Chapter 10 Discussion Questions:

1. If you wanted to add a group of big data scientists to a large organization such as
PepsiCo, would you centralize the scientists in a central pool at headquarters or
decentralize them to separate divisions? Discuss your reasons.

Response: Centralization and decentralization are based on the decisions made at

different levels of an organization. In centralization, those placed at the top of the
organization are given the power to make decisions. On the other hand, decentralization
gives those at the bottom of the organization the power to authorize decisions. The
approach that should be used depends on how the managers of the organization believe
would be the most beneficial to solving the situation. To determine which approach to go
with, the organization must consider several factors such as organizational size, history,
strategy, and availability of managers. Data scientists are important to an organization
because they help solve difficult problems by analyzing data. I believe centralizing the
data scientists would be the most beneficial to PepsiCo because the contribution that is
made by the scientists will be more beneficial when reporting to those at the top of the
organization versus a decentralized approach where decisions are made amongst
several individuals.

2. How does relational coordination differ from teams and task forces? Do you think
that relational coordination seems more valuable for a service technology or a
manufacturing technology? Explain your answer.

Response: Relational coordination is described in the textbook as the level of

communication that takes place between members of an organization. Teams and task
forces are other methods besides relational coordination that increase horizontal
coordination. The difference is that teams work by working with other departments as a
whole and for a longer period of time, versus a task force that focuses on temporary
problems. Of these three, relational coordination is the highest level of horizontal
coordination. There are three basic types of manufacturing technologies which are
small-batch production, mass production, and continuous process production. The
difference between the three depends on its technical complexity, or the extent to which
machinery is required. Service technologies are represented by intangible output and
direct contact with customers. Relational coordination would be more valuable for a
service technology because there is more coordination that occurs in service
organizations than occurs in a manufacturing technology.

3. An organizational consultant was heard to say, “Some aspect of functional

structure appears in every organization.” Do you agree? Explain.
 Response: I do agree with the statement that there is some aspect of functional
structure in every organization. Functional structure, otherwise known as U-form, or
unitary structure, is the way that different functional activities are divided up into the
different departments that make up the organization. Functional structures have a
vertical design that work from the bottom to the top of the organization. Each level of the
organization, starting from the bottom, shares and collects information in their
department and passes it up the hierarchy until it ultimately reaches the very top where
decisions and orders are made. If organizations did not have functional structure, it
would be very difficult for decisions to be made because information would not be
communicated so easily. Divisional structure on the other hand would most likely appear
less in an organization than functional structures simply because divisional structures
are more useful in organizations that produce products for different markets.

4. Some people argue that the matrix structure should be adopted only as a last
resort because the dual chains of command can create more problems than they
solve. Discuss. Do you agree or disagree? Why?

Response: The matrix structure would only be an issue or “last resort” if it is

implemented in the wrong setting. The best situation to utilize a matrix structure would
be in a rapidly changing environment where the organization needs to be more flexible.
If the matrix structure would be used in any other environment, there would definitely be
frustration with the dual chains of command. This would also have an impact on the
global and domestic structures because the goals and agendas of one boss can clash
with the goals and agendas of the other. Another disadvantage is the time lost to
constant coordination of meetings and assignments. I agree with the statement that the
dual chains of command would create more problems than it can solve. It would be best
to use the matrix structure as a last resort due to the high complexity that is involved in
maintaining this type of structure. The matrix structure can successfully be implemented
in an organization that has clear communication and relational coordination.

5. What is the virtual network approach to structure? Is the use of authority and
responsibility different compared to other forms of departmentalization? Explain.

