Welcome to Week 3 of the MGM!
Below you shall find this week's Discussion Question (DQ) as well as my Initial Response (IR) to it. As the week continues I shall update as responses are made. Enjoy!
새해복많이 바드세요!^^
Regards,
El Tanoderno
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Week 03 Discussion Question
Reading: Child, J. (2005) Organization: contemporary principles and practice. Malden, MA: Blackwell Publishing.
In working out your responses to the Discussion Question, you should choose examples from your own experience or find appropriate cases on the Web that you can discuss. Credit will be given for references you make to relevant examples from real companies.
Illustrate the differences between organisation as structure and organisation as process. Determine into which of these categories your own company, or another organisation you know well, falls. Explain your answers.
In addition to credit for references you make to relevant examples from real companies, credit will also be given for properly incorporating, citing, and referencing scholarly sources that help to support your opinions and arguments. While the university values each student’s personal knowledge, a scholarly argument which includes only personal experience and anecdotal support is generally considered incomplete. By incorporating and crediting the words and ideas of others, a writer:
- Establishes credibility with the reader
- Indicates to the reader that he or she has read widely and critically considered multiple points of view on a topic
- Distinguishes his or her position from those of others
- Connects to the existing body of knowledge in a discipline
Follow the steps below to complete this Discussion Question:
- Based on what you learned in this seminar about searching the library and peer-reviewed sources, search the UoL online library databases appropriate for your programme for one peer-reviewed article that you could use to support your argument and response to the Discussion Question.
- Analyse the article you selected for the following aspects of scholarly argument and academic originality:
- How clear is the argument? How is it organised?
- How does the author present his or her original ideas to the reader?
- How and where does the author incorporate outside evidence? Is it used at the beginning of the article to provide background on a topic? Is it used to support a specific point in the author’s argument? Is it used to present an idea and then offer an original critique of that idea? Something else?
- How does the author use citing, referencing, quoting, and paraphrasing in the article?
- How do you know this article is peer-reviewed and generally acceptable for citing and referencing in university work?
- Create a single document which includes the following components:
- Your response to the Discussion Question
- A brief analysis of the article you identified according to the questions above
- A reference list entry for the article which uses the appropriate style guidelines for your programme
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My Initial Response to Week 3's DQ:
Organization as Structure and Process
within Samsung Electronics
Organization as Structure
The organization as a structure of a
company distributes responsibilities among members of said company to
successfully implement objectives through the allocation of staff and the
distribution of responsibilities to tasks whilst controlling and managing said
tasks by designating authority among members of the company into vertical and
horizontal aspects (Child, 2006).
The vertical aspect represents the
hierarchical chain of command, leadership with key decision-makers in the top
tier providing an effective mechanism for supervision and control in large organizations
as well as promoting efficient production and specialized skill development
(Daft, 2009).
The horizontal aspect refers the
specialization of tasks according to specialty, business focus, or geography (Child,
2006).
Samsung Electronics, for example, is a
company that in a structural sense has an elaborative vertical hierarchical
structure which starts at the top with the President, CEO and Vice-Chairman
Gee-Sung Choi, and six more Board of Directors.
The next vertical step is then divided horizontally into specialty by focusing on the acquisition of certain professionals and business focus through eight different divisions and their respective heads, and geographically through 10 regional directors worldwide.
Each division further follows a vertical structure with departments that also contain a hierarchical structure whilst adopting a horizontal structure specializing in different areas.
The next vertical step is then divided horizontally into specialty by focusing on the acquisition of certain professionals and business focus through eight different divisions and their respective heads, and geographically through 10 regional directors worldwide.
Each division further follows a vertical structure with departments that also contain a hierarchical structure whilst adopting a horizontal structure specializing in different areas.
Even though Samsung Electronics has such an
elaborate structure, it still manages to function very well as the World’s
biggest technology company by sales (Song & Oliver, 2010) as decisions, in a
functional organization, are made by senior staff as information has to flow
through the hierarchy before it can be passed horizontally, potentially
introducing delays and distortions in the process (Gardner, 2004).’
