BUS 189 – January 18, 2011

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Mechanistic Organization or a Bureaucracy
: centralized control
: lots of standards

Firms that are less differentiated, flatter, fewer boxes on organization chart, use more
decentralized decision-making and fewer standards
: Organic
: e.g. Google
: very flexible
: many start-ups

Mechanistic are relatively inflexible and do not change easily

As org's become larger, inevitably become more bureaucratic

: yet in world where environment changing fast, look for quick decision-making; look to co.'s to
become more nimble and flexible ← characteristics bureaucracies don't have
: environment more complex and dynamic (rate of change is increasing)
: in the long run, get rid of vertical command structures and move towards organizations w/lots
of teams and much more focus on horizontal org.'s
: integration issue becomes much more important (how do we get everyone on the same page?)

Facebook, Google have 3 or 4 levels; size of old GM (23 levels)

: real challenge for managers today—how do we stay nimble/flexible but still maintain ctrl you
need?
: differentiation, integration, centralization vs decentralization, and standardization
(opposite is mutual adjustment)
: strategy drives structure
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if part of core competence, do not contract out
: need to understand source of one's comp adv;
: could cost you your comp adv
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EXAM TOMORROW 19 Jan Ch05-09

Th/F → Case Presentations

FRIDAY at 9:30
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EXAM ALL M/C ← no essay
-no chap more important than others
-all come out of textbook
-take an hour to complete, most likely
-might want to make arrangements w/team; final in-class opportunity before presentations
begin, to resolve any issues
-run-thru?
-expectations for quality of presentation/paper are high b/c certainly had ample opportunity
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Almost any co. that is multidivisional (independent process ctr's), corporate is functionally
organized.
: co. functional at corporate lvl- simple product line serving one or fewer markets
 : McDonald's? But have int'l and domestic division (Geographic), but everything else is
functional
: Wal-Mart tends to be geographic
: ALCOA has some vertical integration
: 7-11 (probably geographic); franchise
: most retail org's are geographic (like Wal-Mart)
every org has some part that is functionalized (typically corporate staff)

If not multidivisional (freestanding profit ctr's), probably would be functionally organized

: smaller co.'s are almost always functional (start-ups)

most large co.'s have diff structures (geographic, functional, e.g.)