MBA 705 LSUS MCLAUGHLIN Practice Guide Exam 3 2026

MBA 705 LSUS MCLAUGHLIN Practice Guide Exam 3 2026 Organizational structure - the formal means by which work is coordinated in an organization. The structure exists to provide control and coordination for the organization Simple structure - each employee does multiple tasks, manager involved in everything Span of control - the number of subordinates who report directly to a manager Vertical growth - increase in the level of the organization's hierarchy (i.e. Levels of management) Tall organization - many hierarchical levels and narrow spans of control Flat organization - few levels in its hierarchy and a wide span of control from top to bottom. Centralization - most decisions are made by top management Decentralization - decision-making authority is given to lower levels in an organization's hierarchy. Horizontal growth - an increase in the breadth of an organization's structure Downsizing - occurs when one or more hierarchical levels—typically middle managers—is eliminated. Four structural forms - 1.Functional Structure- organize by functions. 2.Product Divisional Structure- organize by products. 3.Geographic Divisional Structure- organize by geography. 4.Matrix Structure- combine functional and product divisional structures. Functional structure - }Each subunit of the organization engages in firm-wide activities related to a particular function, such as marketing, human resources, finance, or production. }Common to new organizations }Emphasizes specialization }Fosters development of economies of scale Product divisional structure - }Divides the organization's activities into self-contained entities, each responsible for producing, distributing, and selling its own products. MBA 705 MBA 705 }Focus on products, the "real source" or success for the firm }Pinpointing the responsibility for profits or losses is also easier because each product division becomes a profit center—a well-defined organizational unit headed by a manager accountable for its revenues and expenditures. Profit center - a well-defined organizational unit headed by a manager accountable for its revenues and expenditures. Geographic divisional structure - }Activities and personnel are grouped by specific geographic locations. }Useful when two or more divisions can be dissected easily along geographical lines }Attractive when there are substantial differences in various geographical regions Matrix structure - }A combination of the functional and product divisional structures }Members have "two (or more) bosses," one for the functional area and one or more for the project area(s) }Attractive when the organization faces a high degree of technological change, but can be confusing and complex Considerations when choosing an organization structure - }Level of corporate involvement in business unit operations }Compatibility of the structure with the corporate profile and the corporate strategy }Number of hierarchical levels in the organization }The extent to which the structure permits the appropriate grouping of activities }The extent to which the structure promotes effective coordination }The extent to which the structure allows for appropriate centralization or decentralization of authority Corporate involvement in buisness unit operations - }The extent to which corporate managers are involved in business-level operations varies from one firm to another. }Involvement is sometimes seen as a stabilizing force and is welcomed by top executives in business units. However, some business unit managers refer to "corporate" in a less than positive light and may view such involvement as "interference" or stifling to progress. Corporate Restructuring - A change in the organization's structure to improve efficiency and firm performance, including such activities as realigning divisions in the firm, reducing the amount of cash under the discretion of senior executives, and acquiring or divesting business units. When should you consider the plan for implementation - BEFORE adopting a strategic alternative Organizational culture - }the shared values and patterns of belief and behavior that are accepted and practiced by the members of a particular organization. }An organization's culture and its strategies should be in alignment. MBA 705 MBA 705 }Subcultures represent "cultures within a culture." Adaptive cultures - when members of an organization are willing and eager to embrace any change that it consistent with the core values What do adaptive cultures emphasize - }innovation—developing something new—and encourage initiative. Inert cultures - }Inert cultures are conservative and encourage maintenance of existing resources. Cultural strength - }A strong culture is characterized by deeply rooted values and ways of thinking that regulate firm behavior. }A weak culture lacks values and ways of thinking that are widely accepted by members of the organization. Shaping a culture - Culture change is possible but efforts often fail, due primarily to a lack of understanding about how a culture can be changed and how long it is likely to take . 