1. Andrea Brandt Vanessa Gomes Rachele Reagan AllisonSchmidt

2.  Reconciling specialization with coordination and cooperation  The fundamental source of efficiency in production is specialization through the division of labor into separate tasks.  Henry Ford found huge productivity gains with his assembly line. Cutting the time to assemble the Model T from 106 hours to 6 hours in only two years.  Costs of specialization  More divided the process, the more complex the challenge of integrating the efforts of individual specialists  Leads to cooperation problem and coordination problem

3.  An Agency Relationship exists when one party (principal) contracts with another party (agent) to act on behalf of the principal  Issue: sometimes agent acts in his or her own interest and not the principal  EX: When management doesn’t act to maximize shareholder wealth.  Also an issue when departments have their own subgoals.

4.  Bureaucratic controls: (hierarchy) an ordered grouping of people with an established pecking order.  Those at the top, supervise and subordinates follow instructions  Common to hear criticism of bureaucracy: reduces the extent to which those lower down the organization can exercise their personal judgment about how to conduct work in certain circumstances  Performance Incentives: Link rewards to outputs  Benefits: they are high powered and economize on the need for costly monitoring and supervision  Must determine what constitutes desirable output  Can sometimes lead to inappropriate behavior

5.  Shared Values: some organizations achieve high levels of cooperation and low goal conflict because of shared values.  Management has been increasingly focusing on generating and maintaining shared cultures by clearly articulating the firms goals and the kind of behaviors and attitudes the firm wishes to encourage  Key strength: encourages an emotional attachment to the organization to internalize company values  Can also lead to informal pressure to conform. ▪ In 1999 Carly Fiorina took over as CEO of HP and found great resistance when trying to change existing company culture or “the HP way” eventually leading to her being replace in 2005 by Mark Hurd

7.  The desire to cooperate is not enough to guarantee that organizational members integrate their efforts, it is the lack of a common goal that causes teams to fail

8.  Rules and Instructions: the existence of rules and instructions allows managers to exercise authority by means of general rules and specific instruction  Routines: Activities are performed recurrently, coordination based on mutual adjustment and rules becomes institutionalized within organizational routines  Mutual Adjustment: the coordination with fellow team members without any authority relationship among them  Roles of these components depend on the activity being performed and the level of collaboration required for the activity

9.  The way an organization arranges its lines of authority and communications and allocates decision making power and responsibilities.

10.  Has been pushing towards decentralization since the nineties.  Two operating groups:  Bottling Investments  Corporate  Also operating groups divided by regions  Pacific, Eurasia & Africa, Europe, North America, Latin America  Coca Cola allows decisions to be made on a local level, allowing the regions to quickly respond to changing market demands while upper level management can focus on long term goals  In 2004 Neville Isdell began using more complex integrating mechanisms and did an overhaul on the intranet for a more real time sharing of information

11. Hierarchy Self-Organizing Team

12.  Coca Cola has experienced communication problems because of the tall hierarchies  Employees lacked clear goals  The use of the intranet greatly increases communication among all levels

13.  The question is what basis should individuals be assigned to organizational units within a firm.  Four principal bases for grouping employees are:  Tasks: group employees who do the same job or task  Products: for companies such as PepsiCo with three main product groups there would be groups for PepsiCo Beverages, Frito-Lay, and Quaker Foods  Geography: group stores or locations based on a region or an area  Process: combining task based functions and process based functions within an organization

14. Tasks: when and organization is not very diversified in relation to products and does not need to be differentiated by location but possesses strong functional specializations Products: when a company is diversified over many products and these products are substantially different in terms of technology and markets Geography: communication across distance is difficult, locality is important Process: when a process in a company corresponds to a individual product or is dominated by a single task

15.  The Functional Structure: single-business forms tend to be organized along functional lines, promoting learning and capability building and deploying standardized control systems  Con: makes cross functional integration difficult  Multidivisional Structure: Product based and has potential for decentralized decision making, allows business level strategies and operating decisions to be made at divisional level  Matrix Structures: structures that formalize coordination and control across multiple dimensions  Good for companies that embrace multiple products, functions, and locations

16.  Adhocracies: an organization with shared values, motivation and willingness to participate, mutual respect and communication effectiveness  Team-Based and Project-Based Organizations: allows flexibility and adaptability in project-based organizations  Networks: Localized networks of small closely interdependent firms

17.  A focus on coordination rather than control: the structures focus almost wholly upon achieving coordination  Reliance on coordination by mutual adjustment: dependence on volunteer coordination through bilateral and multilateral adjustment  Individuals in multiple organizational roles: individuals switch their organizational roles and occupy multiple roles simultaneously

18.  Provide the mechanisms of communication, decision making and control that allow companies to coordinate and integrate activities

19.  Information Systems: Collect, organize and communicate financial information to top management and other parts of the organization  Strategic Planning Systems: important method for achieving coordination within a company. The strategic plan is often made up of the following  Statement of goals  Set of assumptions or forecasts  Qualitative statement  Specific action steps  Financial projections

20.  Financial Planning and Control Systems: primary mechanism through which top management seeks to control the company  Capital Expenditure Budget: established through both top-down and bottom-up processes.  Operating Budget: pro forma profit and loss statement for the company as a whole, individual divisions and business units for the next year  Human Resource Management Systems: an incentive system that promotes the implementation of plans and targets by aligning employee and company goals and ensuring employees have the skills necessary for his or her job

21.  Organizational Culture: “A pattern of shared basic assumptions that was learned by a group as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way you perceive, think and feel in relation to those problems” –Edgar Schein  Corporate Culture: refers to the values and ways of thinking that managers wish to encourage in their organization

22.  Can be understood at three levels 1. Artefacts-organizational attributes that an outsider visiting the company for the first time might see, hear or feel 1.Open or lack of doors on an office 2. Values and attitudes that organizational members express 1.Dress code: relaxed or formal 3. ‘Unspoken rules’ and tacit beliefs

23.  Development of a strong culture can act as an efficient and effective coordinating device, because employees share the same values there is less need for direct supervision and employees can act on their own initiative

24.  Limited empirical evidence on the links between corporate culture and organizational performance, partly because of the difficulties of measuring these broad concepts  Studies that have been attempted do suggest that organizations with strong corporate cultures do have better long term financial performance than those who do not, although the tests used to find this may not have been totally reliable