centralized v decentralized

Hello Chot,

I agree with your point of view.  Come to think of it, every organization has a flavor of centralized and decentralized.  Companies such as Toyota, in dealing with manufacturing of cars, there is a centralized process in terms of processing the assembly line.  With regards to dealership, each dealership would have the autonomy to do their marketing strategies to meet its dealership goals.

To cite an example wherein decentralization may not work would be third world, developing countries wherein the ruler is a dictator.  The citizens are most likely not as educated as what they may have been deserving to sound off their ideas but rather receive orders or face the consequence of their lives perish.

Filipinos during the ex- President Ferdinand Marcus experienced such consequences during the Martial Law regime when the orders of the president were defied.

Centralized v decentralized

ello Professor and Classmates:

Different firms use very different mixes of vertical specialization, output controls, process controls, and managerial techniques to allocate the authority or discretion to act.  The farther up the hierarchy of authority the discretion to spend money, to hire people, and to make similar decisions is moved, the greater the degree of centralization.  The more decisions are delegated,or moved down the hierarchy of authority the greater the degree of decentralization.

In a nut shell, centralization is the degree to which the authority to make decisions is restricted to higher levels of management.

Decentralization is the degree to which the authority to make decisions is given to lower levels in an organization's hierarchy.

An organization type such as banks like Fifth Third Bankcorp would benefit from a decentralized hierarchy.  President and CEO George A. Schaefer Jr. does not like costly centralized bureaucracy.  He built this regional bank from smaller ones and maintains considerable autonomy for each of the 16 affiliate banks composing Fifth Third.

An organization such as McDonald's will not benefit from decentralized but would benefit with centralized because McD has a uniform way of running their business.  There is a university for one one to attend to learn the wheels of the trade, such as timing on cooking the french fries, the assembly line in preparing the Big Mac.  Closely related to decentralization is the notion of participation.  Many people want to be involved in making decisions that affect their work.  Participation results when a manager delegates some authority for such decision making to subordinates in order to include them in the choice process.

Reference:  p. 399 Organizational Behavior 11e by Schermerhorn, Hunt, Osborn, Uhl-Bien

Organizational Goals and Structure - Discussion

Consistent with the text reading this week, what are some of the pros and cons of a centralized vs. a decentralized organizational hierarchy. What types of organizations benefit from a decentralized hierarchy? What types of organizations don't? What types of organizations benefit from a centralized  hierarchy? What types of organizations don't? 

Week 6 discussion 1

week 6 discussion 2

Resistance to Change (graded)

When Jorge Maldonado became general manager of the local civic recreation center, he realized that many changes would be necessary to make the facility a true community resource. Having the benefit of a new bond issue, the center had the funds for new equipment and expanded programming. All he needed to do now was get the staff committed to the new initiatives. Unfortunately, his efforts have been met with considerable resistance to change. A typical staff comment is, “Why do we need all these extras? Everything is fine as it is.” How can Jorge deal with the employees’ resistance to change, to enable him to move the change process along? Hello Professor and Classmates: In organizations, resistance to change is an attitude that indicates unwillingness to support a desired modification.  Jorge Maldonado, the GM views this resistance as something he has to overcome with his staff at the local civic recreation center in order for change to be successful.  Leaders must recognize that the resistance is to recognize when people resist change, they are defending something that s improtant to them that appears to be threatened.  The staff might be threatened about having to put in more hours of work due to the expanded programming.  People resist change due to fear of the unknown, insecurity, lack of a felt need to change, threat to vested threats, contrasting interpretations, and lack of resources.  The staff might wonder whether the new equipment would get rid of them.  To minimize resistance in such cases, Jorge Maldonado, the leader should make sure that everyone who may be affected by a change knows how it satisfies the following critieria. Benefit - the change should have a clear advantage for the people being asked to change; it should be perceived as "a better way." Compatibility - the change should be as compatible as possible with the existing values and experiences of the people being asked to change. Complexity - the change should be no more complex than necessary; it must be as easy as possible for people to understand and use. Triability - the change should be something that people can try on a step-by-step basis and make adjustments as things progress. Jorge needs to communicate that as part of the funding use generated by the bonds, new equipment and expanded programming are to be introduced to make the facility a true community resource.  Through education and communication, the staff will feel committed on how fortunate they are to get funding for their company.  Jorge should hold a caucus for the staff to participate and get involved so that their commitment to public service would be renewed.