5 Ways to Shape the Culture - #1- Systematically pay attention to areas of the business believed to be linked to the success of the strategy #2- React strategically to critical incidents and organizational crises #3- Serve as a deliberate role model, teacher, or coach #4- Strategically allocate rewards and status. #5- Modify the procedures through which an organization recruits, selects, promotes, and terminates employees How to accomplish : Systematically pay attention to areas of the business believed to be linked to the success of the strategy. - }This goal can be accomplished formally by measuring and controlling the activities of those areas, or less formally by making specific comments or questions at meetings. These areas should be ones identified as critical to the firm's long-term performance and survival, such as customer service, new product development, or quality control. #2 React strategically to critical incidents and organizational crises. - }The way a CEO deals with a crisis, such as declining sales or technological obsolescence, can emphasize norms, values, and working procedures, or even create new ones. #3- Serve as a deliberate role model, teacher, or coach. - }When a CEO models certain behavior, others in the organization are likely to adopt it as well. }Example: Executives who give up their reserved parking place in favor of the general parking lot send a message about the importance of status in the organization. MBA 705 MBA 705 #4- Strategically allocate rewards and status. - }Leaders communicate their priorities by consistently linking pay raises and promotions, or the lack thereof, to particular behaviors. }Rewarded behavior tends to continue and become ingrained in the fabric of the organization. #5- Modify the procedures through which an organization recruits, selects, promotes, and terminates employees. - }Hire and promote individuals whose values are similar to those of the firm and whose beliefs and behaviors more closely fit the organization's changing value system. }The easiest way to affect culture over the long term is to hire individuals who possess the desired cultural attributes. Global culture concerns - each nation—like each organization—has its own unique culture, traditions, values, and beliefs. }Organizational values and norms must be tailored to fit the unique culture of each country in which the organization operates, at least to some extent. When does a manager exhibit managerial leadership - }when he or she secures the cooperation of others in accomplishing a goal. Strategic leadership - more than managerial leadership. It involves creating the vision for the firm, developing strategies, and empowering individuals throughout the organization to put those strategies into action. Leadership style - }a consistent pattern of behavior when governing and making decisions. Transactional leaders - use the authority of their office to exchange rewards such as pay and status for employees' work efforts and generally seek to enhance an organization's performance steadily, but not dramatically. Transformational leaders - inspire involvement in a mission, giving followers a "dream" or "vision" of a higher calling, thereby seeking more dramatic changes in organizational performance. 5 types of innovation - (1) new products (2) new materials or resources (3) new markets (4) new production processes (5) new forms of organization Creative destruction - managers consciously and constantly destroy the old by recombining its elements into new forms. Emotional intelligence - attributes to manageria/ leader success MBA 705 MBA 705 One's collection of psychological attributes, such as motivation, empathy, self awareness, and social skills. 3 steps to executing strategic change - 1. Recognize the need for change 2. Create a shared vision of what the change will "look like." 3. Institutionalize the change Executing strategic change: recognize the need for change - }Poor performing firms are usually first to recognize the need for change, and often replace their ceos with outsiders. New leaders can sometimes make the decisions that an insider might be reluctant to make, while bringing a fresh perspective to the firm and its problems. Create a shared vision of what the change will "look like." - }The vision might be one of excellent customer service, industry leadership, or a leaner firm following a restructuring. The change effort is likely to be successful if members of the firm share a common vision for the company's future. Institutionalize the change - }"Change starts at the top." Without a strong commitment from the top executive and his or her top management team, strategic change efforts are less likely to succeed. Strategic control - }consists of determining the extent to which the organization's strategies are successful in attaining its goals and objectives. }Strategic control addresses the gaps between the intended and realized strategies. Strategic control process - 1.Determine focus of control. 2.Identify standards or benchmarks. 3.Measure performance. 4.Compare standards to performance. 5.Institute changes as needed. Strategic control Step 1: Focus of Strategic Control - }Focus should be internal: How well is the firm attaining its goals? }Focus should also be external: What recent external changes are affecting the firm? }Both quantitative and qualitative factors should be considered. Step 2: Strategic Control Standards (Benchmarks) - }Set standards for internal factors identified in the previous step. }If possible, standards should be based on competitive benchmarks, best practices, or other targets. }Standards should be as specific as feasible. Competitive benchmarking - }the process of measuring a firm's performance against that of the top performers, usually in the same industry. MBA 705 MBA 705 Best practices - processes or activities that have been successful in other firms—may be adopted as a means of improving performance. PIMS (profit impact of market strategy) program - }contains quantitative and qualitative information on the performance of thousands of firms. PIMS was a pioneer in the 1960s when data for benchmarking was not readily available. Steps 3-5: Exerting Strategic Control - Establish performance targets or benchmarks