TAKE AWAYS FROM SESSION 1 OF ORGANIZATIONAL THEORY and DESIGN

Examples of how much the organization is important inside a company:

- Costa Concordia (non-correct organization)
- Eataly (Correct organization – giving motivation to employees, possibility
to eat at their restaurant, supplementary salary)
- Ferrero (Correct organization – expansion by acquiring Nestlè U.S.)
- Ryanair (Non-correct organization – employees are striking against pay
and conditions, non-correct communication between employees and the
C.E.O)
- Rio Olympic Games (Non-correct organization - structures for the games
not ready yet, lack of information about how to reach the buildings)
[Link] of organization and of organizational structure.
Organization: an organization is a tool that people use in order to coordinate
their actions to obtain something they desire or value.
Organizational structure: is the formal system of tasks and authority
relationships that control how people coordinate their actions and use
resources to achieve organizational goals.
[Link] why organizations exist.
Organizations exist for several reasons:
- To increase specialization and division of labour:
• division of labour allows specialization
• specialization allows individuals to become experts at their jobs
- To use large-scale technology: large scale economies
• Economies of scale: cost savings that result when goods and services
are produced in large volume on automated production lines.
• Economies of scope: cost savings that result when an organization is
able to use underutilized resources more effectively because they can
be shared across different products or tasks.
- To manage the organizational environment:
• An organizational environment is the source of valuable input
resources and is the marketplace into which it releases outputs
• It is the source of economic, social, and political pressures that affect
an organization’s ability to obtain these resources.
 - To economize on transaction costs (transaction costs are associated with
negotiating, monitoring ang governing exchanges between people)
- To exert power and control: organizations can exert great pressure on
individuals to conform to task and production requirements in order to
increase production efficiency.
3. Basic definition (design, change, culture)
Organizational design: is the process by which managers select and manage
aspects of structure so that an organization can control the activities necessary
to achieve its goals. So it is about designing the organizational structure of the
company by assigning specific tasks to employees within the firm.
Organizational change: is the process by which organizations redesign their
structures and cultures to move from their present state to some desired
future state to increase their effectiveness.
(Enel has got a Matrix structure because of its international dimension, before
having this kind of structure it had got a functional one)
KPI: key performance indicators
Organizational culture: is the set of shared valued and norms that controls
organizational members’ interactions with each other and with suppliers,
customers, and other people outside the organization.
Importance of values to face the crisis: Values of the future:
• Quick and deep, seize the moment
• Unique and universal, be a person
• Crucial and sustainable, do the right thing
• Trust and sharing, create credibility
4. Reasons why organization design and change are important
Organization design and change are important to:
- Deal with contingences: A contingency is an event that might occur in
the environment and must be planned for, the design of an organization
determines how effectively an organization is able to respond to various
pressures in its environment and so obtain scarce resources.
The main challenges that an organization must now be ready to face are:
• Globalization
 • Changing technology
Ex. Quantas
- Manage diversity: by diversity we mean differences in the race, gender
and national origin of organizational members that have important
implications for organizational culture and effectiveness. Managing
diversity is so important because learning how to effectively utilize a
diverse workforce may result in better decision making and more
effective workforce.
- Gaining competitive advantage: a competitive advantage is the ability of
one company to outperform another because its managers are able to
create more value from the resources at their disposal
Ex. Fiamm (Produces horns for safety and antennas)
5. The possible damages of bad design
A bad and poor organizational design may cause very bad consequences with
the company at it can cause:
- The decline of the organization
- Talented employees to leave their positions in order to take positions in
growing organizations
- Resources to be harder to acquire
- The process of value creation slows down
- Unethical behaviour is more likely
But which are the organizational root of a crises?
- Flattening and increasing the autonomy of each hierarchical level
- Decentralization of legal staff
- Decentralization of control staff
TAKE AWAYS FROM SESSION 2 OF ORGANIZATIONAL THEORY and DESIGN
[Link] concepts to be applied to case study 1:
Horizontal differentiation: is the extent to which tasks in the organization are
subdivided into separate units, and jobs. Horizontal differentiation can be:
- High horizontal differentiation: that consists in a deep subdivision with many
differentiated and specialized units (high labour division)
- Low horizontal differentiation: that consists in few subdivisions with few and
large units (low labour division)
Advantages of horizontal differentiation:
- Specialization: economies of scale and scope
- Control
- Attribution of responsibilities: it’s clearer what each employee has to do
within the company, less confusion.
Disadvantages of horizontal differentiation:
- Lower horizontal info sharing
- Less autonomy, higher control
- High costs of coordination
Vertical differentiation: is the extent to which the organization is vertically
developed.
Advantages of vertical differentiation:
- Effective control, supervision over employees, feedback
- Use of the career as motivational tool
Disadvantages of vertical differentiation:
- Low autonomy
- Empowerment
NB: When we look at an organizational chart and we consider the layers we do
not have the count the one of the C.E.O.
Strictly connected to the conception of vertical differentiation is:
- The Span of control: it is the number of people that the boss controls, the
higher the number of people he controls is, the more the organizational
structure is flatter.
Formalization: is the extent to which jobs within the organization are
standardized. Formalization can be:
-High formalization: when job descriptions are explicit and there are clearly
defined procedures
-Low formalization: when job behaviours are relatively not programmed and
there is a lot of discretion in task development
Advantages:
- Low ambiguity
- Keep track of performance
- Replicate procedures, economies of replication: economies of learning
(cost savings from replicating the same operation over and over again)
Disadvantages:
- Less autonomy, initiative and expression
- Low innovation
Centralization: is the extent to which decision making is concentrated at a
single point in the organization. In this case the centre so the top management
makes the decisions with little or no input from the lower levels. Key word:
authority
Advantages of centralized structures:
- More control, empowering
- Faster decision because the boss is the one who decides
- High efficiency in decision making
Disadvantages of centralized structures:
- Empowering less people
- Motivation is low
Decentralization: is the extent to which decision making is not concentrated at
a single point in the organization. Therefore, the personnel can make decisions
autonomously. Key word: team
To sum up:
1. If horizontal differentiation, vertical differentiation, formalization and
centralization are HIGH, then the organization has LOW ORGANIZATION
FLEXBILITY, and looks like a MECHANIC SYSTEM.
2. If horizontal differentiation, vertical differentiation, formalization and
centralization are LOW, then the organization has HIGH ORGANIZATION
FLEXIBILITY, and looks like an ORGANIC SYSTEM.
CASE STUDY 1
THE BEGINNING: Naissance of Smart-up and Bright-on, two companies
operating in the electronical field. Both of them are assembly companies,
therefore they assembly smartphones. Both of the companies are small ones,
with similar profit as well as similar number of employees.
SMART COMPANIES: in 2012 Smart Company was acquired by another
company. But as the acquired was not interested in the production of
electronical devices, the aim of the company, he sold it to two different
investors which lead to the creation of two distinguished companies:
- Smart-up: kept the same management composition and promoted the
director of the facilities, Nick Hault, to general director. With 500
employees and revenues for 10 million dollars a year, Smart-up was
more efficient than Bright-on and obtained higher profits.
- Bright-on: hired a new director, Tom Higgs, who has been previously the
head of big resources laboratory in the field of electronics. Bright-on had
revenues for 8 million dollars and had 480 employees. With the
disappointment of the director, it was less efficient and obtained lower
profits than Smart-up.
HOW THE TWO COMPANIES WERE MANAGING THE DAILY WORK:
- Smart-up
• Horizontal differentiated with specialised units, high labour division
• High vertical differentiation
• High formalization
• Centralization: well-organized company, through a strict
organizational structure hierarchically developed allowing
centralization due to the “all around” figure of the director
 • Developing technical abilities, easy to train young employees for very
specific jobs with detailed tasks
• The director was assigning very detailed tasks to all the employees,
specialization
• Front-line managers were complaining about their limited role, would
have liked to broaden their decisions
• Second-line managers were arguing about too-fractioned tasks
• Employees do not have a broaden vision of what is going on in the
company
• Within the company there are lot of procedures and documents to
organise the daily work, formalization
• Mechanic system
- Bright on:
• Low horizontal differentiation, few subdivisions which leads to low
labour division
• Low vertical differentiation
• Very lower formalization compared to Smart-up
• Decentralization: less centralized organizational structure, the
director doesn’t believe in organizational chart, the structure is
flattered, there is more interaction between employees and all the
decision are taken together
• Lower specialization, there are no specific tasks to be performed, as a
result there’s a waste of time to inform the colleagues about what
was going on, but still employees fell what is going on within the
company
• Difficulty to understand the role of the employees
• Training is a long process, but has a positive impact on the motivation
of young employees
• Organic system
ISSUE WITH THE OLED SCREENS
Both the two companies, Smart-up and Bright-on, had been asked to assembly
smartphones specifics: screens.
Both of the two companies had to face the problem of the missing of one
component, the OLED screens, as the producer had stopped the production for
the summer holidays.
 - Smart-up had several problems with the production of the screens. They
delivered the products with delay in respect to Bright-on and some of
the screen produced also were defective.
- Bright-on produced and delivered the screens in the due time without
any defection: all of them passed the quality test.
SO WHY DID SMART-UP WIN THE CONTRACT?
Smart-up won the contract thanks to its internal system. In fact, contrary to
Bright-on that has got an organic system in which everybody is almost on the
same level, Smart-up has got a mechanic system. The mechanic structure
owned by Smart-up makes possible to produce the same products faster
allowing a cost reduction.
The client, added two more directives to the contract underlined:
1. The will the cut final cost
2. The will to maintain a “zero defects” production
If we compare the two Smart Companies, it’s easy to understand that Smart-up
is the one that owns a mechanic and hierarchical structure that allows cost
reduction as well as a “zero defects” production.
[Link] and the Scientific Organization of Work
Taylor published in 1911 the “The principles of Scientific Management” that
underlined the importance of the following aspects:
- Scientifically study each part of a task and develop the one best way of
performing it
- Select the best person to do the job
- Train, teach and develop the worker
- Provide financial incentives for following the methods
- Divide work and responsibility so that managers are responsible for
planning the work and workers are responsible for performing the work
accordingly.
[Link] Model Design Rule: Organization-Environment Fit
NB: it is fundamental to consider the environment around an organization,
therefore it’s important to analyse if its environment is complex and dynamic or
if it is simple and stable.
Environment: all the actors and activities outside the boundaries of the
organizations: ex. The public administration system, universities and research
centres, suppliers, competitors, clients.
The environment can be described according to its uncertainty:
- Volatility (in terms of time) that describes how fast the environment
configuration can change
- Complexity that describes how much heterogeneous and diverse the
activities and the actors external to the organization are, as well as how
they interact
[Link] to reach high efficacy and efficiency in highly complex and dynamic
environment?
ORGANIC MODEL
In highly complex and dynamic environment it is possible to reach high efficacy
and efficiency through:
- Low division of labour and specialization, which means low horizontal
differentiation
- Low formalization and standardization
- Decentralized and team-based communication
- Horizontal cooperation
- Flat structure
- High span of control
[Link] to reach high efficacy and efficiency in simple and stable
environments?
MECHANIC MODEL
- High specialization and division of labour, high horizontal differentiation
- High formalization and standardization of procedures
- Hierarchy-based relationships and tasks
- Low span of control
- High number of hierarchical levels
- Top down communication
- Low reliance on team-based working
TAKE AWAYS FROM SESSION 3 OF ORGANIZATIONAL THEORY and DESIGN
[Link] Case – Vertical Integration
Osi in 2012 through an increasing vertical integration passed from providing
processed meat to restaurant chain like Yum and McDonalds to the
integration, with the inclusion of meat and vegetables production through
three big farms.
So, what’s the aim of vertical integration?
Vertical integration is able to answer to new contingences:
(a contingency is an event that might occur in the environment and must be
planned for, the design of an organization determines how effectively an
organization is able to respond to various pressures in its environment and so
obtain scarce resources).
- New regulation – safety issues
- More attentive customers
- Larger customer base
Once the business is vertically integrated there are more opportunities to
expand the business such as creating a retail brand, enlarge the customer base
or change the price policies.
Definition of vertical integration:
Vertical integration is a strategy where a firm acquires business operations
within the same production vertical. It can be forward or backward in nature.
Vertical integration can help companies reduce costs and improve efficiencies
by decreasing transportation expenses and reducing turnaround time, among
other advantages. However, sometimes it is more effective for a company to
rely on the established expertise and economies of scale of other vendors
rather than trying to become vertically integrated.

