Chapter 17 - Dell and its Single Formula Growth

There was a very interesting article in Chapter 17. It talked about the growth and decline of Dell Computers. Dell is a company that does one thing well and thats selling computers at a cheap price. It doesn't have any retail stores so it avoids overhead fees. They do all their business online. This business model has worked great for Dell, until recently.

The problem is that thats all Dell does. It relies on one formula for its success. The problem is, according to the article, is that when the company exhausts its one forumla, the company starts declining. It needs to start a new growth platform while it can, as there is no point in waiting. Dell is slowly slipping into decline and if it does not change its strategy, they will lose a lot of market share.

The reinstatement of founder Michael Dell as CEO seems to be a good change for Dell. He claims that although his company's main business strategy will always remain it's best one, he want's to implement other strategies to effectively bring the company back up. This is the mark of an organization being effective.

Organization Design in a Changing World

In chapter 17, a sectioned titled “Organization Design in a Changing World,” discusses various structures that have been used in management. It discusses traditional designs along with the functional structure, divisional structure, and matrix structure. These structures are found in organizations which are typically defined as “the traditional approach.”
A functional structure groups people based on the function they perform and links them with a supervisor who specifically understands their function. A divisional structure groups together activities which work together to complete the product. This allows them to focus on their specific task and share ideas to improve the product. The matrix structure is intended to create a stronger horizontal alignment and is effective when the organization needs to focus on a particular goal.

What is an organization?

The word organization is one we use in our vocabulary all of the time, but how many of us truly know how to define what an organization is. Unless you've taking a course in Organizational Behavior, describes the characteristics of an organization may not be so simple. Chapter 17 focuses on defining what an organization is and also describes different perspectives of an organization. According to the definition in chapter one, an organization is "a system of consciously coordinated activities or forces of two or more persons" (Kreitner 502). In a PR Week article titled "CEO Q&A" ING's CEO Arkadi Kuhlman is interviewed about the set up of his company's organization chart along with a few questions of how its composition has recently changed. For example he stated that "the company consolidated corporate, analyst, and product PR under one worldwide umbrella...previously, these functions were handled by separate individuals working independently of one another and reporting to global or regional heads" (Morris 13). The purpose for this, and as outlined in the chapter is to keep an internal motivation and single message of the company. Chapter 17 also defines the four basic dimensions of organizational structure. The first, is hierarchy of authority (who reports to who), the second, is division of labor, third is spans of control, and fourth is line and staff positions. The text also includes an example of how a company's organization chart would be composed.

Morris, Erica. "Organization Chart." PRWeek (U.S.); Apr2010, Vol. 13 Issue 4, p13-13, 1/2p. Business Source Complete

Kreitner, Robert. Organizational Behavior. 9th ed. Vol. 1. New York: McGraw-Hill Irwin, 2010.

Common Organizational Themes

What I found particularly interesting in Chapter 17 is the discussion of common themes among all organizations. Despite the diverse forms and variations that may exist within and among organizations, four common characteristics include: coordination of effort, a common goal, division of labor, and a hierarchy of authority. In order to function effectively, there must be some form of these characteristics implemented in the organization.

In the article, "Initial Attraction to Organizations: The influence of trait inferences," Slaughter et. al. study how organization personality perceptions are associated with an organization's characteristics. Research shows that the organization personality perceptions: Boy Scout, Innovativeness, Dominance, Thrift, and Style may determine an individual's attraction to firms that display the traits they are looking for. Furthermore, organizations can highlight these traits for future recruitment in the workplace.

Establishing an organizational mission statement or purpose separates the organization from others. Though all share a general structure, it is up to the organization to build upon that foundation to create something great.

Source: Slaughter, Jerel E., and Gary J. Greguras. "Initial Attraction to Organizations: The influence of trait inferences." International Journal of Selection & Assessment 17.1 (2009): 1-18. Academic Search Complete. EBSCO. Web. 26 Apr. 2010.

Open Systems

It's going to be short today, but nobody reads my posts, so I doubt anyone will even notice. The year is coming to a rapid conclusion, and we're just about ready to wrap up our fun-filled semester in this class. I'm kind of sad to see it go, to be perfectly honest. John is a good teacher who knows what he's talking about, and we've learned a lot about teamwork and organizational culture. The whole blogging system for doing homework (a system also utilized in his internet marketing class) was a really cool idea that made homework feel more communal with other classmates. In all, I had a good semester in this class. But enough of my nostalgic banter.

