CONCLUDING CASE Chapter 8

CONCLUDING CASE: 

Stanley Lynch Investment Group

            The Stanley Lynch Investment Group is a large investment firm headquartered in New York. The firm has 12 major investment funds, Each with analysts operating  in a separate department. Along with knowledge of the financial markets and the businesses it analyzes, Stanley Lynch’s competitive advantage comes from its advanced and reliable computer systems. Thus an effectives information technology (IT) division is a strategic necessity, and the company’s chief information officer (CIO) hold a key role at the firm.

When the company hired J.T. Kundra as a manager of technology, he learned that the IT division at Stanley Lynch consists of 28 employees. most of whom specialize in serving the needs of a particular fund. the IT employees serving a fund operates as a distinct group, each of them led by a manager who supervises several employees (five employees report to J. T.).

            He also learned that each group sets up its own computer system to store information about its projects. the problem with that arrangement quickly became evident. As ). T tried to direct his group’s work, he would ask for documentation of one program or another. Sometimes no one was sure where to find the documentation; it might turn out to be stored in an obscure place such as only on someone’s flash drive. other times he would quickly get three different responses from three different people with three different versions of the documentation. and if he was interested in another group’s project or a software program used in another department, getting information was next to impossible. he lacked the authority to ask employees in another group to drop what they were doing in order to hunt down information he needed.

J.T concluded that the entire IT division could serve the firm much better if all authorized people had easy access to the work that had already been done and the software the was available. The logical place to store that information was online. From experience at a previous company, he believed that the easiest way to compile the information would be to set up a shared web project called a wiki-an 0nline document created through the collaboration of its users, who can look up or contribute information according to their knowledge and needs. The challenge would be how to get everyone to contribute, give that he had authority over so few of the IT workers.

            J. T. started by working with his five employees to build a wiki offering basic information presented in a consistent format. then he met with two higher-level managers who report to the CIO He showed them the wiki and explained that fast access to information would improve the IT group’s quality and efficiency. he suggested that the managers require all the IT employees to put their documentation on the wiki, and he even persuaded them that this behavior should be measured for performance appraisals. this last tactic was especially significant because at an investment company, bonuses for meeting performance targets are a big part of employees’ compensation.

The It employees quickly came toappreciate that the wiki would help the perform better. When they visited it, they could see from the original information that it would be useful. Adoption of the wiki was swift, and before long, the IT employees came to think of it as one of their most important software systems.

Questions

1.give an example of differentiation in Stanley Lynch’s organization structure and an example of integrations in this structure.

Answer:

Example of differentiation in Stanley Lynch’s: that each group sets up its own computer system to store information about its projects. Sometimes no one was sure where to find the documentation; it might turn out to be stored in an obscure place such as only on someone’s flash drive.

Example of integrations in this structure: would be to set up a shared web project called a wiki-an 0nline document created through the collaboration of its users, who can look up or contribute information according to their knowledge and needs.

2. what role did authority play in the adoption of the wiki by the IT division at Stanley Lynch? 

Answer:

The entire IT division could serve the firm much better if all authorized people had easy access to the work that had already been done and the software the was available. The logical place to store that information was online. The easiest way to compile the information. They could see from the original information that it would be useful.

 

3. describe how the IT division used coordination to achieve greater integration.

Answer:

The IT division at Stanley Lynch consists of 28 employees. most of whom specialize in serving the needs of a particular fund. The IT employees serving a fund operates as a distinct group, each of them led by a manager who supervises several employees (five employees report to J. T.).

Review Chapter 9

Organizational Agility

The Responsive Organization

The formal structure is put in place to control people,decisions,and actions. But in today’s fast changing business environment, responsiveness, agility, the ability to adapt to changing demands-is more vital than ever to a firm’s survival. The mechanic organization a form of organization that seek to maximize internal efficiency. The organic structure an organizational form that emphasizes flexibility.

Strategy and Organizational Agility

·         Organizing around Core Capabilities

A recent, different, and important perspective on strategy and organization hinges on the concept of core competence. A core competence gives value to customers, makes the company’s products different from and better than those of competitors, and can be used in creating new products. Think of core competencies or core capabilities as the roots of competititveness and products as the fruits.

·         Strategic Alliances

A strategic alliances is a formal relationship created with the purpose of joint pursuit of mutual goals. In a strategic alliance, individual organizations share administrative authority, from social links, and accept joint ownership.

·         The Learning Organization

A learning organization is an organization skilled at creating,acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights.

·         The High-Involvement Organization

In a high-involvement organization, top management ensures that there is consensus about the direction in which the business is heading. The leader seeks input from his or her top management team and from lower levels of the company.

Organizational Size and Agility

      The Case for Big

Bigger was better after World War II, when foreign competition was limited and growth seemed limitless. Size creates scale economies; that is,lower costs per unit of production. Size also creates economies of scope; in which materials and processes employed in one product can be used to make other related products.

      The Case for Small

But a huge, complex organization can find it hard to manage relationships with customers and among its own units. As customers demand a more diverse array of high-quality, customized products supported by excellent service, giant companies have begun to stumble.