Specifically, vertical integration occurs when a company assumes control over

several production or distribution steps involved in the creation of its product
or service in a particular market vertical. Vertical integration can be carried out
in two ways: backward integration and forward integration. A company that
expands backward on the production path into manufacturing is assuming
backward integration, while a company that expands forward on the
production path into distribution is conducting forward integration.
[Link] traditional link

According to Potter there’s a strong link between the strategy the firm adopts
and the competitive advantage the firm owns.
Therefore strategy is a positioning process, that comes from the so-called
Positioning School.
According to Porter:
• The industry position explains the competitive advantage of the
company. In fact, the industry position explains a portion of the
company competitive advantage (about the 20%).
• The relative position within an industry explains the competitive
advantage. In some industries some firms are much more profitable
than others. Ex. GM vs Toyota: they have the same relative position
in the same industry but they have huge performance difference. The
relative position explains a portion of the company competitive
advantage (about the 25%).
So, to sum up:
THE RELATIONSHIP BETWEEN STRATEGY and COMPETITIVE ADVANTAGE IS
MEDIATED by:
• The industry position which explains a portion of the CA
• The relative position which explains a portion of the CA
So, the relationship between strategy and competitive advantage is mediated.
The mediators are different from company to company, as the strategy is only
the starting point to get e competitive advantage and can be similar to
different companies. That’s why in competitive contexts strategies become
more and more similar, what makes the difference is the execution.
The most relevant mediator is THE EXECUTION that is made possible thanks to
ORGANIZATIONAL DESIGN.

So, what is organizational design?

Organizational design is a set of choices regarding the allocation and
combination of resources and activities and the authority relationships among
them, it includes:
• The allocation of the activities to the units: STRUCTURE as LABOUR
DIVISION
• The coordination of the activities allocated to different units:
STRUCTURE AS A SET OF AUTHORITY RELATIONSHIPS
• The incentives in doing the assigned activities: CULTURE and HR
PRACTICES
The main objects of organizational design are:
• Setting the structure that is the solution of the labour division and
coordination
• Setting the culture background of the industry
• Mechanisms that allow the business to operate

To sum up:
• The relationship between strategy and competitive advantage is
mediated
• Execution is the relevant mediator in the value creation process and
Organization Design makes Execution possible through the resource
allocation and coordination
• The primary top management responsibility is to identify the
company strategy and its organization form
ORGANIZATIONAL CHART
As one of the most important aims of organizational design is to find the most
suitable structure for a company, organizational charts are fundamental as
they are the graphical representation of the structure.
Thanks to the “boxes” we understand how activities are allocated to
organizational units, while thanks to lines we understand the relationship
among units.

The organizational chart can be considered as the set of beliefs, the incentive
system that shapes workforce behaviours and, therefore, the execution of the
strategy in the daily activities of the employees.
TAKE AWAYS FROM SESSION 4 OF ORGANIZATIONAL THEORY and DESIGN
[Link] Case.
Semco was considered by experts as one of the most innovative democratic
workplaces in the world thanks to the innovations made by Ricardo Semler, the
majority stakeholder of the company.
The company promoted principles of democracy, transparent communication,
constructive dissent, creativity, and employee growth. The outcome was
noteworthy.
But the company has not always been like this. It has in fact achieved those
results thanks to a cultural metamorphosis that turned a top-down hierarchical
and autocratic set-up into an innovative one.
BACKGROUND NOTE – STRATEGY with ANTONIO
Semco was established in 1953 in San Paolo.
Strategy under Antonio:
At the beginning the company was just producing one product: marine pumps,
and many of them were suppling to Brazil Shipbuilders. Therefore it was a one
product, one nation company.
Structure under Antonio:
Mechanic system: vertical differentiation, centralization, formalization, likely
financial rewards based on productivity and presence, high specialized tasks.
The structure was likely functional.
Values, incentive system and management behaviours:
Fear, control.
STRATEGY WITH RICARDO
Strategy under Ricardo:
In 1982 Antonio’s son, Ricardo took charge at Semco. When he took charge the
company was a financial disaster. So, at first he focused on ensuring that the
company remained solvent. After the company’s financial condition improved,
he moved to purchase other companies and explored new businesses.
Ricardo introduced product differentiation.
When the financial condition of the company got better Ricardo started the
“harmonization” process in order to harmonize the relationship between
employees. He gave employees more autonomy that were allowed to work
flexible hours. He discovered that the greater the autonomy of employees the
grater was their adaptability and the efficiency of Semco.
Structure under Ricardo:
[Link] the beginning at Semco there was no organizational chart. Every business
had complete autonomy and within each of these divisions, the strategy was
decided by self-run teams.
More over Semco did not plan activities for a period longer than 6 months.
Each business division was self-ruled and could also conduct a new business
proposition being also allowed to retain a pre-determined percentage.
The main reason of the business expansion is due to Ricardo’s openness.
He then tried out different structures until he found the best one for the
company.
[Link] decided to experiment a functional structure he was not satisfied
with this one.
[Link] then tried for a brief experiment the Matrix Structure but as he was
concerned at maintaining the satisfaction of workers this one turned out not to
be the best one.
[Link] comprising independent business division each headed by a
General Manager.
[Link] reverted the functional structure.
[Link] and definitive structure: CONCENTRIC CIRCLES, C.E.O appointed every six
months.
This structure can be described as follows:
- It is still a divisional structure but it is:
• Less vertically differentiated (+ autonomy, + span of control)
• Team-based communication: budget autonomy, global goals
• C.E.O appointed every six months
 C.E.O.

Counsellor

Coordinators

Associators

Values, incentive system and management behaviours:

Ricardo adopted several innovations in order to reach the previously called
“harmonization” of the employees by introducing some HR practices values.
1. AUTONOMY: employees were free to determine their respective salaries,
they were not evaluated on the basis of number of work hours but on the
basis of their results.
Semco motto is: “As long as you’re getting the job done for yourself and
the company, you’re free to manage your own time”.
There was just a sort of Survival Manual but no other written policies or
regulations.
Ricardo believed in the theories of trust vs theories of control being sure
that people perform very badly when they fell like they’re under control.
2. DOING ONLY WHAT WAS NEEDED: for employees there was no
compulsion to attend any meeting, they only had to put down what really
was necessary.
3. BOTTOM-UP APPROACH: the employees themselves nominated the
corporate executives. They could even veto the C.E.O.’s decisions.
Moreover, even though Ricardo was the major shareholder at Semco, he
had a single vote just like all the other employees of the company.
There were no official designations. All the employees chose their
manager by vote.
4. LEADERSHIP EARNED: every Semco manager was appraised on a half-year
basis by his/her team members through multiple choices questions.
Semler expected the managers to be calm, just, affable, capable of
delegation, dependable and efficient.
5. TRASPARENCY: Semco also maintained complete financial transparency.
There was no information which could be categorized as confidential
within the company.
6. INDIVIDUAL DRIVEN: Semco wanted to combine personal challenges and
gratification of employees with organizational objectives. At Semco each
employee was in charge of his/her own career.
7. BALANCE APPROACHED
[Link] HRM meaning: Alignment

A strong and determined competitive advantage can originate from the so-
called alignment between the strategy, the structure of the company and the
cultural values of a company.
This alignment consists in a specific attention to organization design, HR and
values that have to male strategy and values explicit and support them by
influencing consistently employee’s behaviour.
TAKE AWAYS FROM SESSION 4 OF ORGANIZATIONAL THEORY and DESIGN
Several types of organizational structures:
• Pre-evolved structure
• Functional structure
• Modified-functional structure
• Divisional structure
• Divisional structure with centralized functions
• Matrix structure
CASE STUDY: APPEX Case
Gosh profile: graduated from Harvard Business School, Gosh accepted in 1988
the position as Chief Operating Officer of Appex Corporation, with the
understanding that shortly therefore he would have been made the company’s
C.E.O.

