Write note on horizontal linkage and coordination?

Horizontal coordination refers to the amount of communication & coordination horizontally across organizational departments. Horizontal communication overcomes barriers between departments. Horizontal communication provides opportunities for coordination among employees to achieve unity of efforts and organizational goals.

Information System: Horizontal linkage is the use of cross-functional information systems. Computerized information system enables managers to exchange information about problems, opportunities or decisions. Company information systems are used to build relationships all across the organization aiming to support across projects and geographical boundaries.

Direct Contact: Horizontal linkage is direct contact between employees affected by a problem. Useful between engineering and manufacturing departments because engineering has to develop and test products to fit the limitations of manufacturing facilities.

Task Forces: When linkages involve several departments, a task force is required. A task force is a temporary committee composed of representatives from each department affected by a problem. Each member represents the interest of own department and can carry information from the meeting back to that department. Reducing information load and are usually disbanded after their tasks are accomplished.

Full-time integrator: A full-time integrator may have a title Product manager, Brand manager, and program or project manager. The brand manager of General Motors is responsible for marketing and sales strategies. The brand manager is also responsible for sales, marketing, distribution and advertising etc.A horizontal linkage device is to create a full-time position for the purpose of coordination.

Team: Project teams are the strongest mechanism. Teams are the permanent task forces and are often used in conjunction with a full time integrator. Mainly used in large scale projects, major innovation, or new product line.

HP uses virtual cross-functional teams, made up of member from various countries to develop a market products & services. A virtual team is one that is made up of organizationally or geographically dispersed member who are linked primarily through advanced information & communication technologies.

Competitive & symbiotic interdependencies relate the strategy you feel fit to manage?

Organizations aim to choose the inter-organizational strategy that offers the most reduction in uncertainty with least loss of control.

Strategies for Managing Symbiotic Resource Interdependencies

Reputation: An organization can build a good reputation in the eyes of customers and suppliers through fairness and honesty, high-quality goods and services, and prompt payment of bills. A dishonest company will be unsuccessful in the long term. Developing a good reputation is the most frequently used linkage mechanism for managing symbiotic interdependencies.

Co-optation: is used to counter problematic forces in the specific environment. An organization brings adversaries inside the organization. Make outside stakeholders inside stakeholders.

How can outsiders be brought inside the organization?

In many countries bribery is used, but it is illegal in the United States. Some use an interlocking directorate, a linkage whereby a director from one company sits on the board of another.

Strategic Alliances: A common mechanism for managing symbiotic (and competitive) interdependencies. It is an agreement that commits two or more companies to share their resources to develop joint new business opportunities. The more formal the alliance, the stronger and more prescribed the linkage and tighter control of joint activities. Greater formality preferred with uncertainty.

Mergers & Takeovers: are the most formal strategies for managing interdependencies. A merger or takeover results in resource exchanges within organizations and prevents control by a powerful supplier or customer. However, mergers and takeovers are costly, and problems arise in managing a new business. This strategy is used if a company must control a critical resource or manage a significant interdependency.

Strategies for Managing Competitive Resource Interdependencies

Competition increases uncertainty, but organizations can use strategies to manage competitive resource interdependencies: collusion and cartels; third-party linkage mechanisms; strategic alliances; and mergers and takeovers. A more formal strategy is an explicit attempt to coordinate a competitor’s activities. Some strategies are illegal in the United States.

Collusion: Collusion, a secret pact among competitors to share data for an illegal purpose, reduces competitive uncertainty.

Cartels: Group that coordinates activities increases the stability and richness of an organization’s environment and reduces uncertainty. For Example the OPEC cartel controls the price of oil.

Although collusion and cartels are illegal in the United States, competitors still plot to coordinate activities.

Third-Party Linkage Mechanisms: An indirect way to coordinate activities is through a third-party linkage mechanism, a regulatory body such as a trade association that shares information and governs competitive practices.

Advantages: Interaction decreases the concern about deceptive organizational practices. The association can lobby the government for favorable industry policies. Third-party linkages assist in managing resource interdependencies and reducing uncertainties. An increased information flow allows an easier response. These linkage mechanisms let companies co-opt themselves and benefit from coordination.

Strategic Alliances: Strategic Alliances manage both symbiotic & competitive interdependencies. By cooperating in a joint venture, competitors save money, deter new entrants, or harm competitors (e.g., developing technology and obtaining a patent).

Mergers & Takeovers: Mergers & Takeovers strengthen a competitive position by increasing a firm’s domain and ability to broaden its product range. Some companies use mergers to become the sole player in the marketplace, a monopoly, which is illegal in the United States and most other developed countries.

Write detail note on mechanistic organizational structure verses organic organizational structure?

Mechanistic Organizational Structure: When the external environment was stable, the internal organization was characterized by rule procedure & clear hierarchy of authority. This is called mechanistic.

Mechanistic Organizations are characterized by high complexity, formalization & centralization. They perform routine tasks, rely heavily on programmed behaviors, and are relatively slow in responding to the unexpected

Task rigidly defined Vertical communication Tasks broken into specialized, separate parts Strict hierarchy of authority and control with many rules Knowledge and control of tasks are centralized at the top

Organic Organizational Structure: In rapidly changing environments, the internal organization was much looser freed flowing & adaptive. Rules & regulations often were not written down or, if written down were ignored. The hierarchy of authorities was not clear. Decision making was decentralized. This is called organic.

Organic organizations are relatively flexible & adaptable. They rely on horizontal communication over vertical communication. Influence is based upon expertise & knowledge rather than on authority of position. Responsibilities are defined loosely rather than rigid job definitions. Emphasis is on exchanging information rather than on giving direction. Employees contribute to common tasks of the department. Tasks adjusted and redefined through employee teamwork.

Mechanistic OrganicTasks are broken down into specialized, separate parts.

Employees contribute to the common task of the department.

Tasks are rigidly defined. Tasks are adjusted and redefined through teamwork.

There is a strict hierarchy of authority and control, and there are many rules.

There is less hierarchy of authority and control, and there are few rules.

Knowledge and control of tasks are centralized at the top of the organization.

Knowledge and control of tasks are located anywhere in the organization.

Communication is vertical. Communication is horizontal.

How Organization Operate? & create value for its stakeholders?

Value creation takes place at three stages: input, conversion, and output.

Inputs: include human resources, information and knowledge, raw materials, money and capital.Conversion: the way the organization uses human resources and technology to transform inputs into outputs.Output: finished products and services that the organization releases to its environment.

For Example: What are the inputs, conversion processes, and outputs at McDonald’s?The inputs include meat, fries, employees, & capital, such as cooking equipment. The conversion process entails cooking the food. The outputs are sandwiches and fries.