Video Transcript: Lecture 10

Hello. So here we go. We are on executing organizational design. Think about  when we think about strategy, we have to think about how we're going to create  our organization. What makes the most sense? We're going to get into terms  like matrix organization. We're going to talk about horizontal integration. We're  going to talk about things like that. So these are kind of complex terms, because you can structure organization, you know, multiple ways. And I see my  organization structured hierarchical. I've seen it tried to be structured flat. I've  tried to see it structured as a matrix, I try to see it structured horizontally. There's all these different ways to structure an organization. So the thing I want to  emphasize is that organizational structure is that the way that an organization  formally arranges their units, and the relationship between these units. And  reason to do this is it helps with power and authority, and it helps create, it helps  create the structure that is needed so organizational design also will typically  looks could look quite a quite, quite complex. But here is an example of what an  org chart looks like. I'm sure you have seen or charts in your own in your own  organization as well. But here is an example of one where they try to get a bit  this one is GE they're trying to cram a lot into into a small little space. So that's  one example of an organizational design. But remember that when you're  building an organization structure that the division of labor is very important. So  in my organization, the division of labor is divided amongst the the brain trust,  the workers. They're the people who are executing most of the work, and they're organized under three and I'm talking about my division specifically. They're  organized under three different department heads, and then there is two  leadership positions above that organizational chart we just looked at, that is  going to show you what it looks like. There's informal link with linkages which  complex adaptive leadership theory focuses on, these informal network and  these informal linkages, which is basically the relationships that are not part of  the org chart, but but appear that allow for better collaboration. So you will see  this where people go outside the formal structure to get things done. You know, I certainly have my informal linkages with different other areas. So when I want to  get stuff done, I go and get support from those different areas, and then we  provide a united front up through the formal channel to accomplish things  vertical linkages. They're the ones that tie the supervisors subordinates together. So I told you my division specifically, we have the subordinates are tied through  three supervisors, and that's the Linus responsibility. So my boss delegates  responsibility both to myself and then to those three different areas, those two  three different people, who then have positional authority and authority over  everybody else, and they help oversee their activities and kind of see what's  going on. Formal relationships between equals in an organization, you'll see  these this as committees and task force. Certainly you'll see those in my  organization, my boss is a member of 13 individuals who form a larger group,  and they don't get together as much as they should, certainly, in my opinion, but 

they can get together, and they can come together on committees and other  things, and again, Then drive initiatives up through the formal organization.  Sometimes there is a unity of command issue, and as we start to talk about  some of the different organizational structures, you will see how this can  become difficult and quite convoluted, because if you have too many bosses,  they tell you what to do. Then that causes problem again. There's a famous  movie. I won't get into the movie, but there is a movie where one of the guys is  commenting, and he says, Well, I tell you what, Bob, I have four different  bosses. And Bob goes four he goes, Yeah, so if I don't get this in, then at four  different, people telling me that I messed up, that I did something wrong, and so  certainly unity of command is important. So we're not going to go through each  of these, the division of labor and those kind of things, because I think you you  understand them pretty well, and I think the book does a good job with it, but I  do want to talk about, I've talked about different types of organizations, and I do  want to go through boundaryless matrix, multi, divisional and functional. So, you  know, as I said, there's certainly a lot of differences between organizational  structures, but here are four of them, functional structure, and that's people who  are divided in departments. You have seen those, probably you see those a lot.  And those are kind of those formal structures. And then you have different  areas, marketing, production, human resources, and those multi divisional is  based on product areas. So you can see General Electric does it by energy  capital home. I would I haven't looked at Apple's, but I would imagine Apple kind  of has a multi divisional structure as well. Matrix structure is a hybrid where, that is, you manage, kind of by both, and you go and you go to different teams. I will  tell you that my division was organized under a matrix structure at one point,  and it did not work for us, because we ran into those, as I just gave that movie  quote, we ran into those three or four or five different box type situations where  there were very strong ownership bonds, and it did not work as well as We had  hoped. And then there is the boundaryless organization, which is flat. And you  see this with very small teams generally. You also see this in certain industries,  but those are flat. So I know of a team that is boundaryless, that's very flat.  Somebody has to title of CEO. Somebody has to title a CRO but they kind of  work together, and they kind of say that anybody who has an idea, you run with  it, you go with it, you go and you execute. And you don't have to worry about  getting approval or going through the formal authority process. That's pretty  that's pretty great. That's kind of a cool way to operate. Oh yeah, this is, this is a  good example of, forgot this for dinner. I would have shown it. This a good  example in the book. It uses funny TV show as an example, but, but this is a  functional structure. That's an example of a functional structure where you have  accounting, human resources, quality, sales, warehouse, customer service, etc,  all right. Matrix structure. Here would be an example of a matrix structure. Again, this kind of structure is a little confusing. You can see here across three different 

areas. Product one has a business analyst, a developer, a tester. Then product  two has the same and then you report to a couple different managers, because  you have your product manager, and then you have your, if you're a developer,  you have your development manager as well. And that can cause a little bit of  

