategically critical activities.

What does the term 'historical process' refer to in resource allocation?

The traditional method of allocating resources based on past expenditures.

What is the relationship between policies and organizational behavior?

Policies govern how people act and lead to predictable behaviors within the organization.

What is the outcome of effective implementation of best practices?

Achieving quantum improvements in performance.

What does continuous improvement aim to achieve?

Ongoing enhancements in processes, products, or services.

What is the intent behind Business Process Reengineering?

To achieve major improvements in performance through radical redesign.

What are the key components of the strategy execution process?

Allocating resources, instituting policies, and using process management tools.

What is the role of technology in Business Process Reengineering?

To facilitate the redesign and streamline processes for improved efficiency.

What is the primary goal of a philosophy that emphasizes continuous incremental improvements?

To decrease costs and eliminate waste while enhancing quality and customer satisfaction.

What is Six Sigma?

A disciplined, statistics-based system aimed at having not more than 3.4 defects per million iterations for any business practice.

What are the key components of good information and operating systems?

They support all value-chain activities and include various types of Computer Based Information Systems (CBISs) like MIS, DBMS, TPS, DSS, e-commerce, and CRM.

How can mobilizing information and creating systems yield a competitive advantage?

By effectively using knowledge through data mining, data visualization, and data analytics.

What is a challenge in exercising control over empowered employees?

Ensuring their actions stay within acceptable bounds.

What are the two control approaches mentioned for managing empowered employees?

Managerial control and peer-based control.

What are some components of an effective reward system?

Monetary incentives like base pay increases, performance bonuses, and non-monetary incentives like praise and special recognition.

Why are rewards considered powerful in strategy implementation?

They win the commitment of company personnel to effective strategy execution.

What is corporate culture?

The shared values, ingrained attitudes, and company traditions that determine norms of behavior and accepted work practices.

What influences a company's culture?

Founders, influential individuals or work groups, policies, vision, and traditions.

How is a company's culture perpetuated?

Through traditions, supervisory practices, employee attitudes, and relationships with stakeholders.

What role does corporate culture play in strategy implementation?

It influences the organization's actions and approaches to conducting business.

What are some key features of corporate culture?

Values, business principles, approaches to people management, atmosphere, and peer pressures.

What is the importance of linking the reward system to performance outcomes?

It creates a results-oriented system that ties incentive compensation to relevant strategic and financial outcomes.

What is the significance of team-based work design in business practices?

It promotes collaboration and enhances the involvement and empowerment of employees.

What is benchmarking in the context of business practices?

The process of comparing business processes and performance metrics to industry bests and best practices from other companies.

What is the purpose of establishing boundaries in managerial control?

To allow freedom to act within limits while ensuring actions remain acceptable.

What are some examples of non-monetary incentives?

Praise, constructive criticism, special recognition, and stimulating assignments.

How can a company ensure that its culture aligns with its strategic goals?

By defining jobs in terms of what to achieve and tying incentives to performance targets.

What is the relationship between corporate culture and employee behavior?

Corporate culture shapes the norms and behaviors expected from employees, influencing their actions and interactions.

What is the impact of a company's approach to people management on its culture?

It establishes the norms for how employees are treated and how they interact with one another.

How does a company's culture affect its external relationships?

It influences how the company interacts with stakeholders and manages external perceptions.

What is a key method for indoctrinating new employees into corporate culture?

Systematic indoctrination of new employees.

What is a characteristic of strong culture companies?

Conduct business according to a clear, widely-understood philosophy.

What do weak culture companies lack?

A widely-shared core set of values.

What are hallmarks of adaptive cultures?

Willingness to accept change and embrace challenges.

What is a characteristic of high-performance cultures?

A results-oriented work climate where people go the extra mile.

What defines unhealthy cultures?

Highly politicized, resistant to change, and inwardly focused.

Why is culture important in an organization?

Matching culture to strategy will improve performance.

What role do executives play in ethical culture?

Executives must provide genuine support for personnel displaying ethical standards.

What is one of the numerous roles of strategic leaders?

Culture Builder.

What is a sign of a weak culture in a company?

Little cohesion among departments.

What is a proactive approach in adaptive cultures?

Encouraging risk-taking, experimentation, and innovation.