He left BCG consulting group where he was focusing on organizational structure.

The company background: at the beginning the company was entrepreneurial,
technology-driven and loosely structured. Referring to Gosh first description of
the company he underlined that everybody just did what they felt like. It was
clear that Appex needed control and structure.
The company was founded in May 1986 and provided management information
systems and intercarrier network services to cellular telephone companies. In
1990 the company was rated as the fastest growing high-technology company
in the US. In the same year Appex employed 172 people.
Appex was founded four years later the beginning of the cellular industry in the
States and its growth perfectly combined to the rapid growth of subscribers of
the cellular telephone industry.
Appex’s products and services: Appex provided service to cellular carriers to
allow them to manage their customers in their “home” and “roam” territories.
Appex’s products and services could be divided into two different categories:
• ICS, responsible for the 60% of revenues
• IS, responsible for the 40% of revenues
Structure with the first C.E.O of Appex: Brian Boyle: the C.E.O. believed that
formal procedures were unnecessary considering the small size of the company.
There was a lot of CENTRALIZATION as the executives made all the decisions.
Employees were involved in developing and selling products. The structure was
vert informal and fluid. Employees were focused, committer and hardworking,
and worked in close interaction with each other. As a result Appex was very good
and effective at getting things done quickly and relatively cheaply. The company
was at that time project-based which means that work was organized around
projects. As the number of projects increased, people worked on more and more
projects at once. And when the workload seemed to be overwhelming, the
company hired more people. Therefore Appex was spending very quickly and
wasn’t monitoring its expenses.
As a consequence the company was very fast at bringing new products in the
market and thanks to Boyle’s innovative technical solutions the company was
also able to compete against established firms. The company, moreover, was
spending too much.
To sum up: main concept of Appex’s situation before Ghosh’s arrival:
- No formal procedures: Ghosh quotes: “The C.E.O. came up with ideas, the
engineering manager converted them into reality and the finance
manager made sure the company didn’t run out of money”.
- Centralization
- Loosely structured
- Project based work
- No planning, schedules, meetings
- No financial planning
- No accountability
- Company was growing too fast for its financial possibilities
Problems caused by this kind of organization:
- Customers began to complain as the company could not answer to all
clients
- The volume of customers began to increase and Appex was not able to
handle the increasing demand
- The company was behind the schedule and was missing installation dates
- It experienced failures in product development
- Difficulty in the information flow
 - No financial planning
- No clear responsibilities: people didn’t know what to do
- Appex was becoming unproductive
Basically the company was paralysed.
At the beginning Appex presented a PRE-EVOLVED structure as there were only
two hierarchical levels: the directive and the operative one.

[Link]-evolved structure
There are two configurations of the pre-evolved structure: the centralized one
and the peer based one.

In this kind of structure there are only two levels: the directive one and the
operative one.
- Operative level: the degree of specialization changes depending on the
strategic choices of the directors/executives, but it is usually low.
- Directive level: responsible for the decision making that are handled by
the general director
- The centralization can be either very high or very law, depending on the
configuration
- It is always scarcely formalized, formalization is very low
This kind of structure is suitable for small sized organization (Entrepreneurial or
small family business).
Pre- evolved structures are also the PEER-BASED as:
• Members are equally entitled to all decision, control and property
rights
 • Administrative responsibilities are allocated by election or by rotation
Advantages of the pre-evolved form:
- Information sharing
- Innovation, the company has to be fast
- Collaboration within employees
Disadvantages of the pre-evolved form:
- The company can’t face growth neither internally nor in the market

Ghosh tried at first to change the original pre-evolved/ peer based structure of
Appex by trying some of the innovative organizational structures he had
envisioned as a BCG consultant.
He tried at first a CIRCULAR STRUCTURE that was composed of concurrent circles
expanding out from a middle circle. The innermost circle contained the senior
executives. The next one included managers of functions and employees in the
functions. In the environs around the circle there were Appex’s customers. The
aim of such a structure was to create a non-hierarchical organization in which
information could freely flow. But this structure did not work as:
- Employees could not relate to the circular structure
- This structure developed a mentality that was considering the customer
as an enemy
- It was towards any form of planning
He then tried a HORIZONTAL STRUCTURE but the employees did not respond
enthusiastically.
Ghosh understood that innovative structures for a company like Appex were
inadequate. So he decided to adopt a new strategy that consisted in at first
getting the control of the company through a traditional and hierarchical
structure with the aim of achieving control on the structure.
 That’s why Ghosh transformed Appex’s structure into a Functional one (2).

In a functional structure the first level units are specialized by functions

(sale/marketing, operation, engineering, finance etc.). functions are defined
as a set of activities grouped together by technical similarities.
The first level units have partial and specialized goals (cost centres or
revenues centres).
While the interdependencies among functions are managed by rules,
procedures and hierarchy. If there is a conflict among functions the C.E.O.
intervenes. That’s why in Appex, for example, Ghosh was overwhelmed by
all the decisions that he had to take.
Strength and weakness of functional structure:
Strength of functional structure:
- Economies of scale and specialization
- Accomplishment of functional goals
- Competence and process innovation such as technical skills growth and
specialization that is combined with process sophistication: the more
you practise, the more you become good at it.
Weakness of functional structure:
- Top hierarchy information overload
- Poor horizontal coordination
- Slow response time to environmental changes
- Conflicts across functions: functions as silos that nurture their own
cultures
- Bureaucracy and formal power over actual tasks
- Difficulties in the C.E.O ’s succession, there are no chances to develop
managerial competences
 - Turns out in a very political structure
For which kind of industries does the functional structure work?
- Usually the functional structure works for stable industries as you don’t
have to be that fast to respond.
- In companies that are focused on competencies and not on products.
Ex. Apple has got a modified functional structure even though it is a big
company.
- For companies that are concerned in cost reduction, it comes from the
opportunity of economies of scale and scope.
- The source of competitive advantage for this companies is economies of
scale and scope and not growing through products differentiation.
Usually one product or some similar products means that the company
is sharing the same assets for the production of the goods it is
producing. This allows economies of scale and of scope.
Back to the Appex Case: modified-functional structure (3).
FUNCTIONAL STRUCTURE + PRODUCT TEAMS
As the functional structure had some clear disadvantages Ghosh decided to
add, after the advice given by the General Manager, product teams for each
Appex’s main product. Ghosh started hiring products managers and to
establish product teams. But the product teams co-existed with the functional
teams and this generated new problems.
Therefore with the addition of product teams there were some new problems
to face:
- There was no system that specified who had to authority to make which
decisions
- The conflict between product managers and operations people became
acute
- The products managers, who developed marketing strategies often did
not know the products as well as the operations people
- The product team did not know where their authority ended
- Each product team wanted its product to be the highest priority of the
engineering department
- More allocation problems, managers did not have enough power to
control over product teams
FUNCTIONAL STRUCTURE + BUSINESS TEAMS
In response to the authority and resource allocation problems, Ghosh
created business teams. The business teams were intermediaries between
the product teams and the corporate management and had the authority to
make decisions, including allocation decisions, regarding the products.

Those two structures described as functional + products teams and

functional + business teams are always functional structures with the
addition of one integrator (product teams) in the first case, and with the
addition of two integrators (business teams + product teams) in the second
case. The introduction of integrators makes a structural modification
changing the structure from a functional structure to a modified-functional
one.
Which are the advantages of a modified-functional structure?
- Better integration among functions
- Better product monitoring
Which are the disadvantages of a modified functional structure?
- Authority and resource allocation problems (who in controlling and
deciding what? As well as competition among product managers)
- Higher costs
 When to use a modified-functional structure?
- When the environment and the characteristics of the organization are
similar to the ones for the functional form, but we usually have different
products rather than one
- Increased interdependencies among function, which leads to an increase
for integration and coordination
Focus on the product manager, also with WATERFOREVER example.
Waterforever is a small-size company in the soft beverages industry located in
Montana very close to one of the major natural water sources in the world. The
company has been going trough a rapid expansion with the introduction of 4
new products in addition to the traditional one (natural sparkling water). The 4
new products are: IperVitamic sparkling Lemonade, Low Sodium Rose Water,
Natural Fruit Ice Sticks and Chamomile drink. Due to the expansion in 4 new
markets, the traditional product of sparkling water still accounts for 50% of
company revenues. Nowadays the organizational structure is a functional one
with 4 line units (production, Marketing and Sale, R & D, purchase) and3 staff
units (HR & organization, administration, general services).
ORIGINAL STRUCTURE: technical info:
- Span of control: 7 (Staff Units + functional units)
- Horizontal differentiation: 4 (Functional units)

C.E.O

HR & organization

Administration

General services

Production Marketing and sale R&D Purchase

Problems with the original functional structure:
- Conflicts among functions
- Interdependencies across functions
- The company is losing power and control
- It’s difficult to assign responsibilities
- The products are suffering
Solution: new organizational arrangement: changing the structure from a
functional structure to a modified functional structure. How?
With the introduction of two products managers : one for the production of
water that represents the 50% of Waterforever production, and the other
manager for the other products, that represent the other 50% of the company
production. Actually, also five product managers (one for each product) is okay.
Why isn’t it possible to set a divisional structure? Because the company is too
small.
DIVISIONAL STRUCTURE (4)
Definition:
- The first level units are specialized by strategic business areas (division)
- Activities are grouped together by products, geographical area,
customers
- The first level units are profit and loss centres
- At the second level, there are the functions specialized by products,
markets, customers.

