1.

Culture can be illuminating because culture can refer to a wide variety of behaviors,
actions, meanings, and symbols in organizations. Briefly explain the elements of
organizational culture.

Elements of culture can be visible, such as styles of dress, office spaces and language
choices, and they can also be invisible or hidden, such as the organization’s values, ethical
beliefs, and preferences. The more deeply held the belief and more tacit the assumption,
often the more difficult it is to change.

The first elements of organizational culture is language, metaphor, and jargon. This element
is referring to how organizational members speak to one another, using what terms. As an
example, is whether organizational members are referred to as “associates” (some retail
stores), “individual contributors” (some corporate environments), or “cast members” (such as
at Disneyland). Organizational members develop specialized acronyms and terms that often
only they understand.

The second element is communication (pattern and media). Who communicates to whom,
on what topics, using what media. In some large organizations, the higher leaders send e-
mail to all employees, while in others in-person communication is preferred. These choices
can be situation-or topic-dependent as well.

The third element is artifacts. For example, pictures or posters on the wall, lobby décor, or
dress style. Some organizations have explicit rules for who is permitted what size office, with
what furniture style, or even what model of phone or cell phone calling plan is authorized.

The fourth element is stories, myths, and legends. Referring to what stories from the past
resonate with organizational members to recall lessons and learnings from positive or
negative events. An organization that has undergone an especially traumatic event, such as
a bankruptcy, is likely to have a set of stories and assumptions that are repeated to guide
new decisions in order to avoid repeating historical mistakes.

The fifth element is ceremonies, rites, and rituals. These are formal and informal gatherings
or recurring events in which a standard “script” seems to be followed.

The sixth element is values, ethics and moral codes which referring to doing what is “right”
may mean doing it quickly in one organization or doing an exhaustive study of all possible
options in another organization. Organizations have espoused values, those that they
explicitly articulate, and hidden underlying values, those that guide decision making but
about which organizational members are usually less conscious.

The last element is decision-making style, which including what information is needed before
a decision is made, who is consulted, whether opinions are freely offered, who makes the
final decision, and how it is communicated.

2. Briefly explain five components of an organization’s design depicted in Figure 12.2.

The five components of an organization’s design are strategy, structure, processes and
lateral capability, reward systems and people practices. Firstly, strategy. It is referring to the
organization’s direction and long-term vision. Secondly, structure. It is referred to roles,
responsibilities, and relationships among functions. Thirdly, processes and lateral capability.
It refers to decision-making processes, integrative roles, and cross-functional collaboration
mechanisms. Fourthly, reward systems which referring to compensation and recognition,
goals and measurement systems. Last but not least, people practices. It refers to hiring,
performance reviews and training and development.

3. Explain five common organizational structures

There are five common organizational structures which are functional structure, unit
structure, matrix structure, network structure and boundaryless or process structure. The first
common organizational structure is functional structure. It is arguably the most common and
well-known hierarchy structure. In this design, divisions are organized by the type of work
they do so that divisions of marketing, finance, sales, manufacturing, product development
and so on are led by a single executive who reports to a chief executive officer, for example.
The disadvantages of the functional structure include interdepartmental coordination and
complexity. Coordination between functions generally is expected to happen at higher
management levels, which can slow down interdepartmental information sharing unless
other lateral or horizontal capabilities are developed.

The second common organizational structure is unit structure. A unit structure is an

alternative to a functional structure, and it divides responsibilities by the market, product,
service, or geography that the unit serves. A financial services company might choose to
organize by a unit structure, with divisions for auto loans, mortgage loans, retirement
accounts, and banking, which are essentially the different products that the bank offers to
customers. Instead of a single division to handle customer accounts, there might be
separate loan officers, financial advisers, and processing and billing departments in each of
those divisions. This structure has the advantage of focus, where divisions can dedicate their
energies to the unique needs of a given market. However, this unit structure can also lead to
duplication of work and inefficiencies, multiple departments may not be sharing skills and
resources most effectively.

The third common organizational structure is matrix structure. In matrix form, the specialist
functions and unit functions both exist, in some respects. Matrix organizations work
especially well under three conditions. First, they work well when there exist pressures for
multiple areas of focus, such as when a group needs to focus on both technical expertise in
a certain field and unique customer requirements of a given market. Second, matrix
organizations work well when the work is especially complex or interdependent and
additional coordination is required. Finally, a matrix is appropriate when resources need to
be shared for maximum efficiency. When skills are scarce and resources are at premium, a
matrix facilitates reassignments of the scarcest resources to the necessary areas. Matrix
structures can be challenging to implement and can cause role conflict for the individual who
can be caught between the demands of two managers.

The fourth common organizational structure is network structure. The network structure
dissolves the traditional hierarchical functional structure. In one type of network,
organizations may design their own products internally, but may contract with an outside
manufacturer and shipping company to build and deliver products to customers. They may
work with local distributors or third-party providers who may sell directly to customers on
behalf of the company, but these distributors are independent entities, not in-house sales
agents. Network organizations can be cost-effective and flexible, and they can focus the
organization on its central purpose. They can also cause problems when the organizations
must rely on the performance (and organizational health) of an external company over which
it may have little control. The transition from internal ownership to external control can also
be challenging if organizational knowledge or processes are not robust enough to share
effectively.

The fifth common organizational structure is boundaryless and process structure. This
design emerged primarily in high-technology companies where creativity and innovation,
along with rapid product development cycles and quick time to market, were necessary to
remain competitive. The boundaryless design breaks down the traditional hierarchy and
replaces it with cross-functional, often self-managed teams that form and restructure as the
business changes.