Question: Question is related to Content from Chapter 10 and it is an applied Learning Article review. The purpose of the Applied Learning Assignments is for
Question is related to Content from Chapter 10 and it is an applied Learning Article review.
The purpose of the Applied Learning Assignments is for you to connect course content and theory to how it plays out in individual businesses, industry, or the non-profit sector.
ARTICLE REVIEW (QUESTION):Find an article published (on-line or hard copy) in a business periodical (e.g. Fortune, Business Week, Harvard Business Review, Business Insider, etc.), the business section of a prominent newspaper (Wall Street Journal, New York Times, Washington Post, Financial Times), a periodical (e.g. Time, Newsweek, U.S. News and World Report, the Economist, etc.).The articles should relate to a current business action that relates directly to one of the topics in our text (Content from Chapters 10). The assignment will be evaluated based on the relevance of the articles and your brief description of how the article relates to the topic (Content from Chapters 10).The articles should be current 2016-2021 unless it is a classic academic article on one of the topics.
Bellow is a sample of an article review and the steps followed
Article Review 2
Name xxx
MNGT xxx
https://markets.businessinsider.com/news/stocks/jpmorgan-trading-team-private-market-
companies-stock-robinhood-spacex-tiktok-2020-9-1029582848.
JPMorgan forms team for trading private-market giants like Robinhood and TikTok
Synopsis: JPMorgan is launching a team for trading shares of private companies like TikTok, Robinhood, and SpaceX. There have been several smaller firms to expand into private market trading, but JPMorgan will be the first from a wall street giant. JPMorgan has received interest from hedge funds, company founders, and wealth management clients to form such a team. The reason being, is being able to trade in private companies, it would allow them to bet on younger firms and benefit more from the rapid growth. There are more and more companies that are staying private longer. A lot of these companies have been growing tremendously without issuing an IPO. So basically, JPMorgan Chase clients want to get in on the action and start trading in the private companies because although it may be more risky to bet on a company's early years, if that company grows a lot and actually succeeds, then there would be lots of room to turn a profit.
Discussion: After reading this article, I thought there were a couple of things that related to what we're studying right now, particularly in chapter three. Chapter three looks at the features of a value-chain analysis and I believe this article ties into a primary activity in JPMorgan's value-chain analysis. The primary activity it ties into is that of service. Service includes all actions associated with providing service to enhance or maintain the value of the product. In JPMorgan's case, forming a team so that clients may trade in private markets would be focused on maintaining the value of their product. In this case, their product is their relationship between the client and company, and all the financial services that come along with that. The article talks about how they have received interest from top level executives, company founders, and hedge funds that they would like to trade in these private markets. By listening to the feedback from their clients, they are now able to provide that service for them, deepening the relationship and maintaining their business for the foreseeable future. This article also has to do with a support activity in the value chain, technology development. Once JPMorgan has worked out all the details and put a team together to support this, they are going to have to enable the trading to take place on their customers brokerage accounts. Which means updating the mobile app as well as online banking. At the end of the day I believe that JPMorgan Chase is a technology company as well as an investment bank because they are always on the leading edge for new banking software and technology for their client's disposal.
Questions for Discussion: Do you think other Wall Street giants will follow JPMorgan in enabling trading to occur in private markets? Who do you think will be next? How will this affect JPMorgan as a whole, do you think it will have a positive or negative affect on them?
References
Winck, B. (2020, September 11). JPMorgan forms team for trading private-market giants like Robinhood and TikTok, report says | Markets Insider. Business Insider.
https://markets.businessinsider.com/news/stocks/jpmorgan-trading-team-private-market-companies-stock-robinhood-spacex-tiktok-2020-9-1029582848.
Reference
chapter 10 study material reference
Chapter 10 Part 1
Creating Effective Organizational Designs
Learning Objectives
10-1 The growth patterns of major corporations and the relationship between the firm's strategy and its structure.
10-2 Each of the traditional types of organizational structure: simple, functional, divisional, and matrix.
10-3 The implication of a firm's international operations for organizational structure.
10-4 The different types of boundaryless organizations- barrier-free, modular, and virtual- and their relative advantages and disadvantages.
10-5 The need for creating ambidextrous organizational designs that enable firms to explore new opportunities and effectively integrate existing operations.
Organizational Designs
To implement strategy successfully, firms must have appropriate organizational designs.
Strategy drives design.
How should a firm coordinate internal operations? And how should a firm integrate its operations with external parties?
How can these internal & external boundaries be made both flexible and permeable?
Organizational Structure
Organizational structurerefers to formalized patterns of interactions linking.