confusion sometimes, but that is an example of a matrix structure and what that  looks like. Let's keep going. Sometimes you will see that in hospitals as well. So  there it is. I know I want to read that quick boundary list organizations, as I  talked about, those are kind of cool that is where there isn't really one person  that is has formal authority, but kind of everybody on the team kind of puts the  works together and works across boundaries to get things done. Certainly there  has to be a little bit of formality there, but generally you just kind of work and get  what's done, and you structured your work based on skill set. So you'll see that  with a lot of small startups, really. You know, certainly when you start a business, you have to push the broom, answer the calls, meet with investors, you kind of  have to do it all. And that's the idea behind a boundary list organization. You  don't really have a formal structure, a formal reporting structure, just everybody  kind of works together. Those work really well, as I said, in certain industries like  IT, but it also you're commonly going to see that with startups as well. So when  you start creating organizational structures, you have controls which are the  results of the organization. You know, you want to measure those controls. So  you want to see how many people like this company that I'm talking about right  now, they are. I'm going to bring it up. They are trying to raise their social media  profile. They just started as a new app. So for the past week, they have been  focusing on their on their social media campaign and and how many followers  they have. So they are up to, I can figure it out how to look that up. So they  started with a hundred followers a week ago. They are up to 316 and they're  continuing to try to raise that so that's one output control. That's one metric that  they are trying to control. So that's a way to track whether people are meeting  performance expectations. So an example of that would be, let's say the person  who is running that social media campaign is supposed to gain 10,000 followers, and have you know, 1500 impressions in a month, and they fail to meet that?  Well, that's a performance metric that is set in place that they're not meeting. So  that is output control. So you can see output control example in the book uses  real estate, which I think is a good one. And you can see here, grade point  averages is certainly one in a business school. You must have research focus.  You must produce a certain number of articles. Certainly, if we go back to  Michael Porter's list of articles, certainly he would be a measuring stick there.  There's also behavioral controls, which is controlling how the rules and  procedures of an organization. So there's things like casual Fridays, there's  things there's some play like in my office. There was a period of time where it  was I there was an expectation around wearing ties. Certainly I could not come  in in shorts and flip flops to my to my place of business, unfortunately, because 

that's how I would dress every day. But, but I can't do that. So there's an  expectation around professional dress and kind of those things. So, so that's,  that's also one. There's also clan control, which is the traditions, the  expectations, this is your cultural stuff, the values, that kind of things. So, you  know, there's like certain universities in the in the book. I'm trying to decide  whether I want to discuss these, but they're in the book, so I guess I can like and Brandeis University. One quarter of the student body wears paint at a liquid latex event and nothing else. So that's certainly an example of cultural values and  things like that. And then, and then, you know, certainly, when you have  organizational structures and you're trying to place those controls. There's going to be things that that come out, and fads and certain things that people are  going to follow, trends that that are popular, like, for example, some might say a  trend in Christian businesses is the concept of servant leadership, and how  important servant leadership is, so that that would be an example of something  when you're talking about organizational structure under which values do you  want to be known for and do you want to align with, and then does your  organizational structure work on those alignments as well? I. So that is some of  the, some of the about organizational systems. But one thing I want to hammer  home is, no matter how you organize, you need to organize to work toward  competitive advantage. You need to organize to work toward executing that  strategy. You need to organize in ways where you can track performance and do performance metrics so you understand where your business is, so you can  respond to those external and internal forces that are, that are on your business, and then certainly your strategy around your business strategy, your corporate  strategy, on other strategies moving forward. So this was a little bit of a shorter  lecture. So since we have some time, I just want to also talk about the fact that  you can set up your business in different ways. So one of the things when we're  talking about organizational controls, you have to think about what kind of  business you want to form as well, whether you want to form LLC, which is a  Limited Liability Company, certainly a corporation like Apple sole proprietorship,  which is one person or a partnership, or anything else. Sole proprietorship. You  know, if you think about it, the owner and the person are one in the same. So if  I'm a sole proprietorship and I get sued, then my business gets sued as well,  and they're tied together. There's not a limit between the wealth. So a lot of  people who forming the business, it's very small business, form it as an LLC,  which gives them limited liability and puts a liability on the company instead of  on the individual. Partnership. Is just what it means two or more people own the  firm. Like I said, An LLC is not personally liable. S Corp is for smaller  corporations, and then a corporation is you're familiar with that that is a larger  corporation is often seen that way. So I think this nifty little chart here kind of  shows why it's a good thing, especially if you're starting a business, to go with  sole proprietorship. And so going with sole proprietorship, limited liability 

company is probably the better way to go, because you will do a personal tax  firm return, but you'll have limited liability, and it's pretty easy to set one up. So  with that, we will conclude organizational controls. Next we're moving into ethics, and we'll talk about the ethics, and then we move into strategic leadership, and  kind of talk about that. We'll talk about some different leadership theories and  those kind of things. So as we do with every lecture, it is time to pray heavenly  father. Thank you so much for the class. Thank you so much for teaching us  about organization controls and kind of how that relates to strategy. Pray that as  students think about these concepts, think about implementing them that that  they will. Think about implementing them within their business structure, and  being able to apply them in there, but also with what they can do as part of their  kingdom for you Lord. So whether that's starting a business for you, or whether  that's, you know, advising nonprofits that are focused on you, which is another  form of business, but forming, talking to people and advising them about what  kind of Christian business to start. I pray that this information would be helpful to them and what kind of organizational structure to align with. So Lord, thank you  so much for the opportunity to come together. I pray that you will bless us, and  then as we move into ethics, that you will help us to look at ethics from a  Christian worldview as well in Jesus name. Amen. Thank you so much, and I will see you back here for lecture 11.