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CONTENTS1. INTRODUCTION 3
2. MATRIX OVERLAY TO NETWORKING 3
2.1. Matrix Overlay: 3
2.2. Responsible Autonomy: 3
2.3. Matrix Overlay VS Responsible Autonomy: 4
2.4. Example of Company: 4
2.5. Conclusion: 5
3. CENTRALIZATION TO DECENTRALIZATION 6
3.1. Centralization 6
3.2. Decentralization 6
3.3. Centralization or Decentralization 7
3.4. Examples of company: 8
4. ORGANIZATION TO NETWORKING 10
4.1. Organization 10
4.2. Organizational Structure 11
4.3. Types of Organizational structures 11
4.4. TRADITIONAL STRUCTURES 11
4.5. LINE STRUCTURE 12
4.6. LINE-AND-STAFF STRUCTURE 12
4.7. MATRIX STRUCTURE 12
4.8. Organizational change for enterprise growth 13
4.9. IBM 13
4.10. Toyota Company 14
4.11. Organization structure of Toyota 14
4.12. Networking 14
4.13. Salient Benefits 15
4.14. Outsourcing: a major drive to network formation 15
4.15. The globalization of networking 16
4.16. Trust: a stumbling-block to successful networking 16
4.17. Conclusion 17
5. THE NEW ORGANIZATION (mukul&Ruchira) 19
6. CONCLUSION (mukul&ruchira) 19
7. REFERENCE 20
7.1. Paper Based Resources 20
7.2. Electronic Resources 20
MATRIX OVERLAY TO NETWORKING
It is to explain organizational structure based on optimal coordination of interaction among actives. The main idea is that each manager is cabala of detecting and coordinating interactions only within his limited areas of expertise. Only the CEO can coordinate companywide interactions, optimal design of the organization trades of the costs and benefits of various configurations of managers.
The responsible autonomy is an individual or a group has autonomy to decide what to do but is accountable for the outcomes of the decisions it might be called no rule or no external rule, Responsible Autonomy means to address the difficulties in applying direct control strategies in seeks to encourage creativity and innovation by developing an informal working environment for respective manager and technical staff a conceptual frame work is develop on relationship between management control strategies and information system project risks.
Matrix Overlay VS Responsible Autonomy:
According to Bryan and Joyce, they argued that “today’s big companies do very little to enhance the productivity of their professional structures , retrofitted with ad hoc and matrix overlays nearly always make professional works more complex and inefficient.” Organizations in 21st century are not fit for 21st century workers. Comparably in responsible autonomy is form of organization in which groups of workers decide for themselves what to do, but should be accountable for the outcome. It is a open source work. It gets the people well connected to each other in organization which help to make more innovations and explore knowledge.
Example of Company:
The Unilever, the basic organisational unit is the country-based sales and marketing team. Now when categories are increasingly internationally and needed to manage globally. As a result Unilever has category managers at global and regional levels. And recently, brands are now stretched across categories like Vaseline is a brand and in Vaseline enter the deodorant or shampoo categories. So therefore it’s necessary to have a brand management function or process above the level of category. Same issues arise in supply side, as in manufacturing and purchasing increasingly need to managed not only across the brands and categories but also across the countries and regions. Therefore these companies involve a complex network of relationships between interdependent units, working together in a matrix structure.
The only three ways to get things done that is to coordinate to an organization these are
- Hierarchy: has been a most the commonly used way of combining system, culture, leader ship and power; the four key feature of an organization. And it is also most common and often thought of as the only way. Now the time is ripe for change in order to thrive we need to get rid of our addiction to hierarchy. Biased in our factors and re enforced by long cultured tradition, we need to move to more cooperative, smart and accountable ways of organizing. Therefore depending on its purpose and size, organizations will need to blend in various degrees of heterachy and responsible autonomy. In its hierarchy dominated matrix. Some of the key factors to pull away from hierarchy are individual skills, rewards system and more participatory governance systems,
- Heterarchy: In this concept it describes as divided, supported or dispersed rule where control shifts around depending on the project and the personality, skills, experience and enthusiasm of those who can make things happen.
- Responsible autonomy: In this concept the teams of employees decide what to do but remain accountable for the result.
