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Citigroup April 11, 2007

Posted by collage9 in Finances, Organizational Design, Public Interest.
4 comments

Citigroup, the nation’s biggest bank, just announced that it will be cutting 17,000 jobs.  About 7,300 of these job cuts will occur within the U.S.  The bank is doing this in an effort to dramatically decrease costs, which have been growing much faster than revenues recently.  Citigroup says that $10 billion will be saved through the domestic job cuts alone.  This is of course an enormous amount of money and seems as though it should help the company.  Especially due to the recent presuure they’ve been receiving from shareholders to improve their bottom line.

But, I wonder if this is indeed the best move for the company.  The article also went on to say that perhaps Citigroup should be more concerned with increasing revenues rather than decreasing costs.  It seems as though it is just sending a message to their investors that they are attempting to do something to fix the problem.  I think they should definitely be concentrating on increasing revenues as opposed to simply decreasing costs.  The cost cutting seems more like a temporary remedy to the problem, a problem that won’t go away until the bank makes other changes.  Citigroup claims that the job cuts will increase efficiency and eliminate overlapping jobs, but critics continue to be skeptical if this appraoch will actually work.

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The Informant April 11, 2007

Posted by Kira in Class announcements, Organizational Design, Organizational Environment.
1 comment so far

As I was reading my book for the project, I found a part that relates to my last blog entry.  In my last blog, I discussed a little bit about the Japanese culture or style of doing business.  I discussed how corporate takeovers used to be rare because of the deep cultural aversion to selling one’s company and how this was considered a humiliating failure by the founders and owners.  I also mentioned how there is also a cultural aversion to confrontation.  In the book The Informant, the main company ADM is involved in price-fixing with Japanese companies.  At one of their secret price-fixing meetings, the book describes a variation of a classic Japanese negotiating strategy known as “naniwabushi.”  The book states that “in Tokyo, the method is effective in resolving disputes without confrontation” (195).  I thought that this parallel was interesting.  The Japanese have maintained their strategy and culture of avoiding confrontation that was used in the price-fixing negotiations up until now in the recent article I read.  

I am half way through the book- it moves pretty quickly.  There are so many different characters and detailed conversations that take place in the book that it is hard to remember it all and keep it all straight!  I can’t believe that this investigation is a true story- how does so much illegal activity take place and be kept so quiet?  I guess that is where the organizational structure and culture come into play.

I think for our project just focusing on what is going on inside ADM, the main company, which allows for all of the illegal activity, is the best approach.  I think it may be interesting to try and set up an organizational chart for the company- it seems as though it would be very fragmented and would have bad flows of information between employees and product divisions.  Do you think it would be interesting to try and provide a recommendation for the company on how to fix their structure and maybe even design a new organization chart?  Do you think we should focus on the organization of ADM or the FBI?  The main character is also very interesting and complex- do you think we should deal with him also?  Maybe relate his actions to business ethics and how the organization of ADM allowed for his actions to take place?

Sorry it is kind of hard to understand this blog unless you have read the book- I don’t want to give too much away on here though!    

Divide and rule – America’s plan for Baghdad and the role of integration April 11, 2007

Posted by Jordi in Military, Organizational Design.
2 comments

An editorial piece in the left-leaning Independent in the UK documents a new plan for security in Baghdad that will have at least 9 of the 30 districts walled off, gated, with US-Iraqi joint forces controlling security within and between them.  ID cards will be issued for each resident, and will be necessary to enter or leave.  One of the possibilities within these gated communities is organizational integration of military and civiilan activities.  The argument is based on a a reading of the new army Field Manual on counter-insurgency which:

  While not specifically advocating the “gated communities” campaign, one of its principles is the unification of civilian and military activities, citing “civil operations and revolutionary development support teams” in South Vietnam, assistance to Kurdish refugees in northern Iraq in 1991 and the “provincial reconstruction teams” in Afghanistan –

This is a cross-fuctional integration.  Why would it be a good design?  If the task needs of these units or teams require the sharing of tacit infomration, if they have to jointly solve problems with uncertain or unknown solutions, if innovation is a priority.  What are other reasons to pursue cross-functional structure?

Why would it be a poor design?  Will the effectiveness of both be compromised by being joined? The author suggests that it is not as similar organizational designs failed for the French in Algeria and the Americans in Vietnam.  I don’t know the specific history of these, but it is easy to see how the desire to be open and engage with people for civilian projects would be a t odds with the security and fighting concerns of the military.