Response: A virtual network structure is an approach that organizations use to

outsource its major functions to separate organizations. The idea behind the virtual
network approach is that there is a small central office that focuses on the main goals of
the organization while allowing other contracted activities to be handled by companies
that specialize in those fields. The virtual network approach has a decentralization
structure where each party responsible for an outsourced activity acts in its own self-
interest. There is a lot more coordination that must take place to ensure that all
departments of the organization are in alignment with the organization’s goals. The
advantages that a virtual network has is that it can be more flexible and has the power to
obtain information and support from experts around the world. Another benefit is that it
 saves the organization money from all the overhead costs. On the other hand, the
disadvantages that are experienced in this structure include low supervision which
causes a lack of control within the organization and creates weak boundaries since all
departments are separated by distance.

6. The Hay Group published a report that some managers have personalities suited
to horizontal relationships, such as project management, that achieve results with
little formal authority. Other managers are more suited to operating roles with
much formal authority in a vertical structure. What type of structure—functional,
matrix, team, or virtual network—do you believe your personality would best fit
into? Which structure would be the most challenging for you? Give your reasons.

Response: Personally, I perform better when operating in a horizontal, or flat, structure

setting. I am familiar with working in this setting and believe that it is effective because
the organization can achieve results with little formal authority. As an assistant
department manager, I am tasked with setting the overall morale for my team as well as
coaching them frequently to help them understand our department goals. The horizontal
structure gives freedom to the managers or specialists to be as creative as possible to
achieve company goals. Furthermore, I would say that my personality would best fit into
either a functional or team approach because they most resemble a flat structure. The
structure that would be the most challenging for me would be a matrix and virtual
network approach because these structures either have too much authority or would
have too many barriers in place that would prevent me from interacting with the entire
team.

7. Describe the primary differences between manufacturing and service technology.

How do these differences influence the type of structure that will be most
effective?

Response: Manufacturing technologies can be categorized into three basic types of

production technology: small-batch production, mass production, and continuous
process production. Service technology is characterized by intangible outputs and direct
contact with customers. The primary difference between the two is that manufacturing
technology produces physical, or tangible, goods that can be seen and touched while
service technology produces intangible services. Another difference is that
manufacturing firms provide no direct contact between employees and customers while
there is direct contact in a service firm. A horizontal structure would be the most effective
in a service industry. A vertical structure would be the most effective in a manufacturing
organization that uses a mass production technique. Small-batch production and
continuous process production would be more effective with a flexible horizontal
structure.

8. Experts say that organizations are becoming increasingly decentralized, with

authority, decision-making responsibility, and accountability being pushed farther
 down into the organization. How will this trend affect what will be asked of you as
a new manager?

Response: I have experienced this situation as a new manager. I personally don’t mind
the decentralization, authority, and responsibility that was placed on me as an assistant
department manager. While it may be overwhelming for others, it was empowering to me
because I was able to start implementing my own ideas for developing my team and
help them achieve our department goals. In the long term, I plan on growing with my
company and will have the experience of making important decisions to support me as I
continue to grow. Once I am able to climb up the hierarchy of my organization, my focus
can shift from making important decisions for my department to developing others who
are willing to grow. In a decentralized organization, decision making is quick,
communication is more efficient, employee morale increases depending on the
manager, and those higher up in the hierarchy don’t have to worry about the small
problems that are quickly handled by lower-level managers.

9. The chapter suggested that structure should be designed to fit strategy. Some
theorists argue that strategy should be designed to fit the organization’s
structure. With which theory do you agree? Explain.

Response: I would agree with the latter statement. All organizations are different;
therefore, the structure that is effective and efficient for one organization may not work at
all in other organizations. However, a strategy that works best in one structure may also
be the best strategy to use in a different organization that uses the same structure.
Strategies should be designed to fit the organization’s structure because they are easier
to change and implement. Organizational structures are more solid and while it is
possible to alter a structure, it is not as fluid to change as a strategy. However, strategy
and structure must work hand in hand in order to achieve company goals and deliver
plans. An organization without a strategy does not have a rigid structure, and without a
structure there is no strategy to achieve results. Once an organization implements a
structure, it is strengthened by the strategy that is put in place. Strategy will always
follow the organization’s structure, meaning that anything that disrupts the structure will
change the strategy to adjust to the organization’s new goals.

