UNIT – V

ORGANISATION EVOLUTION AND SUSTENANCE

TWO MARKS

  1. Define Organizational Life cycle.

A Sequence of stages of growth and development through which organizations may pass.An organization undergoes changes in its conceptual and structural dimensions over a period of time & it attains growth, gets matured and eventually dies. The four principal stages of organizational life cycle areBirth, Growth, Decline, Death

  1. Who is an Entrepreneur?

People who recognize and take advantage of opportunities to use their skills and competences to create value.

  1. Define Population Ecology Theory.

Population ecology theory explains the rate at which organizations are born and die in apopulation of existing organizations. A population is the set of organizations competingfor the same resources. All the personal computer companies compete for computercustomers. Different companies in a population focus on different environmental niches, or sets of resources. In the PC industry, Dell focuses on mail order and Appleconcentrates on the educational institutions

  1. What is Population density?

The number of organizations that can compete for the same resources in a particular environment.

  1. What do you mean by First-mover advantage?

The benefits an organization derives from being an early entrant into a new environment. They include customer support, a recognized brand name, & the best locations for new businesses.

  1. Define Organizational growth.

The life cycle stage in which organizations develop value-creation skills and competences that allow them to acquire additional resources. Growth allows an organizations to increase its division of labour and specialization & thus develop a competitive advantage.

  1. Define Institutional Theory.

A Theory that studies how organizations can increase their ability to grow and survive in a competitive environment by becoming legitimate, that is, accepted, reliable and accountable in the eyes of their stakeholders.

  1. What is organizational decision making?

The process of responding to a problem by searching for and selecting a solution or course of action that will create value for organizational stakeholders.

  1. Distinguish Programmed &Non-programmed decision making.

S.No / Programmed decisions / Non-programmed decisions
1 / concerned with the relatively routine problems / Concerned with unique or unusual problems.
2 / These decisions are repetitive and structured in nature / These decisions are unstructured, non-recurring and ill-defined
3 / The Information related to these problems arereadily available and can be processed in a pre-determined manner. / The information related to these problems is not readily available
4 / It takes very little time & effort as there are pre-determined decision rules & procedures / They demand high degree of executive judgment & deliberation
5 / Taken at lower levels of management / Taken at higher levels in the organization
6 / Such decisions are relatively simple and have a small impact / Such decisions are relatively complex & have a long- term impact.
  1. Distinguish: rational model & Carnegie model.

S.No / Rational Model / Carnegie Model
1 / Information is available / Limited information is available
2 / Decision making is costless / Decision making is costly
3 / Decision making is value free / Decision making is affected by the preference & values of decision makers
4 / The full range of possible alternatives is generated / A limited range of alternatives is generated
5 / Solution is chosen by unanimous agreement / Solution is chosen by compromise, bargaining and accommodation between organizational coalitions
6 / Solution chosen is best for the organization / Solution chosen is satisfactory for the organization
  1. What is Organizational learning?

Organizational learning as “the ability of the institution as a whole to discover errors and correct them, and to change the organization’s knowledge base and values so as to generate new problem-solving skills and new capacity for action. Organizational learning is a process of detecting and correcting error.

  1. Define Learning Organization.

Learning Organization as "a group of people continually enhancing their capacity to create what they want to create. Learning Organization is defined as an "Organization with an ingrained philosophy for anticipating, reacting and responding to change, complexity and uncertainty." The concept of Learning Organization is increasingly relevant given the increasing complexity and uncertainty of the organizational environment.

  1. What is Innovation?

Innovation is the ability to define and develop new products and services and deliver them to market Innovation is linked to performance and growth through improvements in efficiency, productivity, quality, competitive positioning and market share. It typically adds value by changing old organizational forms and practices. Organizations that do not innovate effectively may be destroyed by those who do Innovations. It is the fundamental source of value creation in companies and an important enabler of competitive advantage

  1. State the two types of Innovation

Quantum technological change:

A fundamental shift in technology that revolutionizes products or the way they are produced.

Quantum Innovations:

New products or operating systems that incorporate quantum technological improvements.

  1. Define Creativity.

Thetermcreativityusuallyreferstotheabilityandpowerto developnewideas. Creativity is the act of turning new and imaginative ideas into reality. Creativity is the process of bringing something new into being…creativity requires passion and commitment. Out of the creative act is born symbols and myths. It brings to our awareness what was previously hidden and points to new life.

  1. Define project.

A project is a subunit whose goal centers on developing a product or service on time, within budget, and in compliance with certain specifications.

  1. Write a note on Project management.

The planning and organization of an organization's resources in order to move a specific task, event or duty toward completion. Project management typically involves a one-time project rather than an ongoing activity, and resources managed include both human and financial capital. A project manager will help define the goals and objectives of the project, determine when the various project components are to be completed and by whom, and create quality control checks to ensure that completed components meet a certain standard.

