In an organic organization tasks and rules are clearly specified

Major Questions You Should Be Able to Answer

8.1

Aligning Strategy, Culture, & Structure

Major Question: Why is it important for managers to align a company’s vision and strategies with its organizational culture and structure?

8.2

What Kind of Organizational Culture Will You Be Operating In?

Major Question: How do I find out about an organization’s “social glue,” its normal way of doing business?

8.3

The Process of Culture Change

Major Question: What can be done to an organization’s culture to increase its economic performance?

8.4

Organizational Structure

Major Question: How are for-profit, nonprofit, and mutual-benefit organizations structured?

8.5

The Major Elements of an Organization

Major Question: When I join an organization, what seven elements should I look for?

8.6

Basic Types of Organizational Structures

Major Question: How would one describe the seven organizational structures?

8.7

Contingency Design: Factors in Creating the Best Structure

Major Question: What factors affect the design of an organization’s structure?

Page 225the manager’s toolbox

How to Stand Out in a New Job: Fitting into an Organization’s Culture in the First 60 Days

“Once you are in the real world—and it doesn’t make any difference if you are 22 or 62, starting your first job or your fifth,” say former business columnists Jack and Suzy Welch, “the way to look great and get ahead is to overdeliver.”1

Overdelivering means doing more than what is asked of you—not just doing the report your boss requests, for example, but doing the extra research to provide him or her with something truly impressive.

Among things you should do in the first 60 days:2

Be Aware of the Power of First Impressions

Within three minutes of meeting someone new, people form an opinion about where the future of the relationship is headed, according to one study.3 “When meeting someone for the first time, concentrate on one thing: your energy level,” advises one CEO, who thinks that seven seconds is all the time people need to start making up their minds about you. Amp it up, he advises. “If you don’t demonstrate energetic attitude on your first day, you’re already screwing up.”4 (However, don’t be too upset if you feel you’ve blown it with someone on the first meeting. What’s key is to make sure you have other chances to meet that person again so that you can show different sides of yourself.5)

Come in 30 Minutes Early & Stay a Little Late to See How People Behave

“Many aspects of a company’s culture can be subtle and easy to overlook,” writes one expert. “Instead, observe everything.” Thus, try coming in early and staying a little late just to observe how people operate—where they take their lunches, for example.

Get to Know Some People & Listen to What They Have to Say

“You’ve got to realize that networking inside a company is just as important as when you were networking on the outside trying to get in,” says a business consultant.6 During the first two weeks, get to know a few people and try to have lunch with them. Find out how the organization works, how people interact with the boss, what the corporate culture encourages and discourages. Walk the halls and get to know receptionists, mail room clerks, and office managers, who can help you learn the ropes. Your role here is to listen, rather than to slather on the charm. Realize that you have a lot to learn.7

Make It Easy for Others to Give You Feedback

Ask your boss, coworkers, and subordinates to give you feedback about how you’re doing. Be prepared to take unpleasant news gracefully.8 At the end of 30 days, have a “How am I doing?” meeting with your boss.

Overdeliver

Because performance reviews for new hires generally take place at 60 to 90 days, you need to have accomplished enough—and preferably something big—to show your boss your potential. In other words, do as the Welches suggest: overdeliver.

For Discussion How does the foregoing advice square with your past experiences in starting a new job? Are there things you wish you could have done differently?

We consider organizational cultures and organizational structures, and how they should be aligned to help coordinate employees in the pursuit of organization’s strategic goals. We then consider the three types of organizations and seven basic characteristics of an organization. We next discuss seven types of organizational structures. Finally, we look at five factors that should be considered when one is designing the structure of an organization.

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Aligning Strategy, Culture, & Structure

Why is it important for managers to align a company’s vision and strategies with its organizational culture and structure?

THE BIG PICTURE

The study of organizing, the second of the four functions in the management process, begins with the study of organizational culture and structure, which managers must determine so as to implement a particular strategy. Organizational culture consists of the set of shared, taken-for-granted implicit assumptions that a group holds in the workplace. Organizational structure describes who reports to whom and who does what.

“What’s your favorite movie?” the job interviewer asks you. “Your favorite website?” “What’s the last book you read for fun?” “What makes you uncomfortable?”

These are the four most frequently asked interview questions used by hiring managers, according to a survey involving 285,000 kinds of interview questions.9 For you as a job applicant, these questions might not seem to have much to do with your performance in previous jobs. Rather, they are designed to see whether you will fit in with the company’s culture, or organizational culture, as we’ll explain.10

What Does It Mean to “Fit”? Anticipating a Job Interview

The kind of fit we are concerned with here is what is called person-organization fit, which reflects the extent to which your personality and values match the climate and culture in an organization.

A good fit of this kind is important because it is associated with more positive work attitudes and task performance, lower stress, and fewer expressions of intention to quit (“I’m gonna tell em, ‘Take this job and . . .’”).11 How well an applicant will fit in with the institution’s organizational culture is considered a high priority by many interviewers. Indeed, more than 50% of the evaluators in one study considered “fit” to be the most important criterion of the interview process.12

How can you determine how well you might fit in before you go into a job interview? You should write down your strengths, weaknesses, and values—and then do the same for the organization you’re interviewing with, by researching it online and talking with current employees. You can then prepare questions to ask the interviewer about how well you might fit.