10. Would you expect the structure of a company such as Facebook, which operates
almost entirely online, to differ from the structure of a bricks-and-mortar
company, such as AT&T, which uses the Internet only for some things, such as
customer service and business-to-business transactions? Why or why not?

Response: There would definitely be a huge difference between the structures of both
of these companies. Facebook’s focus would be on accomplishing the goals of
delivering a better social media experience to its users. Facebook operates entirely over
the internet and would reach its customers in a different way than AT&T. AT&T’s focus
would be on selling its products and services by internet and through its brick-and-mortar
 stores. Facebook does not sell physical goods like AT&T does. Since Facebook is used
around the world, a matrix organizational structure would probably be the most effective
to use to help achieve the organizational needs while also promoting creativity and
innovation. AT&T would benefit from a horizontal structure since it is better designed for
an organization that sells physical goods. Specifically, a team or functional structural
approach would be the most effective structure for their organization.

Chapter 10: Ethical Dilemma

What Would You Do?

1. Prepare a memo to Golopolus, summarizing the new safety guidelines that affect
the Rockingham product line and requesting his authorization for implementation.

Response: This would be the best scenario to go with. It could be possible that Frank
Golopolous is not aware that certain product lines are not meeting federal safety
guidelines even though that is his responsibility. By preparing a memo to Golopolous
that is short, concise, and to the point, Tom Harrington will be able to reveal the
problems that are present that are preventing meeting the new safety guidelines. This
action will also show the initiative that Tom is taking in his new position and can create a
more trusting relationship with Golopolous. The worst thing that Tom can do is keep
putting off and avoiding questions from the factory floor as it could cause a lot of damage
to the company reputation and more negative attention from the operations manager. If I
were Tom, I would prepare the memo for Golopolous and instead of requesting
authorization I would provide a plan of how I will begin implementing the necessary
changes. I would then carbon copy (CC) the operations manager through email so that
they are aware of the actions taking place to ensure safety guidelines are being met and
initiated by Tom.

2. Mind your own business. Golopolus hasn’t said anything about the new
guidelines, and you don’t want to overstep your authority. You’ve been
unemployed and need this job.

Response: Minding his own business can have a negative effect on Tom Harrington.
While the ultimate responsibility lies on Frank Golopolous, Tom is also expected to
perform at high expectations to provide the best product quality for the company. If the
operations manager, who is Golopolous’s boss, decides to visit the facility to check on its
operations and notices that they safety guidelines are not being met, Golopolous would
be at fault but would then also spread that fault with Tom Harrington since he is also
responsible for ensuring federal safety guidelines are being met. Harrington shouldn’t
feel like he is overstepping authority because he shares the same responsibility as his
boss, Golopolous, does. Tom Harrington instead would be showing initiative to his boss
and the team by setting the expectation that all federal safety guidelines must be met. If
Harrington has plans to grow with the company, this would be a good situation where
 Harrington was placed in a difficult situation that he had to overcome to complete the
responsibilities of his job.

3. Send copies of the reports anonymously to the operations manager, who is

Golopolus’s boss.

Response: This would be the worst situation to be involved in. From experience, I have
learned that it is important to keep your direct supervisor in the loop regarding important
information especially with the safety guidelines that Tom Harrington is concerned about.
In this scenario, the anonymous report could bite Harrington in the butt by placing Frank
Golopolous in a position where he has to address the issue with Harrington. This
situation can be avoided if Harrington communicates his concerns with Golopolous
instead of jumping the gun and blindsiding his boss. If Tom Harrington is that concerned
with this issue that he feels he needs to report to the operations manager, he should
keep Golopolous up to date with the concern and if that doesn’t settle anything then he
can report to the operations manager non-anonymously and with Golopolous’ knowledge
of the concern. This would reveal Tom’s initiative to the operations manager and would
earn his support with ensuring the product quality is up to the company’s expectations.