- Tasks
- Technologies
- People
Structure provides a balance between:
- The need for division of tasks into meaningful groupings
- The need to integrate these groupings for maximum efficiency and effectiveness
Organizational Structures: Growth Patterns
Exhibit 10.1 Dominant Growth Patterns of Large Corporations
Source: Adapted from J.R. Galbraith and R.K. Kazanjian. Strategy Implementation: Structure, Systems and Process, 2nd ed.,1986,St Paul, MN: West Publishing Company.
Organizational Structures: Simple Structure
The simple organizational structureis the oldest & most common organizational form.
- The organization is small, with a single or very narrow product line.
- The owner-manager makes most of the decisions.
- The staff serves as an extension of the top executive.
Simple Structure Advantages & Disadvantages
Advantages
- Highly informal
- Coordination of tasks by direct supervision
- Centralized decision making
- Little specialization of tasks
- Few rules & regulations; informal reward systems
Disadvantages
- Responsibilities not understood
- Self-interest, employees taking advantage of lack of regulations
- Limited opportunities for upward mobility
Organizational Structures: Functional Structure
The functional organizational structureis where the major functions of the firm are grouped internally.
- The organization is small, with a single or closely related product or service, high production volume, perhaps some vertical integration.
- The owner-manager needs specialists in various functional areas.
- The chief executive has responsibility for coordination & integration of the functional areas.
Functional Structure Example
Exhibit 10.2 Functional Organizational Structure
Functional Structure Advantages & Disadvantages
Advantages
- Enhanced coordination & control
- Centralized decision making
- Enhanced organizational-level perspective
- More efficient use of managerial & technical talent
- Facilitated career paths in specialized areas
Disadvantages
- Impeded communication & coordination due differences in values & orientations-"silos"
- May lead to short-term thinking
- Difficult to establish uniform performance standards
Organizational Structures: Divisional Structure
The divisional organizational structureis where products, projects, or product markets are grouped internally.
- Divisions are relatively autonomous, consisting of products & services that are different from those of other divisions.
- Although governed by a central corporate office, each division includes its own functional specialists.
- Division executives help determine product-market & financial objectives; decision making is delegated to lower-level managers.
Divisional Structure Example
Exhibit 10.3 Divisional Organizational Structure
Divisional Structure Advantages & Disadvantages
Advantages
- Separation of strategic & operating control
- Quicker response to changes in the market environment
- Fewer problems sharing resources across functions
- Development of general management talent is enhanced
Disadvantages
- Very expensive duplication of functions possible
- Dysfunctional competition among divisions
- Differences in image & quality possible across divisions
- Too much focus on short-term performance
Chapter 10 Part 2
Creating Effective Organizational Designs
Organizational Structures: SBU Structure
The strategic business unit (SBU) structureis where similar products or markets are grouped into units to achieve synergy.
- Variation on the divisional structure
- Similar divisions grouped into homogeneous units
- Synergies achieved through related diversification- leveraging core competencies, sharing infrastructures, using market power
- Each SBU operates as a profit center
SBU Structure Advantages & Disadvantages
Advantages
- Planning & control by the corporate office
- Decentralization of authority
- Quicker response to changes in the market environment
- Synergies through sharing core competencies, infrastructures, & market power
Disadvantages
- Possible difficulty in achieving synergies
- Increased personnel & overhead expenses
- Corporate office further removed from the divisions
- Corporate unaware of key changes in market conditions
Organizational Structures: Holding Company Structure
The holding company structureis where businesses in a corporation's portfolio are the result of unrelated diversification.
- Variation on the divisional structure
- Similarities are few, synergies are limited
- Autonomous operating divisions
- Small corporate staffs, with limited involvement, relying on financial controls & incentive programs to obtain performance
Holding Company Structure Advantages & Disadvantages
Advantages
- Cost savings due to fewer personnel and lower overhead
- Divisional autonomy increases motivation level of divisional executives
- Quicker response to changes in the market environment
Disadvantages
- Potential for synergies is very limited
- Corporate office has little control
- Difficult to replace key divisional executives if they leave
- Turnaround may be difficult due to limited corporate staff support
Organizational Structures: Matrix Structure
The matrix organizational structureis where functional departments are combined with product groups on a project basis.
- Functional departments, product groups & geographical units can be combined.
- Individuals have two managers.
- Project managers & functional managers share responsibility.
- Product managers handle development, manufacturing & distribution of their own line.
- Geographic managers are responsible for profitability of the business in their regions.