Organization as Process
The organization as a process concentrates
on the behavioral aspects of its employees in that it clarifies targets, standards,
policies and standing orders to make sure each one knows of the company’s
expectations in regards to them (Child, 2006).
The previous is to maintain control which may be rewarded individually or to a group such as raises in salary or promotion. By doing so, it embraces time frames and problem-solving techniques that narrowly define problem areas and thus yielding localized improvements that may or may not benefit the entire organization (Gardner, 2004).
An example would be Luis Park, Global Marketing Operations Manager, after working on a feasibility study on the Brazilian market for 4 years, Samsung sent him to Brazil to become a Regional Specialist and thus promoting him on completion of the program as well as sponsoring his MBA (Samsung Village, 2011).
The previous is to maintain control which may be rewarded individually or to a group such as raises in salary or promotion. By doing so, it embraces time frames and problem-solving techniques that narrowly define problem areas and thus yielding localized improvements that may or may not benefit the entire organization (Gardner, 2004).
An example would be Luis Park, Global Marketing Operations Manager, after working on a feasibility study on the Brazilian market for 4 years, Samsung sent him to Brazil to become a Regional Specialist and thus promoting him on completion of the program as well as sponsoring his MBA (Samsung Village, 2011).
Analysis & Conclusion
Samsung Electronics falls into the organization
as structure category, as it has a well-established hierarchy, with low
discretion and high specialization, which generally functions vertically whilst
maintaining a good horizontal distribution allowing it to function as a whole
whilst implementing processing strategies into these horizontal divisions to effectively
control and reward.
To conclude, an organization requires the
right balance of structural and processing strategies, vertically as well as
horizontally, whilst maintaining flexibility to accommodate changes in order to
be successful.
References:
Child, J. (2005) Organization: Contemporary
Principles and Practice. Malden, MA: Blackwell Publishing.
Gardner, R. (2004) The Process-Focused Organization: A Transition Strategy for Success.
Milwaukee: American Society for Quality.
Daft, Richard L. (2009) Organization Theory and Design. 10th
Ed. Mason: South-Western College.
Anon (2011) How Do You Become a Samsung “Global” Manager [Online] Seoul:
Samsung Village. Available from:
http://www.samsungvillage.com/blog/2011/02/how-do-you-become-a-samsung-global-manager.html
(Accessed 21 January 2012)
Song, J. & Oliver, C. (2010) Samsung beats HP to pole position [Online]
Seoul: Financial Times. Available from:
http://www.ft.com/cms/s/2/c48d477a-0c3b-11df-8b81-00144feabdc0.html#axzz1k5t451vn
(Accessed 21 January 2012)
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Andrew,
I enjoyed reading your write up. I just want to make some contribution to the last statement you made about organizations requiring the right balance of structural and process strategy in order to be successful. I quite agree in many ways with this statement. While there are companies that are purely process based, most companies tend to be a mix of both.
I work for a multinational company with a large vertical hierarchical structure, but there still exists processes in place that allows for horizontal relationships and cooperations between units and subsidiaries, and there is in place a good reward system too that cuts across the entire group with employee share holding programs and so on, and these elements are considered components of process based organizations.
On the other hand, process organizations too depend on some structure for support. However, according to Vanhaverbeke & Torremans (1998), the structures are horizontal based or where the pyramid structure is in place, it will be an inverted pyramid with decisions and processes in the hands of the line managers unlike the hierarchical pyramid where decisions lies at the top of the pyramid with the CEO or similar positions.
I found this description interesting and enlightening for understanding the process based organization.
So truly, a structure based organization will need some balance of process strategy like you said, to maintain some flexibility and so would a process based organization.
Regards,
Moses.
Reference:
Vanhaverbeke, W. & Torremans, H (1998) Organization structure of process based organizations [Online]. Available from: arno.unimaas.nl/show.cgi?fid=673 (Accessed: 22 January 2012)
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Andrew,
I enjoyed reading your write up. I just want to make some contribution to the last statement you made about organizations requiring the right balance of structural and process strategy in order to be successful. I quite agree in many ways with this statement. While there are companies that are purely process based, most companies tend to be a mix of both.