There is a larger question, hard to divorce from our own domestic politics, of whether the larger gated community idea would work.  But, it represents a kind of differentiation of civilian authority and space.   Would this also decentralize decision-making for military adn police forces?  For various insurgent groups?


Extending beyond business April 2, 2007

Posted by Janine in Cases, Organizational Design.
1 comment so far

I apologize for the delay in this post.  I thought I had posted it but rather had only saved it.

 For my additional reading recently, I read an article about organizational structure and culture within an organization that is not exactly a business.  It relates to the radiology and the recent development of the Cat Scan machines. To sum up the article, the author talks about how the introduction of the CT machines created new structure within the department and also changed the dynamic between the radiologist who interprets the scans, and the technician who runs the machine.  It explains in lengthy detail specific scripts that occurred between radiologists and technicians, and how structure was affected based on knowledge of the new equipment, and the assumed heirarchy of power, radiologists over technicians. 

 The reason I found this article interesting was that it put our discussions of organizational structure into the context of organizations beyond business.  The concepts that we studied in class and from the book are at play here.  The dynamic between superior and subordinate, manager and employee, so to say.  The end result of this study showed how a more flat, decontralized structure within the radiology dept. allowed the CT radiologists and technicians to use each others as sources of information.  The radiologists were able to use the knowledge the technicians had of the machine and learn from them in some degree, and likewise, the technicians were able to approach the radiologists and learn from them.  Both ends must communicate ideas, knowledge, and resources in order to provide the best care to the patients.  There may be a new way of using the machine or programming the machine that the technician comes up with that could benefit the radiologist, i.e. getting a better, clearer scan.  In addition, the technician can learn something about interpretation of films from the radiologist.  Yet, for all this to be possible, easy flow of communication is necessary.  A relatively flat, decentralized structure is best suited.

 I thought this article was interesting because it put the topic of organizational structure and culture into a different sphere, that of health care.  Can you think of any other fields beside business where such topics are relevant?

Crowne Plaza March 21, 2007

Posted by collage9 in Customer Service, Organizational Design.
8 comments

This past Spring Break, I had the privilege of spending my time in Acapulco, Mexico.  Going to another country, it really is surprising to see how organizations operate.  One that was especially surprising to me was the hotel I stayed at, the Crowne Plaza.  It was shocking to me how poorly it was run even though I’m sure it was owned and operated by an American based company.  I was with a group of six people, and we all booked our trip together to make sure we stayed next to one another.  When we arrived at the hotel, we had something much different waiting for us.  The front lobby was chaos with people checking in and checking out, and it took us forever to make it to the front of the line.  When we finally did, we found that not only were we not next to one another in the hotel, they didn’t even have rooms for us when we got there.  Maybe I don’t understand the concept of making reservations, but I’m pretty sure it means you should have a room waiting for you upon your arrival.  When rooms were finally available, we found that one group would be staying on the fourth floor, and the other on the twenty-fourth floor.  To top it all off, when we arrived in our room it was a filthy mess with unmade beds and food and cigarette butts all over the floor.  What made matters worse thoughout the whole situation is that all of the workers are Mexican and can barely speak english.  Maybe this shouldn’t be surprising to me, but at a place where 99% of the visitors are english speaking you would think that at least some of the staff would speak decent english.  It’s not that the hotel itself wasn’t nice (don’t get me wrong we ended up having a great time), but it was amazing to me how poorly it was opeated.  I guess that just goes to show how much organizations vary from culture to culture.  Even if an organization is American based doesn’t mean it will operate with the same standards as we do, it will most likely relflect those of the country it is in. 

Mass collaboration March 7, 2007

Posted by Charley S in innovation, Internet, Organizational Design.
5 comments

http://www.businessweek.com/innovate/content/feb2007/id20070201_774736.htm

While cruising Business Week I encountered this article on how a struggling Gold Mine was able to completely turn its operation around through its utilization previously unused resources, the general public.  GoldCorp is a gold mining operation that is based in Canada.  The company owns over 50,000 acres of land for that is available for mining.  A few years back the company was in trouble.  It did not know where to actually dig for gold on the land it had, and the company itself did not have enough talented people and they were not being profitable.  GoldCorp decided on an extremely risky strategy; they organized a contest with over a half million dollars in prize money set aside, and released information on the land out over the Internet.  Soon, over 1,000 virtual gold diggers were involved, ranging from geologists and mathematicians to graduate students.  This program was extremely successful, resulting in the company going from a struggling $100 million dollar revenues, to solid $3 billion a year in revenues.  This program defies traditional logic which tells you that your competitors should be in the dark about your operations. 