Matrix Structure Example
Exhibit 10.4 Matrix Organizational Structure
Matrix Structure Advantages & Disadvantages
Advantages
- Increases market responsiveness, collaboration & synergies
- Allows more efficient utilization of resources
- Improves flexibility, coordination & communication
- Increases professional development
Disadvantages
- Dual reporting relationships lead to uncertainty regarding accountability
- Can lead to power struggles & conflict
- Relationships are complicated, need teamwork
- Decision making takes longer
Organizational Structures: International Operations
Firms with international operationsmust consider a structure based on the following:
- Type of strategy driving the firm's foreign operations
- Degree of product diversity
- The extent to which a firm is dependent on foreign sales
International Operations Multidomestic vs. Global
Multidomestic strategies use...
- International division structure
- Geographic-area division structure
- Worldwide matrix structure
Global strategies use...
- Worldwide functional structure
- Worldwide product division structure
- Worldwide holding company structure
International Operations Global Startup
A global start-up:
- Uses inputs from around the world
- Sells its products & services to customers around the world
- Has communication & coordination challenges
- Has fewer resources than well-established corporations
- Must use less costly administrative mechanisms
- Frequently chooses a boundaryless organizational design
Chapter 10 Part 3
Creating Effective Organizational Designs
Organizational Structures: Boundaryless Designs
A boundaryless organizational designmakes these boundaries more permeable:
- Vertical boundaries between organizational levels
- Horizontal boundaries between functional areas
- External boundaries between the firm and its customers, suppliers, & regulators
- Geographic boundaries between locations, cultures, & markets
Boundaryless designs include barrier-free, modular, & virtual organizations.
Boundaryless Designs: Barrier-Free Organizations
A barrier-free organizationhas permeable internal & external boundaries and requires:
- Higher level of trust and shared interests
- Shift in philosophy from executive development to organizational development
- Greater use of teams
- Flexible, porous organizational boundaries
- Communication flows & mutually beneficial relationships with both internal and external constituencies
Barrier-Free Structures Pros & Cons
Exhibit 10.6 Pros and Cons of Barrier-Free Structures
Boundaryless Designs: Modular Organizations
A modular organization requires seamless relationships with external organizations.
- Outsources nonvital functions or non-core activities to outsiders
- Activates knowledge & expertise of"best in class" suppliers but retains strategic control
- Focuses scarce resources on key areas
- Accelerates organizational learning
- Decreases overall costs, leverages capital
Modular Structures Pros & Cons
Exhibit 10.7 Pros and Cons of Modular Structures
Boundaryless Designs: Virtual Organizations
A virtual organization requires forming alliances with multiple external partners.
- Continually evolving network of independent companies
- Linked together to share skills, costs, & access to one another's markets
- Coping with uncertainty through cooperative efforts
- Each gains from resulting individual & organizational learning
- May not be permanent
Virtual Structures Pros & Cons
Exhibit 10.8 Pros and Cons of Virtual Structures
Source: Miles, R.E. & Snow, C.C. 1986. Organizations: New Concepts for New Forms. California Management Review, Spring: 62-73; Miles & Snow. 1999. Causes of Failure in Network Organizations, California Management Review, Summer: 53-72; and Bahrami, H. 1991. The Emerging Flexible Organization: Perspectives from Silicon Valley. California Management Review,Summer: 33-52.
Boundaryless Designs: Making Them Work
A"virtual" boundaryless organization requires:
- Mechanisms to ensure effective coordination and integration
- Common culture and shared values
- Horizontal organizational structures
- Communications and information technologies
- Human resource practices
- Awareness of the benefits and costs of developing lasting internal & external relationships
Boundaryless Designs: Benefits & Costs
Benefits
- Agency costs are reduced through the use of relational systems.
- Transaction costs between the firm and its suppliers are reduced.
- Individual participants are less likely to perceive a conflict of interest.
Costs
- Relationships between individuals become more important than profits.
- Conflicts are resolved through ad hoc negotiations & processes.
- Relationships are driven more by social connections than by needed competencies.
Organizational Structures: Ambidextrous Designs
Ambidextrous organizational designsaddress two contradictory challenges.
- How to maintain adaptability
- How to achieve alignment
Ambidextrous organizations
- Aligned and efficient while they pursue modest, incremental innovations
- Flexible enough to adapt to changes in the external environment and create dramatic, breakthrough innovations
Ambidextrous Designs: Effectiveness
Ambidextrous organizational designs:
- Effectively integrate and coordinate existing operations
- Establish project teams that are structurally independent units
- Pay attention to each unit's processes, structures, & cultures
- Effectively integrate each unit into the existing management hierarchy
Coming up this week
In class
- Class time this week will be devoted to finding and discussion examples of organizational structure. To prepare for class, identify companies that interest you, find their annual reports, and see if you can determine their structure.
- How is your BSG company organized based on what you read in this Chapter? If you were to diversify, what business, product, or market would you move into?
OR
Use this link to access chapter 10 material: https://slideplayer.com/slide/4623329/
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