In a divisional structure each time has all the functional representative. Basically,
a division is a multifunctional team dedicated to one product. In this way
organizations can solve the problem of coordination and interdependencies as
everyone has to report to the same head.
Strength and weaknesses of divisional structure:
Strengths:
- Complete accountability: clear product/area responsibility
- Semi-autonomous units: high coordination across functions
- Adaptability to differences in products, regions, customers
- Incremental innovation
- Support of the C.E.O.’s succession
Weaknesses:
- Costs for department duplication
- No economies of scale as specialization is no longer the source of
competitive advantage. The source of competitive advantage is product
differentiation. People can’t be specialized, they have to share
information between the division.
- Poor coordination across product line, problems with resources
allocation. Divisions are competing to get extra resources.
- The C.E.O. might lose his control as each head of a division may want to
be considered as a C.E.O. of his or her division.

DIVISIONAL STRUCTURE WITH CENTRALIZED FUNCTIONS (5)

In comparison with the pure Divisional Structure the Divisional structure with
centralized functions allows to exploit relevant economies of scale and to reduce
duplication costs as by centralizing some functions, the company hasn’t got the
same functions in all the divisions. Ex. Centralizing operations, marketing or sale.
But, on the other hand, the centralization of functions reduces the Business
accountability and the centralization of functions produces a need for
integration.
Focus on the case APPEX.
In APPEX we don’t have a pure divisional structure but a DIVISIONAL
STRUCTURE WITH CENTRALIZED FUNCTIONS.
Why?
Even though Appex was implemented by Gosh into a Divisional Structure by
establishing two broad divisions: ICS and IS, the C.E.O. also added a third
division: OPERATIONS which included utility functions that serviced the two
businesses.
That’s why this structure is a divisional structure with centralized functions. Each
division had one head who was responsible for the entire division and reported
to Gosh.
Advantages of the divisional structure with centralized functions in the Appex
case:
- Autonomous units where all the capabilities of the organization are
present
- Decentralization, units are more autonomous and have more decision
making as the divisional head has all the information required to take
decisions about a product. The head has a global view over the product
and therefore is able to take more efficient decisions.
- The head has the power to decide about the goals
- Greater responsibility
- Overall business goals
- You don’t have the problem the C.E.O. had of being overloaded, each
head of a division is basically a manager that has an overall view on the
product
- Coordination problems are solved
Disadvantages of the divisional structure with centralized functions in the Appex
case:
- The divisions compete to get the higher budget from the C.E.O.
- Competition for shared resources
- Potential for opportunism, where Gosh is promoting from within the
company
How to avoid opportunism?
Through incentive system to reward collaboration.
 - Every time Gosh gives something to a division, he has to do the same for
the other division, each division has to believe they are on the same
level to compete
- Duplication, triplication of costs, if you provide technological devices to a
division then you have to provide the same for the others
- Competition and conflicts among divisions
- Divisions act as semi-autonomous companies, they are their budget and
their goals. (Negative side of autonomy)
- Each head of divisions is like a C.E.O.
MATRIX STRUCTURE (6)

Characteristics:
- In the Matrix structure there are two differentiated first levels specialized
the ones by strategic business areas (division), the others by techniques
(function).
- The functions are the “sources” of skills while divisions are the profit
centres.
- People (circles in the middle) are “two-boss” managers.
Working condition within a Matrix structure:
Condition 1: Environmental pressure exists for two or more critical outputs
Condition 2: Pressure exists to share scarce resources across product lines
Condition 3: The company is characterized by an high level of managerialization
Ex. Universities use a Matrix Mode. Why ?
Because universities have two sources of revenues:
- Universities fees from students
- Contributes from public policies and from philanthropy
Strength and weaknesses of the Matrix Structure:
Strength:
- Dual answer for dual demands
- Opportunity for both functional and products skill development
- Organizational learning
- Multiple career opportunities
Weakness:
- High managerial complexity
- Dual authority
- Time consuming
- High investment in HR, Information and Control System
 ORGANIZATIONAL CULTURE
Organizational culture is the set of shared values and norms that controls
organizational member’s interactions with each other and with other people
outside the organization. For a firm, organizational culture can be:
- A source of competitive advantage
- Used to increase organizational effectiveness
Organizational culture is based on transmitting this set of values, norms and
standard procedures to employees. In fact, people must be guided by those
cultural elements to act in the right way and to take the right decisions when
faced with uncertainty or ambiguity. Moreover, organizational culture
influences organization member’s behaviour on how to respond to different
situations.
The metaphor used to describe the organizational culture is the iceberg as
there are elements of an organization culture that are visible from the outside,
while there are some others that are hidden and therefore not visible.
HIDDEN PART OF THE ICEBERG: VALUES
The hidden part of the culture are the values. Values are general criteria,
standards or guiding principles that people use to determine which types of
behaviours, events, situations and outcomes are desirable or undesirable
within an organization. Values are usually split in three categories, that go
always more “deeper” in the Iceberg metaphor.

Those categories are:

- Norms: are the standards or style of behaviour that are considered
acceptable or typical for a group of people. Norms are specifically aimed
to set the principles of conduct that the company expects from its
employees.
 - Instrumental values: consists in a defined and desired mode of
behaviour proposed by the firm
- Terminal values: consists in the desired state or outcome that people
want to achieve => the final aim of organizational culture