GoldCorp’s successful mass collaboration program has several implications.  One, for small companies, such as GoldCorp, this type of program is a way to get access to technically knowledgeable people outside the company without having to pay for an employee.  For large companies, mass collaboration using the Internet is a way for consumers to provide innovative ideas and to help keep products fresh and in line with consumer tastes.  Many companies have started to use mass collaboration to help innovate their products.  The article cites GE and Boeing as leading the way, and if giant corporations such as these are doing it, I would say that many will follow.

 Right now the idea of mass collaboration is pretty new, mainly due to how fast technology is advancing.  In the future, it may be possible for companies to use mass collaboration as the primary way that it innovates products.  Wikipedia is a company that is totally driven by consumer posts, and if an encyclopedia can be written totally by individual contributors, what else is on the horizon?

The Bucknellian – A Student Organization February 28, 2007

Posted by Brian Mulligan in Networks, Organizational Culture, Organizational Design, Workplaces.
6 comments

I decided to take a look at the connections between the different editors at the student-run newspaper, The Bucknellian. I have had direct interactions with all the students on the Bucknellian editorial staff being a Sports Editor in charge of layout. The relationships between all of the students on the paper are very unique and actually fairly interesting.

At the top of the heap is the Editor-in-Chief. He has last say in anything before it heads out to print and is in charge of maintaining the quality of the layout and content in working with associate editors of content and layout. Additionally, he works hand-in-hand with the business arm of the paper that is charge of the ads and finances of the paper.

  1. Editor-in Chief
    1. Associate Editor of Layout
      1. Layout Editors
        1. Sports
        2. News
        3. Features
        4. Opinions
        5. Arts & Entertainment
    2. Associate Editor of Content
      1. Assigning Editors
        1. Sports
        2. News
        3. Features
        4. Opinions
        5. Arts & Entertainment
      2. Chief Copy Editor
        1. Assistant Chief Copy Editor
          1. Copy Editors
    3. Business Manager
      1. Office Managers
      2. Advertising Managers

The Business Manager overseas how ads are placed and seeks out new businesses to place ads in the paper. He overseas all the finances of the paper and where we can and can’t spend money. Underneath him are the office managers who help with the general upkeep of the office and records and the advertising managers who design and size the ads.

The Associate Editor of Layout is the specialist in layout. She has final approval and is the most trained out of all the layout editors. Additionally, she is the resource if you’re in a bind for layout as well. Underneath her are all the section layout editors and section assistant layout editors.

The Associate Editor of Content is responsible for what is written in the paper. He has the last say on what can and can’t be said in the paper and can make changes accordingly. Below him are two different divisions. The assigning editors are responsible for assigning articles to the writers and assist in titles and captions for layout are under the Associate Editor of Content.  Also, the copy editors are below him as well and they correct all the mistakes in the article before publishing.

That’s basically the make-up of the paper’s hierarchy for layout and content.

There are also many connections between the different positions in the paper.  The Editor-in-chief has to work closely with the Chief Copy Editor and the two associate editor to coordinate a smooth paper production.  Also the different layout editors work together to squeeze in article by swapping ads or even pages, so the paper has all of the white space covered.

Another layer to this organization is who gets paid or not?  The business branch are all paid along with the copy editors.  Everybody else is unpaid.  Do think that this makes sense?  Should some of the people who invest more time get paid for their hard-work?

A Customer Service Champ February 26, 2007

Posted by Kira in Customer Service, Networks, Organizational Culture, Organizational Design.
1 comment so far

Just after I read Elaine’s post on Jet Blue, I found an article on Southwest’s customer service.  In December, Bob Emig, a frequent Southwest customer, ended up waiting on the runway for 5 hours after the scheduled departure time due to the plane having to be de-iced twice.  This seems like it would be another customer service disaster like Jet Blue, but as it turns out it was the exact opposite of a disaster.  While stuck on the runway, the pilot walked the aisles answering questions and offering updates while the flight attendants kept passengers updated on new connecting flights.  Within a few days of the incident, Southwest sent a letter with two free round-trip ticket vouchers.