RE: What could SWA & Novo Learn from each other

Serendipity is an accidental discovery of something pleasant. Southwest's staff are not only congenial and service minded, but they are also taking the message about good atmosphere out into the cabin. Effort has been put into creating a good atmosphere within an environment that is normally highly standardized. The safety-instruction talk before take off is accompanied by music and presented by a steward or stewardess. There is no doubt that the passengers are actually astonished.

Novo Norkdisk, a Danish health-care company has shown a superior performance in the company’s stock price performance compared with competitors and NYSE Arca Phamaceutical Index. Long-term financial targets that it set for itself have been met or exceeded. Besides the traditional information – financial growth, profitability, return and cash generation (primarily in relation to its employees and patients) and environmental performance (including carbon emissions resulting from its energy usage and water consumption). The company reports both when it is and when it is not meeting targets in both areas.

SouthWest Airlines and Novo Nordisk can learn from each other that when the company's organizational behavior is directed towards the good of its employees and welfare of its consumers, the financial remuneration will follow, as evidenced by accolades by Fortune magazine, Public Stock Exchange high, positive performance rankings.

References:

http://www.people.hbs.edu/reccles/Insight_Article_2011.pdf

http://www.people.hbs.edu/reccles/Insight_Article_2011.pdf

Leadership

Hello Class: I would like your input in identifying ways organizational politics are beneficial to the organization and to the individual employee. RE: Organizational Politics  Email Mohammad Ali 9/30/2011 1:43:15 AM Hello Professor and class: Politics in an organization are viewed as both negative and positive. Everyone practices politics in some form or in some degree in an organization but viewing politics positively are considered to have a positive force within the organization. Relationships, norms, processes, performance and outcomes are all enormously affected and influenced by organizational politics because they are all intertwined into the management system. Politics and power is a game that most employees in an organization must learn how to play. Once employees recognize and accept that politics are everywhere and they do not place judgment on them, employees can begin to work with them to advance their career.Organizational politics can be a very competitive game. The stakes are high, if employees succeed, they may be able to keep their job or get that desired promotion. However, if the employee loses, he or she may be pounding the payment and looking for a new job. When dealing with company politics employees should know the rules, cultivate a positive image, and keep employers perspective in mind. Organizational politics can cause problems for individuals who work together, but the result can be far more devastating Employees and managers who must concentrate on the political aspects of work may have less time to pay attention to their jobs. The result will be a financial loss for the organization and will eventually lead to loss of jobs. Organizational politics allow some people to be rewarded for behavior unrelated to doing a good job. Political decisions encourage hypocrisy, secrecy, deal-making, rumors, self-interest, self-promotion, this is not a receipt for effective teamwork in the workplace. Respond RE: Organizational Politics  Email Lucille McElroy 10/1/2011 9:30:32 AM Hello Mohammad, Professor and Classmates, I have witnessed organizational politics in my first job as a full charge bookkeeper of a convalescent hospital chain headquarters.  The stakes were surely high in order to earn recognition from your supervisor, owners of the company and colleagues.  That meant arriving before 7 AM, which worked well with me so I got a preferred parking spot, leaving after 12 midnight and spending considerable time at my desk during weekends crunching figures of budgets, meeting deadlines with the county requirements and planning requirements of the three hospitals, which were the accounts I handled.  The owners communicated through the Controller, who I directly reported to, wanted to work on different budgets to see how the company could max the amount we could get from the counties per bed per patient justifying based on historical financial information.  I was not forced, I enjoyed the challenge for quite a while  Through expertise, political savvy and likeability, I was promoted to Assistant Controller in a year replacing a CPA who was doing tax returns of his other Jewish clients on the job. The negative factor was, I got burnt out.  I felt the stress and pressure running through my spine when the company reorganized and expected the impossible.  As a requirement of GMAC to refinance the loan, the bank reconciliation had to be accomplished for the 22 convalescent hospitals including payroll without much needed support. While reading the text, I would like to point out what struck me the most.  Increase personal power by learning to be political savvy.  Political savvy is knowing how to negotiate, persuade, and deal with people regarding goals they are will accept.