Ex. From the Slide

• Innovation: what the company desires: terminal value
• Definition of what innovation is, and what innovation is not:
instrumental value
• Behaviours to be introduced in the evaluation form: norms
Ex. Of a value: TRUST
Trust can create an environment of trust that exploits diversity and
collaboration, where people are empowered to make decisions with integrity.
How can a company enforce the culture of innovation? Providing incentives to
employees.
Another example: UPS
This company revealed its values.
Terminal values of UPS: efficiency, economy, and thrift
Instrumental values of UPS: loyalty, humility, discipline, dependability and
intense effort
Norms of UPS: being respectful of working time and standards; being ready to
serve the company even during hard times.
VISIBLE PART OF THE ICEBERG: Rituals and ceremonies, myths/stories and
language and organizational artefacts
Before we saw what organizational culture hides, its values. Now it’s time to
see the super evident part of culture that companies want to be very visible
from the external environment.
How do companies do that?
1. Through rituals and ceremonies
Companies organize, in a repetitive way, ceremonies in order to spread
their culture.
Companies chose between two different kind of rituals/ceremonies:
• Rites of integration: aimed at building and reinforcing common bonds
between organizational members
• Rites of enhancement: aimed at publicly recognizing and rewarding
employee’s contributions
Ex. Nestlé, they are very focused on integration, they are all focused on
celebrating. The business the company is in is concerning with ceremonies,
they have an ethical care in supporting families. The company is so
perceived as ethical and not just business profit driven. Family-based
culture.
2. Through myths, stories and language
Stories, whether fact or fiction, about organizational superstars have the
aim of providing important clues about cultural values and norms as they
reveal the kinds if behaviour that the organization values.
Language, consists in characteristics phrases that frame and describe
events providing important clues about norms and values.
Ex. Carlsberg Motto: “semper ardens”: always burning.
3. Trough organizational artefacts
Includes the company’s buildings, offices, people occupy, company cars etc.
basically, it is about all the physical artefacts that can be seen.
Video: how to be creative? By looking back to our past, childhood.
Ways:
- Environment
- Experiment
- Storytelling: information, context and emotion
HOW IS ORGANIZATIONAL CULTURE TRASMITTED TO ITS MEMBERS?
Organizational culture is transmitted through:
- Socialization: members have the opportunity to learn and internalize
the values and norms of an organization’s culture
In this field, role orientation is the characteristic way in which
newcomers (new employees) respond to a situation: there are two
different kind of role orientation:
• Institutionalized approach: in this case, the communication flows from
one and goes to many people. There is no individual and personal
interaction. An institutionalized approach can be seen in public
presentations or public meetings.
• Individualized approach: in this case a mentor is appointed, usually a
senior within the organization that is entitled to be the one to introduce
new employees to the company. This approach is the mentoring one and
allows an exchange of ideas and knowledge. Therefore, this is a one-to-
one approach.
CASE INCIDENT 1
BOA and MBNA merger case: BOA acquiring MBNA
1. What are the main values of the two companies?
• BOA: thrift, control, effectiveness/scope over efficiency and speed
• MBNA: speed/efficiency, autonomy/entrepreneurship, personal status
2. Would you describe this as a bottom up or top down approach to
change culture?
We are in the middle of the iceberg, executives working with practises.
Practises that are adapted to the merge vs practises that are maintained.
Half Top-down, the workforce didn’t intervene. The people are not
speaking for the company. Half bottom up
3. Why discussing about culture is relevant for M&A?
Not managing in the right way culture integration may lead many
employees to leave the company.
Moreover, culture is a way to differentiate yourself from competitors
and culture is a way to retain people.
CASE INCIDENT 2
Google and P&G (biggest advertiser in the world)
1. Values of the two companies:
• Google: free flowing, understandardized, informal culture
• P & G: control, discipline, rigidity, scalability
2. Strategies to renovate culture: bottom up, the company work together
its people to make new values emerge
Reasons why the company is investing the workforce in the cultural
merge.
3. Why pursuing this goal of cultural “contamination”?
• Short terms business reasons: they can sell their devices to each other
• Long terms business reasons: employees learn how to overlook
important information from their customers/suppliers (ex. Coupon
effectiveness and value of corporate identity and history in
communication strategies)
GLOBAL VALUES vs NORMS
It’s important to underline that a country’s culture can affect both the values
and the norms of a company’s organizational culture.
A country’s culture also influences behaviours within an organization: it
influences communication style, attitude towards competing tasks and
different approaches in decision making.
HOFSTEDE’S STUDY
Professor Hofstede conducted one of the most important studies on how
values on the workplace are influenced by culture. In particular, his studies
focus on how the national culture influences several aspects and behaviours
within an organization. Hofstede’s model consists of several dimensions that
are:
1. RISK ADVERSION: indicates to what extents a culture programs its
members to feel either uncomfortable or comfortable in unstructured
situations. Unstructured situations are unknown and surprising and
different from usual.
2. POWER DISTANCE: is the extent to which the less powerful members of
organization and institutions accept and expect that power is distributed
unequally
 3. INDIVIDUALISM vs COLLECTIVISM: Individualism is the one side
conception of working and achieving goals vs collectivism that is the
degree to which individuals are integrated into teams and work together
to reach the same goal
4. MASCULINITY vs FEMININTY: Masculine cultures’ values are
competition, assertiveness, ambition and power, whereas feminine
cultures confers more value on relationships and quality of life
5. LONG TERM vs SHORT TERM ORIENTATION
Long term-oriented societies attach more importance to the future.
Their values are pragmatic and oriented towards persistence, saving and
capacity for adaptation. The focus of the company is into the future,
future development of the organization.
While in short term-oriented societies, values promoted are related to
the past and the present, and they include a great respect for tradition.
Short term-orientation is typical in the Italian culture.
SOURCES OF ORGANIZATIONAL CULTURE: where does organizational culture
come from?
The first source of organizational culture are property rights. Property rights
are the rights that an organization gives to members to receive and use
organizational resources. The distribution of property rights to different
stakeholders determines both how an organization is effective and how the
culture emerges in the organization.
Common property rights are given both to Managers and to the Workforce
Manager’s rights:
- Golden parachutes: liquidation, what is given to a Manager if he gets
fired
- Stock options: company shares the capital among managerial population
- Large salaries
- Control over organizational resources
- Decision making
Workforce’s rights:
- Notification of layoffs
- Severance payments
- Lifetime employment
 - Long-term employment
- Pension and benefits
- Employee stock ownership plans
- Participation in decision making
The second source of organizational culture is the organizational structure.
It’s clear how in a mechanistic structure there’s a preference for predictability
and stability, that are fundamental principles to reach the organization’s goals.
In a mechanistic structure, often a centralized one, employees are maintained
under obedience and accountability.
While, in an organic structure, innovation and flexibility are the desired values
to pursue. In an organic structure, often decentralized, the company
encourages the creativity and the innovation that can also come from its
people.
To conclude: is it possible to manage organizational culture and how?
As organizational culture is fundamental within an organization, as it is both a
source of competitive advantage and can increase the organizational
effectiveness of a company, the culture can be changed in order to make it
more suitable for the goals the company wants to achieve.
Organizational culture can be changed trough:
- A redesign in the structure, as organizational structure is the second
source of organizational culture
- A revision of property rights used to motivate people, as property rights
are the first source of organizational change
- Changing the people
 ORGANIZATIONAL CHANGE
Organizational change is the process by which organizations move from their
present state to some desired future state to increase their effectiveness.
Organizational change aims at improving effectiveness at different levels:
- Organizational design level: organizations can change their structure, to
improve their effectiveness
- Human resources/people level: by changing hiring processes, investing
in training, socializing employees, monitoring promotion and rewarding
systems, diversity management can all be changed/introduced to create
value
- Organizational culture level: values, norms, artefacts, practises,
storytelling can be changed
ORGANIZATIONAL CAPABILITIES: organizational design (structure) + HR +
culture
More in general, the combination of organizational design, HR and culture is
often referred as organizational capabilities. Organizational capabilities are
the abilities that are responsible for changing the relationships among people,
organization and culture. If organizational capabilities are developed in the
right way, they increase the organization’s ability to create value.
Organizational capabilities are not easily imitable because of:
• Casual ambiguity: competitors cannot distinguish anymore what to
implement first and with what effect, it’s not possible to copy those
organizational capabilities because they’re so well integrated that
competitors don’t understand what to implement first: the structure, HR
or culture.
• Path dependence: along time, these reciprocal relationships among
structure, culture and HR reinforce each other.
Ex. Zappos has got a circular structure, organic model, but the workforce was
complaining. Therefore, the company changed into an even more democratic
structure through a “holocracy” structure.
FORCES that PUSHES for ORGANIZATIONAL CHANGE
1. Competitive forces: an organization may start a change in order to face
competitors by matching with them or even exceeding them at least in
one of the following dimensions:
• Efficiency
• Quality
• Innovation
2. Economic, political and global forces: affect organizations by forcing
them to change how and where they produce goods and services.
Ex. Nowadays, Trump’s trade war has caused tensions in global
commerce also by affecting the European economy. Indeed, the
president’s tariffs have at first raised the costs of materials like steel and
they also have diverted trade worldwide by disrupting supply chains that
businesses were relying on.
3. Demographic and social forces: changes in the composition of the
workforce and the increasing diversity of employees for organizations
may lead a company to start an organizational change.
4. Ethical forces: government, political and social demands for responsible
corporate behaviour may cause:
- The creation of ethics officer position
- Employees’ report of unethical behaviours
DIFFERENT TYPES OF CHANGE IN ORGANIZATIONS: evolutionary change vs
revolutionary change
Evolutionary change: in this case the change is gradual, incremental and
narrowly focused. The change comes from the workforce, as an initiative form
the people. So, evolutionary change is a down-top processes as it doesn’t come
from managers but from people.
Evolutionary change is developed through TQM (totally quality management)
which consists in an ongoing and constant effort by the entire organization to
find new ways of improving the quality of the organization’s goods and
services. An example are quality circles that are groups of workers who meet
regularly to discuss the way work is performed in order to find new way of
increasing performances.
The second development through which an organization evolutionary evolves
is the concept of flexible workers: when we talk about flexible workers
employees have acquired and developed the skills to perform any of the tasks
necessary for assembling a range of finished goods:
• Compensation frequently tied to the number of different tasks that a
person can perform
• Workers members can substitute for one another
• Team members jointly assign tasks and transfer workers from one task
to another
• Manger’s role is to facilitate the team’s activities
Ex. Toyota, new Taylorism, is applying new meeting strategies, there are no
chairs, everyone stands up.
The use of flexible workers is used, for example, in the assemblymen of cars.
Revolutionary change: in this second case the change is sudden, drastic and
broadly focused. This second process leads to re-engineering and innovation
within the organization.
In revolutionary change managers redesign how tasks are translated into roles
and units in order to improve organizational effectiveness. As the managers
are the ones running the revolutionary change, this process is a top-down
process, there’s no active role of the employees in the change.
The managers of a reengineered organization focus on business processes that
is an activity that cuts across functional boundaries and is vital to the quick
delivery of goods and services or that promotes high quality or low costs.
Organizations that take up reengineering deliberately ignore the existing
arrangement of tasks, roles and work activities: SUDDEN and DRASTIC CHANGE
Guidelines for performing reengineering successfully include:
- Organize around outcomes, not tasks
- Have those who use the output of the process perform the process
- Decentralize decision making to the point where the decision is made
ORGANIZATIONAL DEVELOPMENT:
Organizational development (OD) includes a series of techniques and methods
that managers can use in their change program to increase the adaptability of
their organization. Those techniques are:
- Counselling: aimed at helping people understand how their perception
of the situation may not be right
- Sensitivity training: intense counselling in which group members, aided
by a facilitator, learn how to deal more sensitively with others
- Process consultation: a trained consultant works closely with a manager
on the job to help the manager to improve his or her interactions with
other groups members
- Team building: is an OD technique in which a facilitator first observes
the interactions of group members and then helps them become aware
of ways to improve their work interaction
- Intergroup training: uses team building to improve the joint activities of
different functions or divisions
 - Organizational mirroring: a facilitator helps two interdependent groups
to explore their perceptions of each other and their relations in order to
improve their work interactions
- Total organizational interventions: organizational confrontation
meeting has the aim of bringing together all of the managers of an
organization to meet and to confront the issue of whether the
organization is effectively meeting its goals.
CASE STUDY: HOVEY and BEARD
The company manufactures a variety of wooden toys.
In the first six months they have a bonus which expires one you externally
show you have learnt (6 months is the expected time). It is a centralized
structure at the beginning and then decentralized. ?? Control is a value.
At the end they decide to abolish what they proposed since they didn’t trust
the workers. ??
They changed the structure since they didn’t trust workers since they decided
for themselves their salary.
The workers were complaining about environmental condition (temperature
was too hot to work since they worked close to a hoven). They also want to set
their schedule. They want to contribute in order to get extra money. They
force the workers to go back to the way they were working. The change
process caused a resistance. Managers are scared about spending too much
money if they would spread the change it all over the organization.
 PERSONALITY
Studying personality is extremely relevant in the selection process as well as
for team composition strategies and for the re-examination for the promotion
dynamics.
Personality is defined as an individual’s relatively stable characteristic patterns
of thought, emotion and behaviour. Moreover, it involves all the psychological
mechanisms that support and drive those patterns.
Personality development is influenced by:
- Nature: concerns our genetic background, our genetic heritage
- Nurture: concerns environmental and situational aspects like family,
culture and geographical location
In order to better analyse personality traits we can adopt several trait models
and theories about personality.
The first one is The Big 5 Model also referred as the Five-Factor Model. This
model defines the “OCEAN” dimension that are:
- Openness to experience: an individual that is open to new experiences is
always seeking for new and varied experiences and is aware of his
thoughts, feelings and impulses
- Conscientiousness: an individual that is conscientious is dependable and
trustworthy and in conformity with social norms
- Extroversion: an extrovert is outgoing, sociable and assertive
- Agreeableness: an agreeable individual is likeable, considerate and
cooperative
- Neuroticism (or emotional stability): a neurotic individual is usually
worried, insecure, self-pity, with a poor self-image of himself/herself and
with frequent mood swings.
The second model used to analyse personality traits are the MBTI indicators
that define four dimensions of type.
- Extraversion vs introversion: the main difference between an extrovert
and an introvert lies in where the attention of the individual is focused
and from where they get their energy from.
An extrovert is focused on the external environment and the others, he
is sociable, with several interests, learns through interaction and
discussion and prefers verbal communication.
 On the opposite, an introvert is focused on internal orientation towards
ideas and experiences. An introvert is reserved and calm, with few but
deep interests, learns through reflection and prefers written
communication.
- Sensing vs intuiting: the main difference between a sensing and an
intuiting individual lies in the different techniques they use to gather
information.
A sensing individual is pragmatic and collects information through a
systematic method. He/she has got a preference for already possessed
skills and has got preference for structured contexts.
An intuiting individual is oriented towards new challenges and is not
comfortable with routines. He/she follows the instinct to solve problems
quickly and has got preference for skills acquisition.
- Thinking vs feeling: the main difference between a thinking and a feeling
individual lies in the different way they take decisions.
A thinking individual uses his/her logic reasoning to take decision.
He/she adopts an impersonal perspective using an analytic method.
He/she always looks at the connection between causes and
consequences and searches for objective truth.
A feeling individual before taking a decision, analyses the overall value.
He/she focuses on the harmony and individual well-being. The feeling
individual considers the impact that the decision will have on people and
his/her decision is lead by personal values.
- Judging vs perceiving: the main difference between a judging and a
perceiving lies in the different action orientation.
A judging individual prefers to live in an organized way through constant
planning of his/her actions. The judging individual prefers certainty and
is not comfortable with last minute changes.
While, a perceiving individual prefers to live in a flexible. He/she acts
through spontaneity and flexibility and is very comfortable with last
minute changes.
Apart from those two theories (The Big 5 Model and the MBTI indicators) that
defines the most common personality traits, there are actually some other
personality traits that are important to analyse:
ð Self-esteem: that is the degree of regard people have for themselves
It can be high or low
 ð Machiavellianism: actions characterised by manipulation and emotional
distance. Motto: “The end justifies the means”
ð Locus of control:
Inner-oriented: an individual reports his/her achievement and failure to
himself/herself
Outer-oriented: an individual reports his/her achievement and failure to
external elements such as luck or fate
INTERACTIONIST MODELS/THEORIES:
The behaviour is determined by:
- Individual’s nature and personality and
- Situational factors that influence their responses
THE CONDITIONAL REASONING APPROACH:
Is a contingency model that assumes that individuals interpret what happens in
their social environment differently based on their individual dispositions.
 MOTIVATION
Motivation refers to the psychological forces that determine the direction of
people’s behaviour, their level of effort, and level of persistence.
To analyse problems related to motivation, it is important to go back to the
root cause of those problems that are:
- Person
- Leadership
- Job design
- Organization
[Link]
For the motivation of a person it is useful, first of all, to analyse the traditional
pyramid of needs described by Maslow.
Maslow’s Pyramid, elaborated in 1943, has the aim to differentiate and analyse
needs by ordering them from basic survival needs to more complex social needs.
Self-actualization: the need to fulfil your potential
Self-esteem
Social belonging
Security: also related to the security of the working environment
Physiological needs
Maslow’s pyramid has got an important relevance also in managerial terms,
especially for managerial practises.
Herzberg modified the traditional Pyramid of needs proposing his own model:
Herzberg’s Model.
The basic principle is that if an employee’s needs are satisfied then he/she will
be more productive at his/her workplace. Herzberg summed the 5 Maslow’s
factors in two categories:
- Hygiene factors: very basic needs, taken for granted
Reflect the needs that Maslow put at the bottom of the pyramid, mainly
physiological needs.
Ex. Clean rooms and equipment, when they are not like this they can
cause a deep sense of dissatisfaction
 - Motivators: (HR incentives): are aimed at giving employees extra energy
and motivation.
Reflect the needs that Maslow put at the top of the pyramid like self-
esteem and self-actualization.
Herzberg’s motivators are:
• The work itself
• Achievement
• Challenge
• Responsibility
• Advancement
• Growth
• Recognition
The relation between Herzberg’s hygiene factors and motivators is that
hygiene factors are at the base and without them motivators cannot even be
contemplated.
McClelland’s Theory of Needs
McClelland’s Theory of Needs is aimed at understanding what drivers the
members of a team. McClelland identified three motivators that he believed
any individual has, need for achievement, need for affiliation and need for
power. He added that, one of these motivators is prevalent among the others
and is responsible for driving and motivating us.
- Achievement: is the need to accomplish goals, excel and strive
continually to do things better
An individual with a high need for achievement wants to be personally
responsible for their success of failure, prefers situations of moderate
risk and likes to receive immediate feedback.
- Power: is the need to influence and lead others to be in control of one’s
environment.
An individual with a high need for power is competitive and aggressive
and is interested in prestige and possessions. Prefers action situations
and belongs to various groups and tends to be officers in those groups.
He/she is preoccupied with his/her reputation, influence and impact.
- Affiliation: is the desire for friendly and close interpersonal relationships
Concerning affiliation, there are two faces of it:
 • The Affiliative Interest that is a concern for interpersonal relationships,
but not at the expense of goal-oriented behaviour
• The Affiliative Assurance that is a concern with obtaining assurance
about the security and strength of one’s relationships and with avoiding
rejection
[Link] Design
In order to improve motivation it is important to design motivating jobs
trough:
- Skill variety: requires a range of personal competencies and abilities
- Task identity: requires completion of a “whole” and identifiable piece of
work
- Task significance: employees perceive job as having a substantial impact
on other’s lives
- Autonomy: employees have freedom, independence and discretion to
plan and carry out their task
- Job feedback: employees receive direct and clear information about
their performance
METHODS OF JOB REDESIGN:
- Job rotation: change the content of the employee’s job but doesn’t
change his/her hierarchical level.
Divisional structure allows Job rotation, Rotating between
ð Different divisions = different products: the employee keeps his job, just
changes the product: Ex. marketing for shoes and then marketing for
clothes.
ð The same division changing his/her job.
The divisional structure allows Job Rotation as the level of specialization
is less than the one in the functional one (doesn’t allow job rotation).
Also the Matrix Structure allows Job Rotation.
It’s a way of providing extra training, but as the employee doesn’t
change his hierarchical position he doesn’t get more money, the
contract doesn’t change.
- Job enlargement: the employee is responsible for a and b. As the boss
wants to motivate the employee he gives him the responsibility also for
c, giving him the opportunity to perform a little bit more out of his usual
circle. Motivation comes from an extra performance. The employee
 doesn’t change his/her activity, he/she is just able to see a little bit more
of the company’s activities. This enlargement is a horizontal one, is not
about having more power but on enlarging the employee’s
responsibility.
- Job enrichment: The employee’s job is getting larger, he/she also gets A
and B, therefore he/she also gets a leadership position. He/she gets to
control people.
- Self-managed work teams: within circular structures, there’s no leader,
people are compensated according to the number of competencies they
have. There are no really defined or specialized role as employees can
substitute each other.
[Link]
REINFORCEMENT THEORY:
Has the aim to:
• Reinforce desirable behaviour trough rewards or removal of undesirable
consequences and
• To extinguish undesirable behaviour trough punishment or ignoring.
Reinforcement principle: skinner pigeon video represents the reinforcement
principle: reward causes the repetition of the positive behaviour. If you reward
an employee for having done something good along the year, he will do the
same the next year. This learning is about the behaviour the employees should
have.
It works in the same way for punishments. Every time you get a performance
review, the company tells you which is the correct behaviour to follow.
In the following schema:
Red and black represent two different leaderships:
Red gives you feedback, black doesn’t. A worker does a good job, positive
reinforcement, probably the employee will do the same the next year. Typical
of extroverted bosses.
In companies that are project-based the problem of sustain motivation is that
one positive behaviour for a project may not be the right one to use in the next
project.
GOAL SETTING THEORY
The goal-setting theory sets which is the most suitable goal difficulty in order
to get the excellent level of motivation and therefore of performance.
• Setting specific goals increases motivation and performances
• Difficult goals accepted by employees result in higher motivation and
performance, Participation is important because it enhances belonging.
• Feedback causes higher performance than non-feedback
• People are more committed to goals they set themselves and make
public
Ex. If the goal difficulty is too easy, the employee doesn’t put that much effort
in what he/she is doing. At the same time is the goal difficulty is too difficult,
the employee doesn’t get that much effort, he/she is too stressed and he/she
doesn’t know how to direct his/her energies correctly.
EQUITY THEORY: distributive justice