In doing the reading for this week, I came across something really important that feels like a great note to begin the fade to black. In chapter seventeen of the luminous tome, Organizational Behavior, by none other than the dynamic duo, Kreitner and Kinicki, there was something in chapter seventeen that really caught my eye. Of course, this was the Open System Perspective of Organizations.

An open system refers to an entity that constantly interacts with its environment in order to survive. It's not difficult to generalize with a topic like this. As human beings, for instance, we must interact with our environment in many ways, such as procuring food and going for long hikes on Mt. Tamalpais. But how does an organization adhere to the concept of an open system? In what ways does an organization such as a business lend itself to contextual environmental interaction? The answer is not quite as straightforward as you'd think, and this can be a very nuanced topic.

The book makes a good point when describing open systems. Every system in existence is partially closed and partially open, so the discussion about an open system is essentially taking a look at the nuanced parts of a system and coming to a conclusion about its openness. The book suggests looking at how great the role of the overall environment is in the functions of a system in order to make a determination.

But what does an open system look like?

If we go back to the 1950's and keep going backwards, business was not organized the way it is today. Businesses were mostly seen as a well-oiled machine that functioned off of a strict sense of discipline and had a tendency to be run like a military brigade. Fortunately for us in this day and age, most businesses are not run that way anymore. A different framework was needed to progress the organizational paradigm.

Essentially, there is a barrier between the organization and the outside environment as a whole. Inside this barrier are subsystems pertaining to each aspect of organizational functionality: goals and values, the technical aspects, psychosocial aspects, structural considerations, and the managerial processes of the company. In an open system, the barrier that protects these internal components of the organization needs to be a permeable membrane, capable of allowing inputs (money, materials, human capital, and information) into the organization freely. Equally important is the ability of the membrane to allow outputs (products, services, organizational growth, social benefits) to escape in order to fulfill their purpose, with the feedback from the outputs turning around and influencing the supply of necessary imports, starting the cycle over again.

In essence, an open organization is one that operates in the most logical fashion, with overlapping internal components, and a perforated outer shell that allows the free flow of necessary environmental components through the company. In this way, the company can move faster and make more money, due to the very nature of its design. The human body operates in a similar fashion. We have a semi-permeable membrane (our skin), which lets key environmental nutrients into our bodies (vitamins from the sun, moisture from the air). We also eat food, a necessary input, in order to function internally, and then export our outputs, which expend energy. So a company that takes a little lesson from biological processes can function at a much higher level than one that simply views its design as some kind of soulless cubicle farm with a rigid sense of 1950's-era discipline.

Chapter 17: Generic Organizational-Effectiveness Criteria

In chapter 17 an essential concept which helps with the effectiveness of any situation is that assessing organizational effectiveness is an important topic for an array of people such as managers, job hunters, stockholders, government agencies, and OB specialists. There are four generic approaches it mentions which are goal accomplishment, resource acquisition, internal processes, and strategic constituencies satisfaction. Even though there are four main approaches the most significant one seems to be goal accomplishment. In order for any type of business to run smoothly they have to have a goal which they are aiming for. This will make it easier for them to go about accomplishing anything they want to be seen in their business.

Philip Selznick explains in his article titled American Sociological Review that trade unions, governments, business corporations, political parties, are all formal structures in the sense that they represent rationally ordered instruments for the achievement of stated goals. Philip mentions that through the goals businesses set, it is easier to facilitate the accomplishment of some agreed purpose through the allocation of functions and responsibilities. Goal setting and accomplishment is seen as a system of coordinated activities or forces of many persons. As illustrated by Philip having a mind set on goal accomplishment is vital for any business or structure to be effective.

Source: Selznick, Philip. "FOUNDATIONS OF THE THEORY OF ORGANIZATION." American Sociological Review 13.1 (1948): 25-35. Academic Search Complete. EBSCO. Web. 19 Apr. 2010.

Do you think an individual can effectively manage 24 employees? Explain

 I am sure it is possible for an individual to manage 24 employees.

 Indeed, the employees are men and women who can be implied in the company's values so that they do their best to perform at work. The manager can do feedbacks and reports with the differnt teams, and thus he can see what works or not in his company.

 I think that it is important to divide the whole group in different teams, not to create competitions between the employees but to make them easier to know and to manage.

The best way for a manager to manage his employees is to know them and to be well known and appreciated by them. 

He also can delegate his authority to some subordinates; but he must never lose his acquaintances with his employees. It is the best way to manage them well.

He must show them that he is present, and that he is aware of their requirements. 

