MIDTERM: UP UNTIL COLLINS & PORRAS
FINAL: NO ZALEZNIK? Chandler Greiner
2 KEY CONCEPTS: EAR – Evolution & Revolution as Organizations Grow
1. Economies of scale: as production increases, costs MAJOR CLAIMS:
decrease – doing things @ a bigger scale reduces costs 1. Organizational growth occurs through a series
2. Economies of scope: large plants can use the same raw of evolution & revolution phases (5) that R a
materials & production processes to produce various function of the age/size of the organization
products 2. Management practices that work well in 1
phase bring on a crisis in the next
3 MAJOR CLAIMS:
1 -mover organizations invest in: In order for a company to be able to progress and move
1. National & int’l marketing distribution functions on, it must go through phases of evolution and
2. Teams of lower & middle managers revolution and constantly be changing its organizational
3. R&D (Innovation & strategy)
*Require both economies of scale & scope By implementing the right strategies & managerial
structures, firms can resolve the crisis and move on.
Successful firms capitalize on economies of scale & scope;
they have a functional management structure and invest KEY CONCEPTS:
in R&D & grow from related diversification. This will allow • Age of organization
them to stay ahead of competition.
• Size of organization
• Stages of evolution
SECONADRY CLAIMS: • Stages of revolution
1. Once a firm loses the opportunity to B a 1 mover,
• Growth rate of industry
it’s difficult to regain its competitive advantage • Management style
2. Entrepreneurial companies that don’t invest to
• Organizational structure
create organizational capabilities/specialties
cannot achieve long-term success. * Each phase begins with a period of evolution and has
3. Growth through unrelated diversification is a its moments of stability and growth but eventually ends
poor corporate strategy with a revolutionary period
4. Business ownership patterns have diminished the * Management practices that work well in one phase
likelihood of many firm’ long-term success can bring crisis & chaos in another
Managerial enterprise: Making necessary investments in
management, production and distribution in order to
capitalize in economies of scale and scope.
R&D: New technologies, improving quality (innovation)
Management hierarchy: separation of upper and lower
SOLUTIONS TO CRISIS: SECONDARY CLAIMS:
1. Find strong manager with 1. Organizations should not
knowledge & skill to lead. try to skip phases.
2. Work 2. Top managers whose
3. Special coordination style is no longer
4. Collaboration appropriate should remove
5. ? themselves
3. Growth is not inevitable Jay Barney
1. A frim will have a sustained competitive advantage if its resources & capabilities are valuable, rare,
inimitable, & organized in a way that allows it to exploitn ew potential opportunities.
2. A firm will be successful if it has resources with the right attributes and characteristics.
3. A complete understanding of sources of competitive advantage requires the analysis of a firm’s
internal strengths & weaknesses as well.
* A firm’s resources & capabilities include all its assets
used to develop, manufacture, & deliver products or
services to its customers.
• Financial: debt, equity, retained earnings, etc.
• Physical: machines, manufacturing facilities,
• Human; experience, knowledge, judgement,
• Organizational: history, relationships, trust,
culture, formal reporting structure, patents, etc..
In order to explain a firm’s success, strategists need to
analyze the implications of its internal strengths &
weaknesses – a complete analysis of its competitive
environment is insufficient.
Four Important questions about resources and capabilities (VRIO)
1. The Question of Value: Does a firm’s resources & capabilities enable it to exploit an opportunity,
&/or neutralize it?
2. The Question of Rareness: How many competing firms already possess these valuable resources &
3. The Question of Imitability: Do firms without a resource or capability face a cost disadvantage in
obtaining it compared to firms that already possess it?
à There are 3 reasons why resources can be hard to imitate:
a. Historical conditions: Valuable & rare resources acquired/ b. The importance of numerous
developed through unique historical circumstanc es can be costly to small decisions: A firm’s competitive
imitate & thus a source of sustained competitive advantage. advantage seems to depend on
numerous “small decisions” through
c. The importance of socially complex resources: The resources and which a firm’s resources &
capabilities that are based on a company’s culture or interpersonal capabilities are developed &
relationships (reputation, trust, friendship, teamwork,& culture,
while not patentable, R more difficult to imitate).