I work for a multinational company with a large vertical hierarchical structure, but there still exists processes in place that allows for horizontal relationships and cooperations between units and subsidiaries, and there is in place a good reward system too that cuts across the entire group with employee share holding programs and so on, and these elements are considered components of process based organizations.
On the other hand, process organizations too depend on some structure for support. However, according to Vanhaverbeke & Torremans (1998), the structures are horizontal based or where the pyramid structure is in place, it will be an inverted pyramid with decisions and processes in the hands of the line managers unlike the hierarchical pyramid where decisions lies at the top of the pyramid with the CEO or similar positions.
I found this description interesting and enlightening for understanding the process based organization.
So truly, a structure based organization will need some balance of process strategy like you said, to maintain some flexibility and so would a process based organization.
Regards,
Moses.
Reference:
Vanhaverbeke, W. & Torremans, H (1998) Organization structure of process based organizations [Online]. Available from: arno.unimaas.nl/show.cgi?fid=673 (Accessed: 22 January 2012)
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Dear Moses,
I am glad you found my IR interesting and
thank you for giving me an insight into process-based organization. Could you
elaborate on the inverted pyramid structure as described by Vanhaverbeke &
Torremans (1998), please, in order to gain a better understanding in how it
compares to the more traditional hierarchical pyramid.
Regards,
Andrew
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Andrew,
According
to Vanhaverbeke and Torremans (1998), for traditional structure based
organizations, the chief entrepreneurs are the top level managers who
set and implement corporate strategy. Middle level managers are
administrative controllers while front line managers are merely
operational implementers (P.13). In other words, for the hierarchical
pyramid, the power is concentrated at the top and gets reduced as you go
down the line. However, for customer oriented process based companies,
frontline managers are empowered to act in more entrepreneurial way and
they become the primary initiators of entrepreneurial actions. This is
in recognition of the fact that process teams and owners are suitably
placed to observe the dynamics of the economic environment, to evaluate
changes in customer needs, and are more aware of new customers, markets
and products. The result of empowering the frontline managers means the
structural hierarchy pyramid has to be inverted, in other words, more
power is down below in the hierarchy, with the frontline managers who
head the process based units, as against structural organizations where
power is concentrated at the top of the pyramid.
Middle
and top level managers for process based organizations become
development coaches for the frontline managers and also function as
coordinators across different businesses and regions. They no longer
control the frontline managers but act as support for them. So even
though the structures might remain, top and middle level managers are
now more supportive, thereby stimulating, supporting and guiding
frontline entrepreneurship.
I hope this further clarifies the inverted pyramid concept.
Regards,
Moses.
Reference:
Vanhaverbeke, W. & Torremans, H (1998) Organizational structure of process based organizations [Online]. Available from: arno.unimaas.nl/show.cgi?fid=673 (Accessed: 22 January 2012)
Moses,
Thank you for elaborating on process-based
inverted pyramid structures in general. The way I understand this approach is
that the frontline managers basically work independently to a certain degree acting,
by identifying certain trends and following up on them, through process teams
that come up with real-time solutions to the dynamics involved in the market in
regards to customer needs and the acquisition of new products or developments
to accommodate current as well as future customers.
If this is correct, wouldn’t that mean that
the actual owner or owners of the business give the front-liners partial autonomy
which would lead to the owner’s lack of control over their own business in the
end and therefore their own involvement in the organization?
In my opinion if all of this is correct, it
would restrict the business’ growth and size as well as carrying the potential
of the top-tier falling into factions that might start their own business. The
reason why I say this is because with too many ‘semi-entrepreneurs’ it will be
difficult to keep the idea of starting one’s own business at bay. What
restrictions are put in place to keep such independent employees working for
one?
It was quite insightful and detailed;
however, if you could point me in the right direction of a real-life company that
follows this approach successfully, that would further clarify the use, pros
and cons in adopting said strategy.