      Being Big and  Small

Small is beautiful for unleasing energy and  speesd. But in buying and selling, size offers market power. The challenge, then, is to be both big and small to capitalize on the advantages of each. Downsizing is the palnned elimination of positions or jobs. Rightsizing a succesful effort to achieve an appropiate size at which the company performs most effectively.

Customers and the Responsive Organization

·         Customers Relationship Management, A multifaceted process focusing on creating two-way axchanges with customers to foster intimate knowledge of their needs, wants, and buying patterns.

·         Total Quality and Six Sigma,Total Quality management is a way of managing in which everyone is committed to continous improvement of his or her part of the operation. Six sigma quality A method of systematically analyzing work processes to identify and eliminate virtually all cause of defects, standardizing the processes to reach the lowest practicable level of any cause of customer dissatisfaction.

·         ISO 9001, A series of quality standars developed by a committee working under the international organization for standardization to improve total quality in all businesses for the benefit of producers and consumers.

·         Reengineering, Ofrten requires a fundamental change in te way the parts of the organization work together.

Technology and Organizational Agility

Technology can be viewed as te metods,, processes, systems, and skills used to transform resources( inputs) into products (outputs).

1.       Types of Technology Configurations: small batch technologies, Large batch Technologies and continous process technologies.

2.       Organization for Flexible Manufacturing: Computer-integrated manufacturing, Flexible Factories, and Lean Manufacturing.

3.       Organizing for Speed: Time- based Competition

-          Logistics: the movement of the right goods in the right amount to right amount to the right place at the right time.

-          Just in time operations: A system that calls for subassemblies and components to be manufactured in very small lots and delivered to the next stage of the production process just as they are needed.

-          Concurrent Engineering: A desiggn approach in which all relevant functions cooperate jointly and continually in a maximujm effort aimed at produsing high-quality products that meet customers’ needs.

Review chapter 8

Organization Structure

Fundamentals of Organizing

                Two fundamental concepts around which organizations are structured are differentation and integration.

Ø  Differenitation: An aspect of the organization’s internal environment  created by job specialization and the division of labor. Differentiation means that the organization is composed of many different units that work on different kinds of tasks,using different skill and work methods.

Ø  Integration: The degree to which differentiated work units work together and coordinate their efforts.

The Vertical Stucture

                To understand issues such as reporting relationships,authority,responsibility,and the like, we need to begin with the vertical dimension of a firm’s structure.

o   Authority in Organizations

At the most fundamental level, the functioning of every ortganization depends on the use of authority: the legitimate right to make decisions and to tell other people what to do.

o   Hierarcinal levels

Hierarchy: the authority levels of the organizational pyramid. The key responsisbilities at this top level include corporate governance-a term describing the oversight of the firm by its executive staff and board of directors.

o   Span of Control

Span of control: The number of subordinates who report directly to an executive or supervisor. The implications of differences in the span of control for the shape of an organization are straightforward.

o   Delegation

The assignment of new or additional responsibilities to subordinate. Delegation is perhaps the most fundamental feature of management because it entails getting work done through others.

o   Decentralization

The delegation of responsibility and authority decentralizes decision making. In a centralized organization, important decisions usually are made at the top. In decentralized organizations, more decisions are made at lower  levels.

The Horizontal Structure

                The organization inevitably must be subdivided-that is, departmentalized into smaller units or departments: line departments,staff departments and departmentalization.

1.       The Functional Organization: in a functional organization,jobs(and departments) are specialized and grouped according to business functions and the skills the require; production,marketing,human resources,researc and development,finance,accounting and so forth.

2.       The Divisional Organization: As organizations grow and become increasingly diversified, they find that functional departments have difficulty managing a wide variety of products, customers and geographic regions.

3.       The Matrix Organization: An organization composed of dual reporting relationships in which some employees report to two superiors-a functional manager and a divisional manager.

4.       The Network Organization: In contrast, the network organization is a collection of independent, mostly single function firms that collaborate to produce a good or service. The role of managers shifts in a network from that of commad and control to more like that of a broker. Broker serve several important boundry roles that aid network integration and coordination: designer role, process engineering role and nurturing role.

Organizational Integration

·         Coordination by Standardization

Standardization constrains actions and integrates various units by regulating what people do. People often know how to act and how to interact because standard operating procedures spell out what they should do. Establishing common routines and procedures that apply uniformly to everyone.

·         Coordination by Plan

Coordination by plan does not require the same high degree of stability and ruotinization required for coordination by standardization. Interpendent units are required to meet deadlines and objectives that contribute to a common goal.

·         Coordination by Mutual Adjustment

Coordination by Mutual Adjustment involves feedback and discussions to jointly figure out how to approach problems and devise solutions that are agreeable to everyone. Units interact with one another to make accomondations to achieve flexsible coordination.

·         Coordination and Communication

Huge amounts of information flow from the external environment to the organization and back to the environment. To cope organizations must acquire,process, and respond to that information. To function effectively, organizations need to develop structurres for processing information. To cope with high uncertainty and heavy information demands, managers can use two general strategies.