Working on the principle of fairness: equity theory. Based on how much the
justice is distributed among the employees.
The judgment of equity is not just based on rewards but also on the effort that
you put. Reward you get proportional to the effort made.
The judgment of fairness is based on a belief of your effort that should provoke
a specific result. The judgment of equity is most of all based on the comparison
about how a colleague performed and how much reward he got.
An employee compares his rewards to the one another employee is getting.
EQUITY THEORY: procedural justice
It concerns with how the organization communicates and takes decisions on
people’s working lives.
Ex. Decisions on salary increases or promotions, even if fair according to
distributive justice, may be perceived as unfair because they are badly
managed and communicated.
What is the basis of procedural justice?
- Control over process: it is necessary to give workers the opportunity to
discuss their position before decisions are taken (before evaluation
sessions)
- Decision-making control: you must give workers the opportunity to
influence decision-making, giving them the opportunity to appeal
- Relational justice: decisions must be explained and people must be
treated with dignity
Conformism: following the main opinion without arguing, instead of expressing
your own opinion, Asch experiment, the correct answer is 2
Adecco example, this company provides HR services to other companies.
- Creating an evaluation tool based on a shared and defined skills and
competencies model
- Making an objective review through behavioural observation
- Facilitating feedback and share the final evaluation
- Working on a development and training shared action plan based on
Employee’s weakness
The company gives the employees the possibility to intervene and comment on
their evaluation. The use training as a way of bringing the weaker employees
to the same level as the others. Strong belonging practice.
Adecco’s values:
1. Cool head
2. Warm heart
3. Working hands
4. Curios mind
Adecco’s performances: the competency model: 8 key competencies for all + 3
additional competencies for managers
Performance review ratings:
Objectives and competencies
At the end of each year, the company, classifies any employee referring to a
table. It has got a matrix structure. Red area= identifies people at risk, negative
evaluation
Ex. A1: best performer in terms of competencies and objectives, this guy is a
good candidate for a promotion, up to get a financial incentive, conquer very
sophisticate training to improve his abilities, ready for a new promotion.
It associated to a certain performance, a certain reward.
Ex. D4, in the 90s the used the force distribution in order to constraint
companies to have employees split all over the table.
 TEAM MANAGEMENT
A good team management confers a good team effectiveness. The
components of Team Effectiveness are:
- Output: quantity, quality and timeliness of the productive output of the
team
- Social processes: capability of members to work interdependently
- Learning: knowledge and well-being of members
The manager has got a huge responsibility in creating effective work teams
through:
- Correct use of teams to make decisions
- Managing the team context
- Managing the team members
- Managing the team task and process
[Link] use of teams to make decisions:
Based on:
• Task characteristics:
- Complex
- Large
- Requires inputs from multiple sources
- Uncertain
• Members characteristics:
- Task and interaction skills
- Motivated and willing to work on the task
- Trusted to work towards organizational goals
• Team characteristics:
- Resources to complete task
- Responsibility and authority to complete the task
[Link] the team context: both outside and inside the team
- Secure resources
- Manage team’s reputation
- Coordinate with other organizational units
- Defining the role within the team:
=> Ambassador: manages upward relationships, market the team and lobbies
for resources. The ambassador is the team leader.
=> Scout: gathers information, manages later and downward information
searches
=> Task coordinator: manages interdependencies with other units, coordinates
deadlines and obtains feedback on how the team is doing. The task
coordinator performs the activity of supervisor.
[Link] Team Members
There are three main factors that need to be managed:
- Member skills
- Member motivation
- Member composition and diversity
Focus on Member motivation: how to motivate team members?
- Minimizing social loafing, conformism and groupthink (possible
pathologies that can come from a wrong management of team work)
Social loafing: is the tendency for individuals to exert less effort when
they work in a group
Conformism: is the tendency for individuals to conform to the opinion of
the others.
Ex. Asch Experiment: Asch conducted an experiment to investigate the
extent to which social pressure from a majority group could affect a
person to conform.
- Establishing the proper level and type of rewards
Balance team and individual rewards:
• Using individual rewards when the task requires individual contribution
• Using team rewards when a group output is needed
[Link] the Team Process and Task
There are two factors that need to be managed:
- Stages of group development
- Task and interaction requirements of each stage
Stages of group development: Tuckman’s Model of Group Development