Regards,
Andrew
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Andrew,
I
will start by saying that the organization I work for is a structure
based one and so this whole concept of process based organization is
very new to me as well but I am learning. The questions you have raised
are very important and I will attempt to respond but my response again
is based on the paper by Vanhaverbeke and Torremans. I
do not have any example of a large organization to illustrate with, but
the concept as explained by the authors is clear to me and they did
give some illustrations with some Dutch companies.
One
key driving force they have identified on the need for process based
organizations is the fact that with increased competition, customers
have become more demanding. Process based organizations are able to deal
with this by bringing the customer to the fore. So these organization
types are essentially customer based companies.
I
quite agree that there could be some risk with empowering ‘frontliners’
like you said. But Vanhaverbeke and Torremans (1998) also highlighted
the challenge of purely process-based organization in not being able to
deal with activities crossing different processes and so they argued
against processes becoming the only bases for organizational structure.
The solution is that, even though frontline entrepreneurs are empowered,
they do not become completely independent and fully autonomous like you
have said. Business owners also do not lose control of their
businesses. The literature recognized that the frontline managers do not
have the ability for integrating best practices developed in a
particular business unit for example, across different businesses and
regions. Middle and top managers’ roles have to be redesigned for
developing and sustaining the needed cross-process integration and
coordination. So, top management still remain in a kind of ‘superior’
position with their ability to oversee the whole picture and coordinate
across the processes and regions and are therefore able to also serve as
coaches to the frontline managers. The result is not just an inverted
pyramid but an integrated network.
Rather
than stifle growth, the new roles by different management levels, which
allows top management to support and stimulate frontline
entrepreneurship while integrating best practices and dispersed
knowledge across the different business units gives such companies
competitive advantage over traditionally structured companies due to
their ability to be more responsive to new and changing competition
(Vanhaverbeke and Torremans, 1998, p.15).
Regards,
Moses.
Reference:
Vanhaverbeke, W. & Torremans, H (1998) Organizational structure of process based organizations [Online]. Available from: arno.unimaas.nl/show.cgi?fid=673 (Accessed: 22 January 2012)
Moses,
Thank you very much for taking the time to
address my points of concern over this method and, even though it was purely
based on the one paper by Vanhaverbeke and Torremans (1998), you managed to
respond very well and quite elaborately.
From our entire discussion one can deduce
that the paper supports our mutual point of view, that each business requires a
certain balance of process and structure in order to maintain control as well
as function effectively.
Even if one of the two is favored over the
other, a company still needs the less favored approach in order to keep the main
strategy alive and fulfilling the company’s needs on a long-term basis whether
it is function or customer focused whilst tipping the balance according to the
dynamics of the market or customers. This is further supported by Hernaus
(2008) who stated the following based on the paper by Vanhaverbeke and
Torremans (1998).
‘Processes
cannot become the only basis for organizational structure because functional
skills as well as product management remain important. Even more, not all
activities can be aligned along processes, so that cross-process integration
would be necessary in a purely process-based organization.’
‘Furthermore,
a number of control and planning activities are required on a higher level than
the processes.’ (Vanhaverbeke & Torremans, 1998).
By informing me of this approach, you have
awakened an interest to further investigate into this.
Kind regards,
Andrew
References:
Hernaus, T. (2008) ‘Process-based
Organization Design Model: Theoretical Review and Model Conceptualization’. Working paper Series, Paper No.08-06
[Online] Zagreb: University of Zagreb. Available from: http://web.efzg.hr/RePEc/pdf/Clanak%2008-06.pdf
(Accessed 25 January 2012)
Vanhaverbeke, W. & Torremans, H. (1998)
‘Organizational Structure In Process-based Organizations’ NIBOR/RM 98/05 [Online] Available from: http://arno.unimaas.nl/show.cgi?fid=673
(Accessed 25 January 2012)
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My Response to Noriko's Post:
Samsung Group’s founder, Lee Byung Chul,
passed on the group on to his son, Lee Kun Hee, and several key parts of the group
were inherited by the founder’s daughters upon his death in 1987 (Michell,
2010).