Today’s big companies do very little to enhance the productivity of their professionals. In fact, their vertically oriented organizational structures, retrofitted with ad hoc and matrix overlays, nearly always make professional work more complex and inefficient.” In other words, 21st-century organizations are not fit for 21st-century workers.
The models and frameworks that shaped our leading organizations from the end of the second world war through the conclusion of the cold war are clearly obsolete in this new era of e-business, perpetual innovation and global competition.” The design of today’s complex enterprises, says Mercer Delta, requires an entirely new way of thinking about organizations.
Trust is the driving issue here, and one that you will find about implementing new management techniques and new technology to empower innovation creators.
Network person can add tremendous amount of value to a large organisation. However, to get the most out of their, Senior Management has to trust him. Senior Management to trust him with key information about the company’s strategies and challenges. Senior management has to trust him to make decisions. Finally, Senior Management has to trust him with all the tools she will need to communicate with the rest of the company.
CENTRALIZATION TO DECENTRALIZATION
To know about centralization to decentralization, we need to know the definition of centralization and decentralization and how organization works under these states.
It is a state under which organizational and management decisions and strategies are decides by the single authorities and where resources underutilized, less motivation to the employees, lack of knowledge sharing and less moral of the employees causes the conflicts and errors in the management.
It is a state of the organization run under the subunits of management and decisions are made on the lower level and it would be the best definition if you say the lower the level where the decision are made the greater is the decentralization. .
Factors involved in decentralization.
There are plenty of reason which leads an organization centralized to decentralized.
Decision making authorities are not aware of the local knowledge which could effect the decisions.
The less the managerial force in decision-making will not get the desirable motivational effect and managers have not much control over the results.
Targets and achievements of overall organization is not the responsibility of every manager, everyone is liable for his own code of conduct and its directly effects the goals of the company.
The application of services are not fully utilized because they are forced to do the certain job which cause of insufficient results.
Centralized process cannot divide labour as perfect as decentralized did and even in the time of need to improve deficiency or inefficiency by moving their working force around and they can do so without the approval of top management.
Example. Consider the Dallas Cowboys of the early 90’s, where Jerry Jones the owner had final say over all personnel decisions to the New England Patriots of today, where numerous individuals throughout the organization have an input on personnel decisions. By trusting the individuals within the organization to obtain accurate information and use their minds to provide appropriate analysis, the Patriots are able to take advantage of division of labor and allows for multiple individuals to give input on players. Decentralization has proven so successful for the Patriots (via seemingly always finding cheap players to replace expensive stars) that the Cowboys have now moved toward a more decentralized structure.
Centralization or Decentralization
Normally, centralized decision making is one of the strategies which is using by the international and global organisation, decentralized decision making is the multidomestic strategy. The decision making of centralized is the senior manager who has experience and expertise in the organisation and they are controlling the whole organisation. This is good for headquarter to control the organisation and make sure it always following the strategy of the organisation, reducing the risk of the lower-level employees make. But this is really hard for management to motivate their employees and they will wait to be told what to do, secondly the top management level will hard to get information from the bottom line and this is going to cause missed communication between manager and their employees (John, D.D & Lee, H.H & Daniel, P.S, p526).
Decentralised decision making base on the local managers and they can decide what to do, because they know a lot about the local environment so that they can deal in the right way. In most of the organisation top managers are not contact with the customers, competitors, suppliers and markets directly, so they do not really know the right decision for practically case. Therefore, decentralized decision making providing an opportunity for the line managers to decide what to do and make the right decision. Decentralized strategy can encourage the line managers to exercise initiative and motivate the lower level employees to do greater job. On the other hand, if there are lots of bad decisions are made then the organisation will be in the risk and also the performance of the organisation may get change (John, D.D & Lee, H.H & Daniel, P.S, p527).
Above all different organisations have their own strategies and they will follow their strategy to make the organisation become global and international organisation. Therefore, centralized and decentralized strategies are the way for organisations to approach into global market, consider on different culture that the organisation will choose either centralized or decentralized strategy to mange their organisation.
John, D.D & Lee, H.H & Daniel, P.S.(2007), International business environment and operations, eleven edition, Pearson Prentice Hall.
