Managerial Economics
Organizational structure contributes to the determination of organizational culture in the way that reporting requirements and hierarchy are defined. For example, companies with a flatter structure will have decentralized decision-making. Such a culture would encourage greater levels of creativity and innovation, as well as risk-taking, among the employees. At a company like WL Gore, where the organizational structure is gossamer at best, the organizational culture ends up being highly oriented towards teamwork and innovation. Companies in fast-paced industries prefer to have pared-down organizational structures because those have been shown to correlate with a culture of flexibility (Bock et al., 2012). In contrast, companies with a highly bureaucratic structure have cultures that are more conservative in nature, where employees do not feel empowered to take initiative or to take risks, and those companies tend to be less flexible in nature, which is a strategic hindrance when the environment changes rapidly -- Eastman Kodak after the invention of digital photography was a good example of having the wrong structure/culture.
2. Billy Riggan's problem is that he has not delegated any responsibility. From a structural point-of-view, this has created a situation where he is overworked and the rest of the employees are playing tennis. Simply put, they have nothing to do, because he is not delegating them any tasks. This may create resentment in Billy, but it seems to be Billy's problem. The way that responsibility is delegated within the organization will affect its function. This organization is dysfunctional because it has inappropriate delegation of responsibilities. Research...
What Riggan needs to do here is to delegate some tasks to his co-workers, as this will relieve the burden he feels and provide an opportunity for the other workers to actually get some work done.
3. Seniority-based promotions do not work because they do not reflect the actual competencies required for the level to which a person is being promoted. It is recommended that each job has a set description along with an outline of the skills, knowledge and attributes that are required to excel in that position (Barney & Wright, 1997). The person being hired for the position needs to possess these attributes, as well as the appropriate experience. The reality is that senior management positions are different than shop floor positions. The skills that are required of senior managers are quite different, and you cannot simply pull the oldest worker off the floor and expect that person to succeed at a senior management position.
4. The free rider problem is a situation where someone consumes more than his/her fair share of resources (Investopedia, 2015). With respect to teamwork in organizations, the free rider problem exists when the team is rewarded for outcomes, rather than individuals within the team. The free rider problem is particularly irksome to those who perceive that they are doing most of the work, or the most important work, but where compensation does to recognize the different levels of contribution that different individuals make. There are a few issues at play here. Economically,…