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Reference list:
Child, J. (2005) Organisation: contemporary principles and practice. Malden, MA: Blackwell Publishing.
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Dear Noriko,
I have been following this post and wanted
to share some insight into Chaebols, large family-owned organization in Korea,
as they have been compared to the Japanese Keiretsus as well as their
forerunners the Zaibatsus (Kim & Huh, 1993).
Chaebols are large business enterprises
composed of many corporations whose management system uniquely emphasizes relationships
of family, alumni, region, and the government to business in order to survive
as well as expand, especially in regards to family. Key roles are generally
occupied by the offspring of the organization’s founder who in turn will be
replaced by their own offspring upon retirement or death (Chang, 1988).
As an example, five of Hyundai’s founder,
Ju Yung Chung, managed 10 of the group’s members as top executives or were in
top-executive-track position prior to the groups breakup in 2001 (Chen, 2004).
According to LG’s website, Bon Joon Koo, as
of 2010, is the CEO of LG and the company’s founder grandson therefore a third
generation company.
Chaebols main focus seems to be sales and
the increase thereof, for which Korean managers work very hard, although with
no stock option or monetary rewards, instead they look forward moving up in
hierarchy. This in turn is affected by strong Confucian values as it is
uncommon to see a less mature manager move ahead of a more mature one due to
the importance put on seniority and age (Lee, 2004). From this one can tell that Chaebols put a
lot more emphasis on maintaining a vertically well-structured organization whose
Confucian values influence the organization’s process strategies creating a far
more complex, even perhaps a diagonal system compared to non-Korean functional organizations.
How does this compare to
Keiretsu conglomerates and culture, and perhaps to that certain company with a unique flattened
structure you mentioned in your last post?
Regards,
Andrew
References:
Michell, T. (2010) Samsung Electronics and the Struggle for Leadership of the Electronics
Industry [Online] Available from: http://books.google.co.kr/books?id=7nDY0t71--oC&pg
(Accessed 24 January 2012)
Chen, M. (2004) Asian management systems: Chinese, Japanese and Korean styles of
business [Online] Available from: http://books.google.co.kr/books?id=zbaVMDJG8SIC&pg
(Accessed 24 January 2012)
Hi Andrew
Thank you for your response and show us the interesting case in Korea.
There are lot of firms as same as Chaebols in Japan.
That founders want to hold the companies as their assets is no doubt.
Even Toyota's CEO is founder's offspring but not always if offspring was immature. Leadership is the most required factor to be a president. An autocratic president may make serious problems. I know some cases which their business collapsed by an autocratic owner. The individual ownerships will be changing to the group ownerships in a future. I suppose that this is a fate of successful organizations sooner or later. Zaibatsu is one of the evidence.
The grouping of enterprises and franchising and M & A is a worldwide trend for its’ stability and profitability and strategy.
Alliances and other forms of inter-firm cooperation have grown remarkably since the middle -1980(John, C, 2005, p.223 )
The laboratory which I worked for was significantly active to merge other smaller firms.
Thank you for your response and show us the interesting case in Korea.
There are lot of firms as same as Chaebols in Japan.
That founders want to hold the companies as their assets is no doubt.
Even Toyota's CEO is founder's offspring but not always if offspring was immature. Leadership is the most required factor to be a president. An autocratic president may make serious problems. I know some cases which their business collapsed by an autocratic owner. The individual ownerships will be changing to the group ownerships in a future. I suppose that this is a fate of successful organizations sooner or later. Zaibatsu is one of the evidence.
The grouping of enterprises and franchising and M & A is a worldwide trend for its’ stability and profitability and strategy.
Alliances and other forms of inter-firm cooperation have grown remarkably since the middle -1980(John, C, 2005, p.223 )
The laboratory which I worked for was significantly active to merge other smaller firms.
I
would like to post about the firms which install an unique flat systems
in their organizations if I could find the article tomorrow.
Noriko
Noriko
Reference list:
Child, J. (2005) Organisation: contemporary principles and practice. Malden, MA: Blackwell Publishing.
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