Organizational Design and

Culture
Introduction to Strategy and Organization
(ECB1SO)
Presentation | Dr. J.P.C. (Coen) Rigtering

4/22/15

Woodward
Burns & Stalker
Perrow
Lawrence & Lorsch

Frederik Taylor
Henri Fayol
Max Weber

1900

1950

Universal proces approaches

Child

Schein
Peter &
Waterman
Martin

2000

Contingency Strategic
and
Choice
environmental
determinism
Spreker

Cultural
approaches to
management
4/22/15

Henri Fayol and

classical management theory
Forecasting
o Predicting what might happen in the future

Planning
o Course of action to meet the expected demands

Organizing
o Allocating separate task to departments, units and individuals

Coordinating
o Making sure that tasks are integrated and people work together

Controlling
o Monitoring the progress

Key principles of efficiency

3

o Functional division of work, hierarchical relationships, control, low span of control,

and closely prescribed roles.
Introduction to Strategy and Organization
4/22/15

Max Weber and the

rational bureaucracy
Authority can be based upon superior
knowledge and qualifications
Authority can be based upon the
position itself

Introduction to Strategy and Organization

4/22/15

Ideal type characteristics of a bureaucracy

Webers ideas
1. Activities required for the purpose
of the organization are distributed in
a fixed way.
2. Recording
3. Abstract rules that apply to
particular cases
4. Conduct task in spirit of
formalistic impersonality
5. It constitutes a career
6. Bureaucracy leads to efficiency
5

Influence on modern organizations

1. Formal job descriptions, job titles,
specialization and horizontal division
of labor
2. Administration and formally
recording decisions
3. Universalism, rules apply to
everybody
4. No favoritism or impartial decision
making
5. Recruitment and meritocracy
6. Means to end structure

Introduction to Strategy and Organization

4/22/15

Henry Mintzberg (1970), bureaucratic mechanisms

Manager

Manager
Staf

Staf

Employee

Employee

Employee

Employee

2. Direct supervision

1. Mutual adaptation
Manager
Staf

Standardization

Employee

3. Input skills

Employee

4. Work
5. Output
processes

The displacement of goals

Rule > exception to rule > new rule

Representative bureaucracy
o

Punishment centered bureaucracy

o

Worker goals and organizational goals are the same,

rules benefit both groups
Rules benefit one party (usually the managers)

Mock bureaucracy
No party has interests in the rules
o Avoid unpleasant aspects of bureaucracy and justify
this in terms of larger goals (see Peter Blau)
o

How do supervisors deal with formal rules?

o
7

Work to rule, strategy versus flexibility

Introduction to Strategy and Organization

4/22/15

Contingency approaches
The most suitable organizational structure
depends (is contingent) upon the technology
being used or the environment in which the
firm operates.

Introduction to Strategy and Organization

4/22/15

Overview different studies

Author

Contingency

Result

Woodward

Technology

If technical complexity increases, a lower span of

control and more monitoring improves performance.

Perrow

Technology

If the organizations tasks and technology are more

routine, bureaucratic structures improves firm
performance

Burns & Stalker

Operating
environment

Mechanistic (bureaucratic) structures work better in

stable environments and organic (flat / little tasks
specialization) structures perform better in unstable
environments.

Lawrence &
Lorsch

Operating
environment

When environmental uncertainty increases firms

have to vertically and horizontally differentiate
themselves in order to effectively respond to
demands by different sub-environments. This, in turn,
increases the amount of integration (coordination)
that is needed.

Introduction to Strategy and Organization

4/22/15

Determinist versus Strategic

Choice
In a contingency approach, the environment
puts forth requirements to which the
organization has adapt
Strategic choice theory holds that managers
can decide which organizational structure the
firm will have

10

Introduction to Strategy and Organization

4/22/15

ARTEFACTS
Slogan

Building
VALUES

Image
Respect

Groupwork

Be the best
BASIC ASSUMPTIONS
How does the firm compete?
Collaboration or competition?
Who should make decisions?
Can employees be trusted?
Are employees creative?

Manager
decides

Trust
Innovation
Symbols
11

Respect
authority
Heros

Language

4/22/15

Can a firm create a strong culture?

Management theories see an organizational culture
as something that a firm has, is integrated (similar
throughout the firm), can be managed and should be
managed
Social scientists see a culture as something that is
established, heavily fragmentized (differs from
department to department) and is tolerated by
management

12

Introduction to Strategy and Organization

4/22/15

The proces of socialization

Heineken traineeship (finance track)
o Work in all the main departments (Heineken NL,
Heineken International, Vrumana)
o Team of mentors (line manager, management
developer, personal mentor)
o Heineken Finance Academy (communication training,
time management training and Heineken introduction
program)
o Selection (letter/CV, 3 interviews and external
assessment)

13

Introduction to Strategy and Organization

Enginering a strong culture

14

Analysis Zappos
Basic
assumption

Values

Artifacts

Openness

Please visit our head office

Customer loyalty
(repeat purchases)
leads to firm
performance

Customer service is key

Make time for the customer

Change name call center

365 day return policy
Easy return policy
Story lifetime spending
WOW our customer
New record longest telephone call
Number call center easy to find on
the website
All employees first work at the call
center

Culture/employees
build the brand
(and culture
therefore leads to
firm performance)

Fun / happiness at the

workplace
Achievements more
important than qualifications
Culture more important than
qualifications

Book and bus tour

Story CFO
How do you WOW the workforce
Separate interview for culture fit
Offer $ 2.000,-

See you next week!