Example: If being recognized for hard work is important to you, ask the interviewer how the company rewards performance. If the answer doesn’t show a strong link between performance and rewards (“Well, we don’t really have a policy on that”), you’ll probably have a low person-organization fit and won’t be happy working there.

How an Organization’s Culture & Structure Are Used to Implement Strategy

How employees fit into an organization’s culture is important to the larger picture of that organization’s strategy. Strategy, as we saw in Chapter 6, consists of the large-scale action plans that reflect the organization’s vision and are used to set the direction for the organization. To implement a particular strategy, managers must determine Page 227the right kind of (1) organizational culture and (2) organizational structure. Let’s consider these terms.

Organizational Culture: The Shared Assumptions That Affect How Work Gets Done We described the concept of culture in Chapter 4 on global management as “the shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people.” Here we are talking about a specific kind of culture called an organizational culture.

According to scholar Edgar Schein, organizational culture, sometimes called corporate culture, is defined as the set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments. 13 These are the beliefs and values shared among a group of people in the workplace that are passed on to new employees by way of socialization and mentoring, which significantly affect work outcomes at all levels.14 This is the “social glue” that binds members of the organization together. Just as a human being has a personality—fun-loving, warm, uptight, competitive, or whatever—so an organization has a “personality,” too, and that is its culture.

The culture helps employees understand why the organization does what it does and how it intends to accomplish its long-term goals. 3M sets expectations for innovation, for example, by having an internship and co-op program, which provides 30% of the company’s new college hires.

Culture can vary considerably, with different organizations having differing emphases on risk taking, treatment of employees, teamwork, rules and regulations, conflict and criticism, and rewards. And the elements that drive an organization’s culture also vary. They may represent the values of the founder, the industry and business environment, the national culture, the organization’s vision and strategies, and the behavior of leaders. (See Table 8.1 .)

We thoroughly discuss organizational culture in Sections 8.2 and 8.3.

TABLE 8.1 What Drives an Organizational Culture?

Organizational Structure: Who Reports to Whom & Who Does What Organizational structure is a formal system of task and reporting relationships that coordinates and motivates an organization’s members so that they can work together to achieve the organization’s goals. As we describe in Sections 8.4–8.6, organizational structure is concerned with who reports to whom and who specializes in what work.

Whether an organization is for-profit or nonprofit, the challenge for top managers is to align the organization’s vision and strategies with its organizational culture and organizational structure, as shown in the two orange boxes in the drawing below. (See Figure 8.1 .)

FIGURE 8.1 Drivers and flow of organizational culture

Figure 8.1 shows that the consistency among these elements in turn impacts (see the three green boxes) group and social processes (discussed in Chapters 13–15), individual work attitudes and behaviors (discussed in Chapters 11–12), and the organization’s overall performance. As you can see from the diagram, consistency across strategy, culture, and structure leads to higher performance.

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 EXAMPLE

How Strategy Affects Culture & Culture Affects Structure: EndoStim, a Medical Device Start-up, Operates Virtually

Nowadays a firm can be completely international. An example is the medical device start-up EndoStim, nominally based in St. Louis but operating everywhere.

The company, reports New York Times columnist Thomas Friedman, came together as a result of some chance encounters:15 Cuban immigrant Raul Perez, a physician, came to St. Louis, where he met Dan Burkhardt, a local investor, with whom he began making medical investments. Perez also suffered from acid reflux (abnormal heartburn caused by stomach acid rising in the esophagus) and went to Arizona for treatment by an Indian-American physician, V. K. Sharma. During the visit, Sharma proposed an idea for a pacemaker-like device to control the muscle that would choke off acid reflux.

The Strategy: Creating a New Medical Device. Perez, Burkhardt, and Sharma all agreed they wanted to build such an electrical-stimulation device. They joined forces with South Africa–born Bevil Hogg, a founder of Trek Bicycle Corporation, who became the CEO of the company they named EndoStim and who helped to raise initial development funds. This strategy then began to dictate who they had to work with, which in turn influenced the company’s culture and structure.

The Culture: An International “Adhocracy.” To advance their strategy of building the device, the four principals recruited two Israelis, a medical engineer and a gastroenterologist. The Israelis collaborated with a Seattle engineering team to develop the design. A company in Uruguay specializing in pacemakers was lined up to build the EndoStim prototype. It was arranged for the clinical trials to be conducted in India and Chile. How much more international can you get?

Thus, the culture of the company could be called an adhocracy, which (as we’ll describe a little later in the chapter) is a risk-taking culture that values flexibility and creativity and that is focused on developing innovative products.

The Structure: A Virtual, Boundaryless Company. As a very lean start-up operating all over the world, with the principals rarely in the same office at the same time, EndoStim is clearly very different from, say, the usual top-down organization operating in one locality. To access the best expertise and high-quality materials and obtain low-cost manufacturing anywhere around the globe, EndoStim thus was forced to take advantage of all the technological tools—teleconferencing, e-mail, the Internet, and faxes—to maintain communications.