Examples of company:
Johnson & Johnson (Decentralized)
J&J has more than 250 operating companies in 57 countries and is employing 117,000 people all around the world. They are completely example of decentralized organization with success. According to an interview between William Weldon, chairman and CEO of the Johnson&Johnson and Knowledge@Wharton, he believes that to be decentralized have lots of challenges with great opportunities as well.
Local management structure helps to understand the consumer, the people, the government and the needs in the marketplace. Because they grew up in those markets, understand those markets and develop themselves in those markets. To run business locally is easier than run it from the U.S. J&J has strong leadership and management framework that is way being decentralized is not a reason to lose control.
The other thing that decentralization does is that it gives company a tremendous opportunity to develop people. Another great benefit is when people make a mistake it does not affect on whole company but the problem with centralization is if one person makes one mistake, it can cripple the whole organization. On the other hand decentralized corporate structure gives people freedom to create new products and ideas. This makes J&J more innovative company and competitive in the market. (Johnson & Johnson CEO William Weldon: Leadership in a Decentralized Company, 25 June,2008) (http://knowledge.wharton.upenn.edu/article.cfm?arti
Hewlett-Packard had decentralized structure in the 1970s with a lot of small divisions then in the early 1980s they became centralized because three divisions were not well-matched with each other. But in this case they realized that system obstruct innovation and talent. HP has changed management structure in 1990 but this time company suffered lack of coordination then centralized in 1994, swung back to decentralized units in 1998 and finally returned to centralized in 2000. ((http://articles.techrepublic.com.com/5100-10878_11-1058040.html)
According to Lampman, Director of HP Labs “The company came from a pretty long tradition of a very highly decentralized business model, and if anything, that probably reached its zenith in the mid to late 1990s and while that model actually worked very well for us in the past, both in the early days of the company and even in the period since we got into computer systems in al lot of ways it fundamentally broke down as we found ourselves in system businesses which required more integration and a more intensively competitive environment which required a lot more leveraging of the assets that we have.”
Having centralized management structure is making stronger their following points:
- HP minimized broke down in computer system because of less integration.
- HP got compatibility between products across the entire business and they get consumer experience using simple way.
- HP believes that a move to centralization was also a move to improved alignment.
- They completely disagree that being centralized cause negative impact on innovation. (Thinking Strategically in turbulent times, Alan M. Glassman, Deone Zell, Shari Duron, M.E Sharpe Inc. , 2005. Edition 2nd. NILAY
ORGANIZATION TO NETWORKING
An organization is a group of people with same aims, goals and achievements and social arrangement which controls its own performance. Organizations can be regarded as people management systems. They range from simple hierarchies along traditional lines to complex networks dependent on computer systems and telecommunications. Human resource managers can encourage organizations to adopt strategies (for their structures) which foster both cost-effectiveness and employee commitment. Organizational structures can be classified into a number of types, including functional, divisional, matrix, federations and networks.
There are many examples of organizations but among the most successful organizations are Coca-Cola and Toyota Motor Corporation. These organizations represent companies that operate for very long time very successfully in global business. These companies are in first 100 top companies in the world.
The Coca-Cola Company operates in more than 200 countries and markets with nearly 500 brands and 3,000 beverage products.
Toyota Corporation is currently the world's largest automaker.
Every organization to be effective must have an organizational structure. It is the form of structure that determines the hierarchy and the reporting structure in the organization. It is also called organizational chart. There are different types of organization structures that companies follow depending on a variety of things; it can be based on geographical regions, products or hierarchy. To put it simply an organizational structure is a plan that shows the organization of work and the systematic arrangement of work.
Types of Organizational structures
Traditional organizational structures focus on the functions, or departments, within an organization, closely following the organization's customs and bureaucratic procedures. These structures have clearly defined lines of authority for all levels of management. Two traditional structures are line and line-and-staff.
The line structure is defined by its clear chain of command, with final approval on decisions affecting the operations of the company still coming from the top down. Because the line structure is most often used in small organizations—such as small accounting offices and law firms, hair salons, and "mom-and-pop" stores—the president or CEO can easily provide information and direction to subordinates, thus allowing decisions to be made quickly.