Chapter 17: Innovation

Innovation the workplace was something that was discussed in Chapter 17. Innovation was defined as something new brought to the table that the public can use. Chapter 17 explained innovation in various different ways. First of all, it cleared up two myths about innovation. According to the text, innovation took preparation—it was not something that came out of thin air, nor was it something that could be regulated. From there, innovation was then described as a growing tree. Innovation, as it was written in the chapter, stemmed from the seed of hard work, dedication, necessity, curiosity, and more.

This chapter also discussed that there were several challenges that one could come across when being innovative. These challenges included: finding an idea, developing a solution, funding, reproduction, reaching for customers, beating competitors, timing, and keeping older customers happy while trying to garner new ones through innovation.

The last aspect of innovation that the chapter discussed was what made innovation effective and grow. There was only one answer to that, which was management. Training the workers, having good leadership, and making sure that creativity was not stifled, were a just some of the things that were needed to perform effective innovation.

Seeing as this part of the chapter talked a bit about Apple and its innovation, I found a video online which showed how Apple’s products have evolved throughout the years and how they kept innovation alive. Since this was made a year ago, products such as the new iPhone and iPad were not shown yet.

Coming up with ideas

In Chapter 17, innovation and creativity are discussed. It is explained how new products and ideas are used to create other innovative products and ideas. In order fot this to occur, there has to be good organizational structure (good managers, workers, teams, etc.) that are open to taking on challenges and brainstorming together for answers and creative ideas. Sounds easy, right? Wrong. Just like it is difficult to simply sit down and start writing a 10 page paper, ideas do not just pop into a person's head overnight. I've been told that if you think of a problem and then sleep on it, by morning you'll have an answer. This doesn't often work. In order to come to a solution, communication is necessary.

As the article, "No Ideas, You're Not Alone" says, "Thomas Edison didn't work alone. The invention of the light bulb was the work of an entire lab team; it was one of his assistants who came up with the idea of screwing the bulbs into sockets instead of just mounting them straight up. Same goes for J.R.R. Tolkien, who wrote his Lord of the Rings novels at the same time C. S. Lewis was creating The Chronicles of Narnia. Both authors generated ideas for their stories in a weekly literary group of Oxford scholars called the Inklings. Charles Darwin's work on evolution wasn't dreamed up in a vacuum, either: While doing his research, he was corresponding with dozens of scientists across Europe." In other words, our traditional idea of genius is not well grounded. Oftentimes, companies still think that people can single-handedly invent something and solve a problem. Well, they can't. They may come up with a good idea now and then, but the end product of this idea is the result of other's input and continuous trial and error. This is why some companies are starting to let their employees have more freedom in organizing their teams. Sometimes, they know best how to do their jobs and without a manager imposing a structure upon them, they are able to use their knowledge to improve their system. When there is good base organization within a firm, the whole company profits and innovation is able to occur.

Source:

Ewers, Justin, and E. J. "No Ideas? You're Not Alone." U.S. News & World Report 142.22 (2007): 50-52. Academic Search Complete. EBSCO. Web. 13 Apr. 2010.

Chapter 17

The matrix structure of traditional organization designs are used to promote stronger cooperation to meet goals. It combines a vertical structure with a horizontal structure overlay, which incorporates functional and divisional processes to form a grid. Matrix structures have had bad reviews of being too complicated and confusing because it requires a lot of work to collaborate and use the structure effectively. People don’t know how to compliment and reinforce the matrix; therefore many companies fail to use the structure to its full affect. An example of this would be a division of project elements, where a worker on the matrix has to report to the project manager and the company manager who reports to the CEO. This helps to facilitate communication of company activities to various management personnel so that they have a clearer idea company expenses and revenues. It also allows for more collaboration of different ideas between the different management departments in order to have the best solution for project goals.

On the website, Matrix Organization and project management by Visitask.com, matrix structures are best for project oriented companies, such as construction companies. Information sharing is a required part of the system because it allows for flow of communication. A project manager is responsible for the completion of the project; however, sometimes other people are needed to assist with the job. The functional part of the company is responsible for functional and technical elements required to operate. The functional manager’s job is to ensure that the department is unified and that all information is being exchanged between departments and projects. Matrix structures are used to create cooperation between departments through shared responsibilities. It also helps to reduce costs and conflicts, create a better balance between time and performance, and distribution of authority and stress. This website helped me to gain a more in-depth insight into the advantages and purposes of the matrix structure. In my opinion, this is a very effective structure when a company is working to achieve better team work amongst its employees and to obtain more effective project results.

Works Cited
Matrix Organization and project management. 12 April 2010 (http://www.visitask.com/matrix-organization.asp).