  1. Why do organizations decline?

Organizations decline if they fail to manage threats to their survival. In the birth stage, organizations decline if they can’t overcome the liability of newness. In the growth stage, an organization declines if it fails to manage crises, including the crisis of leadership and red tape. Sometimes organizations decline because they grow past the point of maximum effectiveness. Once an organization enters the decline stage, it declines unless top management takes action.

  1. What is organizational inertia? List some sources of inertia in a company like IBMor GM.

Inertia is resistance or lack of inclination to change. Sources of inertia are risk aversion, the desire to maximize rewards, and an overly bureaucratic culture. IBM managers avoided the risk of entry into the PC market and concentrated on mainframes, a source of past success. GM kept producing large cars. Managers at IBM or GM lacked the incentive to improve effectiveness; pay was not tied to performance. These companies had overly bureaucratic cultures and tall, centralized structures that stifled innovation. The cultures emphasized the status quo, not innovation

  1. What causes an organization to be born? Give some examples of birth.

Entrepreneurs recognize and exploit opportunities to use their skills to create value. Some examples include Dell Computer, Blockbuster Video, and Mrs. Field’s Cookies. Many organizations move from birth, the founding stage, to death. This stage has the highest failure rate, because new organizations face the liability of newness, the dangers of being new.

  1. What is the relationship between creativity, intrapreneurship and innovation?

They are very similar concepts. Creativity and innovation can simply be defined as going beyond the current boundaries, including generating new ideas, combining or synthesizing two or more previously unrelated ideas, or modifying a product or process in order to make it better. Intrapreneurs are entrepreneurs inside an organization who actually engage in the process. They are generally attracted to organizations that have an innovative culture that allows them to develop new products and services.

  1. What is project management? How should managers decide which projects to pursue?

Project management is the application of specific management techniques designed to help members in organizations complete a project. Managers often try to take on too many projects at once. They need to develop a process to evaluate proposals and deciding which ones to reject. The stage-gate funnel is a good tool for determining whether or not a project or product has a market, is profitable, and fits in with the organization’s goals and objectives.

  1. What is organizational Decision Making?

Organizational decision-making occurs when problem solving includes seeking and selecting a solution to create value for stakeholders. Managers make programmed and non-programmed decisions.

  1. State the levels of Organizational learning.

Levels of organizational learning include: individual, group, organizational, and inter organizational.

Individual: Each organizational member has to develop personal mastery, meaning employees should be empowered.

Group: Self-managed and cross-functional teams allow individuals to share problem solving skills.

Organization: Managers promote learning through structure and culture.

  1. Write a note on programmed & non-programmed decisions.

Programmed decisions are routine decisions, developed in advance through rules, standard operating procedures (SOPs), and norms.

Non-programmed decisions are new and unstructured decisions, without programmed rules to manage them. Managers rely on intuition and judgment, and solutions are found as problems occur. Non-programmed decisions require more search activity

16 MARK QUESTIONS

  1. Explain the Organizational Life cycle in detail.

Some companies are successful whereas others fail; various outcomes occur because different strategies, structures, and cultures are used to create value. Organizations respond differently to problems.

The four main stages of the life cycle are

Birth: At this stage, the organization is a one-person show with the founder bearing all responsibility for development and management.

Growth: Organizational growth stage of the life cycle occurs as firms develop the ability to acquire resources.

Decline: Organizational decline occurs when a firm fails to manage crises in the growth stage or fails to adapt to pressures.

Death: Persisting in practices of decline leads to organizational failure. Failure to instill or promote transformation leads to organizational death.

  1. What is project management? How should managers decide which projects to pursue?

Project management is the application of specific management techniques designed to help members in organizations complete a project. Managers often try to take on too many projects at once. They need to develop a process to evaluate proposals and deciding which ones to reject.
Project management is the application of specific management techniques designed to help members in organizations complete a project.

Managers often try to take on too many projects at once. They need to develop a process to evaluate proposals and deciding which ones to reject.

The stage-gate funnel is a good tool for determining whether or not a project or product has a market, is profitable, and fits in with the organization’s goals and objectives.

  1. Discuss the models of organizational decision making.

The rational model:

Decision making is a straightforward three-stage process.

Identify & define the problem.

Generate alternative solutions to the problem.

Select solution & Implement it.

The Carnegie model:

The Carnegie model recognizes the effects of Satisficing , bounded rationality & Organizations coalitions.

The Incrementalist Model:

Incrementalist Model of organizational decision making, when selecting a set of new alternative courses of action, managers tend to choose those that are only slightly.

The Unstructured Model:

This model recognizes that decision making takes place in a series of small, incremental steps that collectively have a major effect on organizational effectiveness over time.

The garbage-Can Model:

This model turns the decision-making process around & argues that managers are as likely to start decision making from the solution side as from the problem side.

  1. Identify the factors that reduce the level of organizational learning & result in poor decision making.

Organizational Learning and cognitive structures

Cognitive Dissonances

Illusion of Control

Frequency & Representativeness

Projection & Ego-Defensiveness

Escalation of Commitment