This was not unusual customer service for Southwest nor just a rush to fix the dilemma.  “Rather, it was standard procedure for Southwest Airlines, which almost six years ago created a new high-level job that oversees all proactive customer communications with customers.”  It is Fred Taylor’s job at Southwest to coordinate information that is sent to all frontline representatives in the event of a major flight disruption.   He also sends out letters and flight vouchers to customers caught in storms, air traffic, and other travel messes whether or not the situation was in Southwest’s control.  According to Taylor, “it’s not something we had to do.  It’s just something we feel our customers deserve.”  For Southwest, customer service goes beyond the employees directly in contact with customers; “it takes coordination from the top, bringing together people, management, technology, and processes to put customers’ needs first.”

I think this is a great example of providing customer service unlike Jet Blue’s recent blooper.  When travelers are in situations that shake their nerves, they want to know that they will be taken care of.  I think that customer service is one of the best and few ways that a company can truly differentiate itself and remain competitive in today’s business world.  Southwest has recognized that customer service is not just a quick fix apology, but is embedded in their structure and culture starting from the top of the organization.  As I learned in marketing, there are many points of customer service and contact that need to be monitored.   Southwest is very wise to have someone in a high-level position to oversee and coordinate all the points of customer service/contact throughout the organization.  I am curious as to how exactly Taylor goes about getting the company to coordinate in order to put customers’ needs first.  What kind of structure does the company have?  Do they use networks to increase the flow of information?  If so, what kind of network do they have in place?

 

Kaizen: Continuous Improvement Strategy February 13, 2007

Posted by K.C. in Organizational Design, Technology.
2 comments

Businesses and top management executives are always looking to stay informed about the latest management techniques and many of these strategies come from Japanese manufacturing companies. Some common management styles include just-in-time inventory and total quality management.

 Kaizen is a technique that has recently become more popular and esentially means that business should at all times explore new things and continuously improve by using “controlled experimentation and then painstaking adoption of the new procedures”. Initially, Kaizen was developed by the Japanese for manufacturing but has since been adopted by companies such as Amazon and other web based companies. Manufacturing companies would use this strategy by experimenting to determine whether a new process resulted in improvements or cost savings.

 However, not every company is able to use this type of strategy because it is difficult to create a controlled experiment for a new product. For example, web based companies can easily change a web page on their site and determine whether the new design attracted new customers without much cost. For companies that sell a product such as Microsoft or Apple, tracking results of a new product or design is more difficult as it is hard to quickly record user feedback. The reason that web based company’s benefit the most is because of the vast amount of daily users that view their sites and the constant evolution of technology.

The Military and Design Changes February 13, 2007

Posted by Charley S in Military, Organizational Design.
2 comments

While reading through chapter 6, I came to realize that the Army is a great example of a very large organization completely changing from a functional design to more of a matrix structure. I will elaborate. Back in the day, meaning more than a decade ago, the Army was organized primarily in a functional system. There are about 16 different functions that the military is broken up into, including everything from Infantry, Armor, Aviation, Finance, and the Judge Advocate General. For simplicities sake, lets say that on each military base there was 1 regiment of each function. Everyday when you went to work you would go and report to your regiment and work around people that all do the same things as you. So if you were Infantry you would go report to an Infantry boss, if you were in Finance you would go and report to the Finance boss.

Today what is happening is quite different. The Army is organized around Brigade Combat Teams. What these teams do is to integrate all of the different regiments (or functions) into 1 unified chain of command. So now when you go to work as an Engineer for example, instead of working alongside all of your Engineer buds, you go and work with Infantry guys and every other type of person in the Army. The reasoning behind this kind of arrangement is that since when you are deployed to combat you have to work together anyway, you might as well get used to working together now. Now there are positive and negative aspects of this. Some positive aspects that result are that yes, people are more familiar with each other and inter-branch rivalries are more subdued. The negative aspects however are that some technical expertise goes down the drain. While in the previous system you were around similar people who did your job and you could learn from them and figure out the best ways to do stuff together, now each individual is more or less isolated from those people and learning is stifled.

The entire military, not just the Army, is also moving towards a more integrated system as a whole. Current Army doctrine is what is called Joint Doctrine. It emphasizes that all the different branches (including Air Force, Marines, Army) must work together to solve problems. What this is starting is a reintegration of all the different branches of the military back under 1 office. I havn’t heard anything official, but people I talk to in the military all have the feeling that within 1 or 2 decades the entire military will be reintegrated.