4. The Question of Organization: Is a firm organized to exploit the full competitive potential of its
resources & capabilities? *Remember the fallacies!!!
Collin & Porras BEHAG*********BE
Vision : provides guidance about what core to preserve and what Futu re to simulate progress toward.
Core ideology Discovering Core
Enduring character of an organization and is the source of guidance and
(You do not set it, you discover it)
inspiration. It is the glue that holds the organization together as it
grows, diversifies, and expands globally. It is the consistent identity of
the organization that transcends the product or market life cycles. àNeeds to be authentic. Its role is to
guide and inspire.
à Needs to be meaningful and
Beliefs about what is important. Small set of timeless guiding principles. inspirational only to people inside the
organization because they need to
Company should not change core values in response to market change.
commit to the ideology over the long
Core purpose: (reason for existing ) term.
The organization’s reason for being people’s idealistic motivations for
working at the company. à Not a goal or business strategy . * A clear and well-articulated ideology
Core purpose is to guide and inspire. attracts people whose personal values
are compatible with the company’s
à Core values & core purpose:
1. BHAG (big hairy audacious goal). attract & retain those people.
2. Vivid Description (what it will be like to achieve goal).
Core ideology ≠ core competence
BHAG: Engages people- it reaches out and grabs them. It is
tangible, energizing, highly focussed.
Vision level BHAG:
- Applies to the entire organization and requires 10- 30
years to complete
- Setting the BHAG that far into the future requires
thinking beyonf the current capabilities of the
organization and the current environment.
BHAG should not be a sure bet, 50-70% success rate.
Organization must believe that it can reach the goal.
Vibrant, engaging, and specific descripti on of what it will be like
to achieve BHAG. Must translate the vision from words to image
that people can carry around in their heads. Passion, emotion,
and conviction are essential parts of the vivid description. Hertzberg - KITA
1. Hygiene factors: Needed to ensure an employee does not become dissatisfied. They do not lead motivation, but
without them, there is possibilities of dissatisfaction.
Ex. Working conditions, qulity of supervision, status, security, salary, company policies, interpersonal relations.
2. Motivation factors:
Needed to motivate an employee into higher performance motivators are the primary source of satisfaction.
Ex. Achievement, responsibility, growth, advancement for higher level task, interest in job, recognition for
Negative KITA (Kick In the Ass) – when some1 stands over your shoulder – stresses U out
Positive KITA – Do something for me & I’ll give U something 4 it
Some S eps 4 Job Enrichment
• A good manager knows when 2
Combining hygiene & motivation factors
1. High hygiene & high motivation: Ideal situation where employees are highly motivated and have few
2. Hygiene & low motivation: Employees have few complain ts but are not motivated. Job seen as
3. Low-hygiene: Employees are motivated but have lots of complaints. A situation where job is exciting
and challenging but salaries and work conditions are poor.
4. Low-hygiene & low motivation: Unmotivated employees with lots of complaints.
Job Loading Job enlargement
Horizontal job loading: Horizontal job enlargement : Widening the range of
- Adding tasks to a job but not responsibilities. jobs at the same level in the organization and
- The meaning of the job is simply increased. adding them to the existing job. Hertzberg says
there is little motivation value in this approach.
Vertical job loading:
- Adding meaningful tasks that will lead to Vertical job enlargement (Job enrichment):
growth. Provides employees with more task to do as a part
- Additional tasks that permit growth and of the job and gives them the responsibility and
provide motivating factors. authority needed to complete the task.
- Gives people responsibility for the complete
process of the task.
Job rotation - Make information directly available to employees
rather than send it through their managers.
Planned rotation of staff between jobs to
alleviate monotony (lack of interest and - Enable people to take on new, more difficult tasks
they haven’t before.
variety) and provide a fresh job challenge.
Hertzberg says it is likely to improve job à Employees gain an enhanced sense of
satisfaction but unlikely to create positive responsibility and achievement, along with new
opportunities to learn and grow.
motivation. French & Raven - CLERR
Theory that identifies 5 bases or sources of social organizational power.
1. Coercive power: is the
5. Referent power: is the influence
understanding that one has the
ability to punish other for not one has on others from being well
liked or respected by others.
4. Reward power: is the ability to
2. Legitimate power: is based on the
compensate another for their