While the line structure would not be appropriate for larger companies, the line-and-staff structure is applicable because it helps to identify a set of guidelines for the people directly involved in completing the organization's work. This type of structure combines the flow of information from the line structure with the staff departments that service, advice, and support them.
Based on the company's general organization, line-and-staff structures generally have a centralized chain of command. The line-and-staff managers have direct authority over their subordinates, but staff managers have no authority over line managers and their subordinates. Because there are more layers and presumably more guidelines to follow in this type of organization, the decision-making process is slower than in a line organization.
A variation of the line-and-staff organizational structure is the matrix structure. In today's workplace, employees are hired into a functional department (a department that performs a specific type of work, such as marketing, finance, accounting, and human resources) but may find themselves working on projects managed by members of another department. Organizations arranged according to project are referred to as matrix organizations. Matrix organizations combine both vertical authority relationships (where employees report to their functional manager) and horizontal, or diagonal, work relationships (where employees report to their project supervisor for the length of the project). "Workers are accountable to two supervisors—one functional manger in the department where the employee regularly works and one special project manager who uses the employee's services for a varying period of time"
Because the matrix structure is often used in organizations using the line-and-staff setup, its also fairly centralized. However, the chain of command is different in that an employee can report to one or more managers, but one manager typically has more authority over the employee than the other manager(s).
Organizational change for enterprise growth
During the mid-1990s, IBM revitalized its market strategy and product line architecture The need for this strategic and product line renewal could not have been more pressing. In 1990, IBM reported net earnings of approximate $6 billion. A year later, it reported a small net loss. In 1992, the loss approached $7 billion. By 1993, losses exceeded $8 billion! Market innovation was an important aspect of IBM's turnaround defined compelling user needs and frustrations, and drove these into new product designs in both hardware and software. IBM moved from a transactions processing orientation for all large corporate users, to an e-business consumer and focus within specific vertical markets.
Toyota Motor Company was founded in 1937 by the Toyoda family. Business was relatively unsuccessful until Eiji Toyoda introduced the method of lean production after studying Ford’s Rouge plant in Detroit in 1950.This lean production method became known as the Toyota Production System. The production executive, Taiichi Ohno, successfully helped Toyoda improve his company using this new production method and mode of thinking.
Organization structure of Toyota
Toyota employees and executive’s one quickly learn the word “I” instead of “we”. Employees are encouraged to share information and because higher ranking employee are encouraged to serve as mentor of lower level employee. Toyota has a more horizontal organizational structure “Matrix structure” Toyota’s use of matrix structure gives the company significant advantage because people working with “responsibility without authority” challenge to uncover truth and find solutions.
Both large and small organizations are increasingly required to network or enter into strategic alliances with other firms, in order to achieve success. Strategic inter-organizational alliances and networking (through technology) are becoming the keys in managing organizations in the 1990s. Many firms (both small and large) have now realized the need for business alliances.
In this perspective, firms use a variety of strategies to create an alliance with other firms,
through people who can help their business grow. This process involves a variety of means and instruments which include networking with friends and colleagues, joining professional organizations, hiring skilled professionals for special needs, client referral
development and the use of sophisticated information systems-networks. Networks are transforming the roles of employees in organizations. The back office has moved to the front and the new technology has changed many career paths.
It can serve as a transitional stage to help organizations to become leaner, more innovative and responsive in order to meet today’s organizational challenge to change. Enterprise networking also offers more timely, cost effective and integrated ways to make information available throughout an entire enterprise. Enterprise networking techniques are also being used to eliminate routine tasks.
Outsourcing: a major drive to network formation
An outcome of outsourcing has been the growth in the number of integrated companies,
which are vendors that offer companies a customized network of vehicles, drivers, dispatchers, managers and transport control systems? In the strictest sense of the word, outsourcing refers to the transfer of assets, such as computers, networks and people, from a using organization to a service vendor, which then assumes under long-term contract the responsibility for the outsourced activity.
Current examples of this arrangement include Digital Equipment Corporation’s operation of Kodak’s network and MCI’s and IBM’s operation of Merrill Lynch’s network.