Those four stages: forming, storming, norming and performing are all
necessary and inevitable in order for the team
- To grow
- To face up to challenges
- To tackle problems
- To find solutions
- To plan work
- To deliver results
FORMING: transition from individual to member status. The members get
together but they are still not a team. You appoint the product managers, but
they still don’t know exactly their tasks as well as the organization. The team
members try to figure out what is the real goal the company has assigned to
them, their feeling is still not that positive, they feel fear as they are beginning
something new.
STORMING:
This is a stage of conflict, people are in conflict. Need for the people to
establish a confrontation. People are arguing about everything, about the role
they’ll have in the company, who will be the leader, who the ambassador etc.
through the conflict people are able to get to know not just the others but also
themselves. Team members are impatient about progress and they rely solely
on themselves.
Storming phase is affected by conformism.
The inability to perform a storming phase is referred as the Abilene paradox.

NORMING:
During the norming stage the team begins to come together, and the different
roles emerge. People get together, they set rules and ways to operate. They
are almost ready to work as a team. The feelings are positive, sense of
belonginess. Reciprocal acceptance, they refer to the team, rather than on
their own contribution.
NB: between the norming and the performing stage the pathology that affects
the team is groupthink.
PERFORMING:
In this last stage the team has settled its relationships, and everyone knows
their role. There is finally a team that is working. Deliver the output of the
team. Positive social patterns, open to solve the organizational problems. The
team is also creating change, the feelings are really positive.

Managerial practises per phase:

Benefits and liabilities of Teams:
 DECISION MAKING
Elements of the decision-making process:
- The kind of problem to face (simple/complex/unexplored)
- The preferences and goals of individuals, so what’s the aim to achieve
- The information that individuals have and can pick up by identifying all
the alternatives and their consequences
- The resource constraints defined by the organization like time and
financial resources
Each phase of decision making can have some distortions that affect the
decision itself.
[Link] identification => Framing
[Link] selection and definition of possible options => Anchoring,
Status quo and Self-Confirmation
[Link] and results evaluation => Sunk costs and Overconfidence
First phase: Problem identification is affected by Framing
The word framing suggests the main implication of this distortion: when we get
an opinion in order to solve a problem it is difficult to change our view. Once
the prospective has been built it’s very difficult to get out from it. Once you see
one thing you need to be pushed to see the other one.
The physical appearance can unfortunately influence the first impression a
person has.
Ex. A woman entered with shopping bags, very bad first impression due to her
appearance. Because of the framing effect, during the selection process, the
opinion of her didn’t change.
Ex. The power of a frame: the students of the Economics 70 course at MIT had
a substitute instructor they have never met before, because their professor
was out of town. Before meeting the mysterious guy, the students received a
brief bio describing him, what they didn’t know was that there were actually
two different bios being handed out. The first one was describing the sub as
“very warm” while the second one as “rather cold”. Even though the sub was
the same one, in the questionnaire given to the students about him it seemed
that students were responding about two completely different instructors. The
one that in the Bio was described as “warm” loved the sub, while the one that
was described as “rather cold” was very unpopular among the students.
What’s the conclusion from this experiment? In the moment in which the
students read the bio, their opinions of the sub were already set! Therefore, a
single word has the power to alter out whole perception of another person
and possibly sour the relationship before it even begins.
Dan Ariely experiment: are we in control of our decisions?
To sum up: the frame trap represents the challenge of the first and most
critical aspect of the decision-making process: to identify the problem. The
framing trap refers to the perspective through which we look at a certain
problem and the difficulty to see the same problem from a different angle.
How is it possible to overcome the Frame trap?
- By not automatically accepting the initial frame
- By trying to pose problems in a neutral way
- By embracing both a gain and losses perspective to the problem
- By challenging the others when they present you a problem
Second phase: Information selection and definition of possible options is
affected by Anchoring, Status quo and Self-confirmation
Anchoring: when a chart provides you with an information, this influences your
final answer. Ex. Turkey, on the chart it is written that there are 35 million
people, many people are influenced by this number.
This also works for marks in exams: a professor may be influenced by the
previous mark. That’s very common in management, looking at the past year
performances to adjust the new ones.
The anchoring trap: when considering a decision, the mind gives
disproportionate weight to the first information it receives. So, initial
impression, estimates or data anchor subsequent thought and judgments.
How it is possible to overcome the Anchoring trap?
- By viewing a problem from a different perspective, using a different
starting point avoiding the anchor
- By being open minded
- By being careful to avoid anchoring your advisors by telling them as little
as possible and by asking for their opinion
 - By being particularly aware of anchors in negotiations
Status quo: occurs when the individual wants to stay in his/her comfort zone,
and you don’t want any other information to come to him/her. Willingness to
perpetuate his/her current situation.
Ex. Status quo trap: Inattentional blindness: task: count the passes
Counting the passes, you forget to see the black gorilla. You are so focus
counting them, that you don’t see it. This distortion in this case is not
dangerous, the task was to focus on the status quo. But in other cases, while
you are staying in your status quo and carrying your task on, you may not be
able to spot what is around you. This means that if you keep your status quo
you may skip some pieces of information that may be relevant.
Indeed, this experiment shows:
- That we are missing a lot of what goes around us
- That we have no idea that we are missing so much
This happens in the economic environment: a company is so focused on its
work that doesn’t look at what competitors are doing, this can reduce their
competitive advantage.
Detroit FP: they were open to change their usual way of delivering their
services to consumers. They called consultants to have new ideas and
perspective. They were willing to go out their comfort zone. Through a
scanning of the environment they were able to deliver new offerings and to
expand their web presence.
How to overcome the status quo trap?
- Reminding yourself of your objectives and examining how they would be
served by the status quo
- Identifying other options, not assuming there aren’t any
- Asking yourself if you would choose the status quo alternative if it was
not the status quo
- Avoiding exaggerating switching costs
- Evaluating alternatives in terms of future as well as present context
Challenging the status quo through the application of the 5why’s.
This procedure is very commonly used in standardized jobs. Going at the very
roof of the problem. This procedure has been applying to Jefferson Memorial
in order to get back to the origin of the problem. The monument was
crumbling down because of the washing. First solution: reducing the washing.
Step back to the origin of the need of washing: birds. Step back: origin of birds,
food chain. Step back: insects, it was the lightning the root problem, reducing
it, solving the problem. Application of the 5why’s method, going back to the
root of the problem. In managerial environment, applying this method is
fundamental to have a global view of the problem.
Self-confirmation:
Leads us to seek out information that supports our existing instincts or point of
view while avoiding information that contradicts it. This not only affects where
we go to look for evidence, but also how we interpret the information that we
receive.
How to overcome the self-confirmation trap?
- By confirming that you are examining all the evidence with equal rigor
- By finding someone you respect to play the devil’s advocate
- By being honest with yourself about your motives
- By not asking leading question that invite to confirm your opinion
Ex. Columbia Final Mission: foam strikes were considered as a maintenance
issue rather than safety issues for flight
Third phase: Choice and result evaluation affected by Sunk cost and
Overconfidence
The “Sunk-Cost Trap”, that talks about our deep-seated biases to make choices
in a way that justifies past choices, even when the past choices no longer seem
valid. These past decisions often involve considering sunk costs in assessing the
viability of a project – old investments of time or money that are no longer
recoverable. One might also call this “throwing good money after bad”. This
trap is also related to the development of an overconfidence in achieving the
results, ignoring the evidences for potential failures.
How to overcome the sunk cost and the overconfidence trap?
•Always be mindful of long-term objectives and examine how they would be
served by the status quo, if at all
•While considering other options, evaluate the status-quo alternative if it was
just another option, rather than the front-runner
•Avoid exaggerating switching costs
•And finally, always evaluate alternatives in terms of future as well as present
context
Example: Everest disaster (1996) The “two clock rules”
How unearth defect in thinking?
To help executives vet decisions, Kahneman, Lovallo and Sibony have
developed a tool, based on 12 question-ckecklist, that is intended to unearth
defects in thinking. The question are about 3 categories:
[Link] the decision makers should ask themselves
2. Questions they should use to challenge the people proposing a course of
actions
[Link] aimed at evaluating the proposal
DECISION MAKING MODELS
- The rational (or normative) models
- The heuristic model
- The garbage can model
- The cybernetic model
[Link] rational/normative model
Stages of rational decision-making process and their features:
– Identification of the problem (correct: you are able to promptly define the
goal and its characteristics)
– Goals (clearly identified)
– Searching for alternative solutions (the options to be pursued are "finished",
known, or at least knowable)
– Evaluation of the effects of these alternatives (the individual is able to give
value to the consequences of his actions)
FOCUS ON: choosing the best alternative and implementation: you are able to
make the best choice and pursue it
When can this model be applied effectively, efficiently and fairly?
– Highly structured problems
– Lack of constraints from the organization (you have the resources to look for
alternatives and evaluate them properly)
– The individual knows alternatives, consequences and preferences
Which are the risks of this model?
• Research costs
• Computational complexity
• Cognitive complexity
[Link] heuristic model
The basic difference from the rational-normative model are related to:
- The type of problem: less structured and more complex and rich
- Type of alternatives: numerous and not known
- The individual is not able to evaluate all the consequences and links
them to the solutions
- Presence of constraints in terms of costs and resources
FOCUS ON: not on the best choice, but on the satisfactorily one.
[Link] Garbage Can
The metaphor of “rubbish bin” gives the insight of this decision-making model:
The size of the decision-making process (problems, alternatives, preferences,
choices, etc..) are all mixed together, and you cannot give them a sequential
pattern.
Examples from organization that are very good at reacting at unpredictable
events. Application of the so-called “Bricolage Behaviour”, making the most of
what you have in the bin to solve the problem.
When to apply the Garbage Can model?
– Several participants with different preferences (their engagement depends
on their own needs and goals)
– Problems to be solved are perceived vaguely and differently by the single
decision maker
– Organization, timing and goals of the decision are unclear and rapidly
changing
– No much time and few resources
FOCUS ON: choosing in an emerging way, trying to integrate the available
elements at that moment but without following optimization criteria or long-
term ones.
[Link] cybernetic model
It is used when:
– The problem is stable or at least is repeated in its general features
– There is a list of actions and practices which the individual can use
FOCUS ON: choosing the successful alternative in such situations and it
changes in a “incremental” way. It is a mode of choice un-evaluative.
 DIVERSITY MANAGEMENT:
- It’s a set of practices that evolved over time because competitive forces,
political ones, demographic forces
- Strategy to attract and to retain diverse people (background, gender,
ethnicity …)
- Based on a HR strategy, starts from selection and goes on with training.
First preliminary step: equal opportunities
The strategy is aimed at allowing each individual to give her best not
assuming any preferences among employees (listen and have feedbacks
from them) and giving them the opportunity to express their true self.
What diversity management is not:
- Single practice using isolation, to pursue “partial” goals
Equal opportunities:
- Avoiding discrimination towards minorities
- Assuring minorities have the same rights of traditional employees
Diversity management is important because it affects individual and
organizational performance as:
- It enhances relationships
- It enhances employee relations and reduced labour costs
- It improves workforce quality and performance in terms of diverse skills,
creativity, problem solving and flexibility
How does it work in the daily dynamics?
- Weaker psychological barriers for “minorities” to participate
- Wider pools of resources to draw from to build teams (more effective
decision making and listening to unedited perspectives)
- Opportunity to fulfil one’s own potential and performance expectations
Why is it problematic? Because of:
- Protective reactions from majorities, who feel threatened, ending up in
stronger barriers
- Someone says there are no particular idiosyncrasies tied to a category,
and so it is not taken for granted that a wider participation is
synonymous of better decision making
 - Focusing on individual potential and results might distract from the
potential of the collectively
DEFINITIONS OF THE EQUAL OPPORTUNITIES APPROACH
• Goal: preventing discrimination with respect to minorities in order to get
them treated as the traditional employee
• Origins: moral and ethical, based on social justice issues. the company wants
to restore the sense of justice that the society was not able to create. The
company wants to be recognized as a social player.
• Example of practices: stress the importance of job-related criteria in selection
process, in order to avoid irrelevant information which could lead to a
distorted consideration of the candidates; quotas; extra training
• It focuses on individuals rather than groups
– Each employee is valued
– Opportunities are not provided on perceived group membership basis
• Difference is an asset to be harnessed (not something to minimize)
• The origins are the economic value and the business case for diversity rather
than just social justice
• It implies a shared responsibility between HR and line managers
• It focused on culture, practices, behaviours, rather than just ‘quotas
Problems with equal opportunities:
• It is not taken for granted that proving employees with fair chances to
develop themselves they will end up with a fair outcome
• It is not so likely to change the culture through the promotion of minorities
• Not all the minorities are protected
• It creates division
• Celebrating and valuing individual differences vs developing the capacity of
all
• The business case could distract from the existence of disadvantage groups
• The business case could lead the company to focus only on certain
employees
• The mission for line managers is not always clear
The line manager role:
• Managers need to learn to challenge any assumptions they make about each
individual employee:
– Who is more interested in geographical mobility, a married woman with two
children, a man in his 70s or someone else?
• They are in charge of spreading a diversity culture and making it
understandable
• They are in charge of avoiding resentments, when managing people, having
in mind their diversity
MOTIVATIONAL LEVERAGE
(+) CSR: cover social responsibilities
(+) JUSTICE
This works on the input but not on the output.
(-) the company may end up with celebrating only the minority
 LEADERSHIP
WHO IS A LEADER?
A leader is an individual who establishes directions for a group, who gains the
group’s members commitment and who motivate them to achieve goals to
move in that direction.
Power centralization: whether the power is focused on the group or on the
leader

Behaviour styles in Leadership:

h-dx: task uncertainty, need to keep motivation
b-sx: very predictable tasks, which do not ask a strong people collaboration or
self-management team
DIFFERENT KIND OF LEADERSHIP:
Transformational leadership:
ð Are value-driven change agents: the leader is not tied to a politics of
rewards and punishments to motivate people
ð Make followers more conscious of the importance and value of task
outcomes
ð Provide followers with a vision
ð Motivate followers to go beyond self-interest for the good of the
organization
Transactional leadership:
Transactional leadership is an exchange process in which leaders clarify
employee roles and task requirements and then reward or punish followers
based on their performance.
Transactional leadership in an evaluation form:
(a)Contingent Reward (10 items)—provides rewards if subordinates perform or
expend the necessary effort in accordance with agreements and requirements
(b)Active Management-by-Exception (5 items)—maintains a vigilance for
mistakes or deviations and takes action if targets are not met
(c)Passive Management-by-Exception (6 items)— preserves the status quo and
does not consider trying to make improvements as long as things are going along
all right or according to earlier plans
Shared/distributed Leadership
At different points in time, leadership is rotated. The person with the most
relevant skill takes the initiative to influence the group.
Shared leadership in an evaluation form:
Shared leadership: it can be measured through density, which is a measure of
the total amount of leadership dis played by team members as perceived by
others on a team
• Every team member has to rate each of his/ her peers (1, "not at all," to 5, "to
a very great extent") on the following question: "To what degree does your team
rely on this individual for leadership?“
• + by summing all values (here, the team members' ratings of each other's
leadership) and dividing that sum by the total number of possible relationships
among team members.
Lateral leadership:
Colleagues at same hierarchical level collaborate and facilitate joint problem
solving.
Charismatic Leadership:
Charismatic leaders develop a special relationship with followers who attribute
extraordinary or heroic leadership abilities to them
Charismatic leadership in an evaluation form:
• articulating an innovative strategic vision
• showing sensitivity to member needs
• displaying unconventional behaviour
• taking personal risks
• showing sensitivity to the environment (identifying constraints, threats, and
opportunities).
=>Unethical charismatic Leader:
Motivated by personalized power
Pursue their own vision and goals
Censure critical or opposing views
Encourage blind obedience, dependency, submission
Lack internal moral compass
Servant leaders
Servant leaders are stewards who are responsible for serving, developing, and
transforming the organization and its people.
Other features:
• How the leader is oriented to delegate: “laissez-faire” vs autocratic
leader
Leader centred vs group centred
Leader centred: the leader decides, the autocratic leadership is more
efficient when the tasks are easier, no need of sharing information vs
group centred: more difficult tasks, need to share information