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business administration (Subject) / BA exam (Lesson)

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• the primary responsibility of top management is ? to determine an organization’s goals, strategy, and design, therein adapting the organization to a changing environment.
• the operative goals the organization actually pursues
• broad scope: competing in many costumer segments 
• narrow scope : compete in a selected customer segment
• Miles and Snow’s Strategy typology:  1) Prospector:  . 2)  Defender:  . 3)  Analyzer.  . 4)  Reactor
•  Prospector: to innovate, take risks, seek out new opportunities, and grow. Suited to a dynamic, growing environment, where creativity is more important than efficiency. Ex: Microsoft. 
•  Defender: almost the opposite of the prospector. The strategy is concerned with stability and seeks to hold onto current customers, but it neither innovates nor seeks to grow. Internal efficiency and producing reliable, high-quality products are important.
•  Analyzer: tries to maintain a stable business while innovating on the periphery. Midway between prospector and defender.
• Contingency effectiveness approaches: approaches to measuring effectiveness on different parts of the organization
• Resource-based approach:  observing the beginning of the process and evaluating whether the organization achieves its goals in terms of desired levels of output. 
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• Internal process approach: looks at internal activities
• Goal approach: identifying an organization’s output goals and assessing how well the organization has attained those goals. 
• Organization Structure Organization structure designates formal reporting relationships  . Organization structure identifies the grouping together of individuals into departments and of departments into the total organization  . Organization structure includes the design of systems to ensure effective communication coordination 
• Five structural design options for grouping employees into departments: Functional grouping: bringing employees together who perform similar functions; Divisional grouping: grouping per product; Multifocused grouping: two structural grouping structures simultaneously, matrix or hybrid structures. Example: each division is divided per product. Horizontal grouping: hrm and finance are in departments, but the other employees are organized around core work processes (dus van inkoop tot eindproduct naar de klant) Virtual network grouping: most recent approach to departmental grouping. Electronic connection for the sharing of information and completion of tasks. 
• Functional grouping: bringing employees together who perform similar functions; 
• Divisional grouping: grouping per product; 
• Multifocused grouping two structural grouping structures simultaneously, matrix or hybrid structures.  
• Virtual network grouping Electronic connection for the sharing of information and completion of tasks. 
• Functional structure: this structure is most effective when in-depth expertise is critical to meeting organizational goals, when the organization needs to be controlled and coordinated through the vertical hierarchy, and when efficiency is important. 
• Divisional Structure:  is the same as product structure or strategic business units. Unless effective horizontal mechanisms are in place 
• Geographical structure: each geographic unit includes all functions required to produce and market products or services in that region 
• Matrix Structure: when an organization’s structure needs to be multi-focused in that both product and function or product and geography are emphasized at the same time.
• Hybrid structure: Organizations often use a hybrid structure that combines characteristics of various approaches tailored to specific strategic need 
• Organizational environment = all elements that exist outside the boundary of the organization and have the potential to affect all or part of the organization.
• Task Environment: includes sectors with which the organization interacts directly and that have a direct impact on the organization’s ability to achieve it’s goals.
• General Environment:  includes those sectors that might not have a direct impact on daily operations of a firm but will indirectly influence them
• Complex environment: organization is influenced by numerous diverse external elements.
• Simple environment: organization interacts with/ is influenced by only a few similar external components.
• Stable environment:  if it remains the same over a period of months or a year
• Unstable environment: environmental elements shift abruptly.
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• Simple + Stable Low Uncertainty
• Complex + Stable Simple + Unstable Complex + Unstable Low-moderate Uncertainty High-moderate Uncertainty High Uncertainty
• simple= complexity= simple= Small number of external elements and elements are similar  complexity= Large number of external elements an elements are dissimilar 
• Stable= Unstable = Stable=   Elements remain the same or change slow.  Unstable = Elements change frequently and unpredictably 
• when the external environment is stable, the internal organization is characterized by rules, procedures and a clear hierarchy of authority = mechanistic organization.
• In rapidly changing environments, the internal organization is much looser, free-flowing and adaptive. The hierarchy of authority is not clear and rules and regulations are often not written down = organic organization. 
• stable environment => unstable environment  mechanistic structure  organic structure
• Motivation for global expansion: Economies of Scale Economies of Scope  Low-Cost Production Factors
• Boundary spanning roles: link and coordinate an organization with key elements in the external environment.  
• Business intelligence: is an approach to boundary spanning. It refers to the high-tech analysis of large amounts of internal and external data to spot patterns and relationships that might be significant. 
• competitive intelligence This gives top executives a systematic way to collect and analyze public information about rivals and use it to make better decisions. Use of internet, digging trash cans etc. 
• Mechanistic organization systems: formalized, centralized organizations. Most decisions are made at the top. Common system for a stable environment.
• Organic organization systems: rganizations where the decision-making authority is decentralized. Common system for an unstable environment with a lot of uncertainty. The organization is more fluid and able to adapt continually. Organic are: learning organization, horizontal and virtual network structure. 
• There are two strategies to manage resources: Establish favourable linkages with key elements in the environment;  Shape the environment domain. 
• Establish Interorganizational Linkages Ownership Contracts, joint ventures Cooptation, interlocking directorates Executive recruitment Advertising, public relations 
• Ownership: When a company buys a part of or a controlling interest in another company, this gives the company access to technology, products or other resources. 
• Acquisition: involves the purchase of one organization by another so that the buyer assumes control.
• Merger: is the unification of two or more organizations into a single unit.
• Formal strategic alliances:  two companies, the firms often go the route of a strategic alliance rather than ownerships through merger or acquisition. 
• Core technology = the work process that is directly related to the organization’s mission

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