EDS and Texas Air formed a joint venture to provide reservation systems; EDS paid $250 million to Texas Air for assets of System One subsidiary transferred to joint venture; EDS acquired 2,300 of 3,000 System One employees under ten-year facilities management contract. Chevron and IBM will manage the SNA network, AT&T the private voice network, Hughes the retail point-of-sale network at 2,000 service stations.
The globalization of networking
Within Europe networks are a key means in a recently concluded five-year nation-wide, action-research-based Swedish work reform effort involving more than 100 organizations in various networks. This was called the Leadership, Organization and Co-determination (LOM) programmed. Perhaps the most popular European examples of networking are found in Denmark. In 1989, the Danish government earmarked $25 million to create a networking programmed. Companies joined in groups of three, four and five to chase exports and expand their product lines. Manufacturers pooled resources and skills, technology and information. Companies in the service sector combined research, training and marketing. Within 18 months, 3,500 of Denmark’s enterprises (ranging from law firms to furniture makers) were operating in these networks.
Trust: a stumbling-block to successful networking
It is widely understood and accepted that trust is a fundamental prerequisite to any successful networking arrangement. However, strategic alliances should not be regarded as “quick-fix” management solutions. Many alliances are plagued by clashing cultures and conflicting interests.
If alliance partners are not pulling together in the same direction or have not agreed on how to measure success, there are going to be problems. Potential conflicts with members of the alliance can be lessened through agreements that are carefully drawn up at the outset as well as through reinforcement of the informal ties between members. Risk sharing and the establishment of long-lasting trust (through social ties) are what binds networked companies together. When reaching out and taking risks with another company, trust is vital. This is why the interplay between the business rationale and the social fabric becomes so prominent. What must be borne in mind is that involvement builds knowledge and knowledge tends to build trust. REFERENCE?_ASIF_NADYA_ANICA
Combination of strategy, structure and management. The move from a functional organization to an integrated one is a major undertaking that may take years to implement effectively. However, the time constraint is of no real consequence. Today’s corporate partners are less interested in short-term ventures designed to save a few dollars and more focused on long-term alliances where gains are made over many years. Alliances are therefore constructed as effective means to acquire access to new markets and special expertise, or to beat others to market. Strategic alliances are also becoming increasingly necessary to support innovative activities.
In these perspectives, strategic alliances are increasingly required to pool resources, skills and risk capital to maintain industrial competitiveness in a hypercompetitive global marketplace. The need for alliances is also driven by rapidly advancing technology Networking is the ability to develop and cultivate a large and diverse group of people who will gladly and continually refer business to one another. In a structural sense, networks offer a promising alternative to the two-dimensional lens of strategy and structure through which most senior managers evaluate their organizations. Over time, the members of the network influence values and behaviour both above and below them in the larger organization. Networking is, in effect, reaching out and creating visibility for oneself and one’s company in niche or target markets. It is also the process of targeting and getting involved in associations, groups, clubs or other organizations where the customers and prospects in a niche market spend time with one another. In recent years, the rise of the “network” form of organization has been dramatic. Even economic sectors that were traditionally driven by conventional business and organizational rationales have espoused this novel form. Among such sectors are the healthcare sector, local and state public-service organizations, the oil industry and the insurance industry. What is also important to note is that networking is quickly following the rationales of the global economy and, as a result, we are now witnessing the formation of networks on a global scale.
Zeffane, R.M. (1994), “Inter-organizational alliance and
networking: the role of technology”, Leadership &
Organization Development Journal,
Zeffane, R.M,The widening scope of
economic, sectoral and social dimensions
Paul F. TakakOutsourcing
THE NEW ORGANIZATION (mukul&Ruchira)
I PUT THIS LIST FOR EXAMPLE? PLEASE WRITE YOUR REFERENCE LIKE IN THIS LIST
Paper Based Resources
Slomon John, Economics, 2006 (6th Edition), Pearson Education Ltd., England
Slomon John, Essentials of Economics, 2007 (4th Edition), Pearson Education Ltd., England
Web 1: Mercer’s Quality of Living Survey [online] (cited 7 march 2009) available from www.mercer.com
Web 2: The Underground Economy definition [online] (cited 7 march 2009) available from (http://www.thecanadianencyclopedia.com/index.cfm?PgNm= TCE Param =A1ARTA0008198, Canadian Encyclopedia).