Reading #3: Strategy & Structure Chandler

Written in 1962
Men, money, material
The enormous expansion of the American economy since world
war II has led to the rapid growth of a multitude of industrial
companies
Ex. Honda decentralizing company, to make more $ (cars, bikes,
lawn, generators)
Strategic growth will come from being aware if opportunities
using resources, expanding resources, be aware of environment,
adapt, and change strategy.
Companies that began decentralizing du pont, general motors,
jersey standard, and sears executives of these 4 began to
develop their new structure independently of each other any of
any other firm, there was NO imitation
Industrial Enterprise (defined) in a broad sense it means, a
large private profit oriented business firm involved in the
handling of goods in some or all of the successive industrial
processes from the procurement of the raw material to the sale
to the ultimate customers.
Administration Executives action and orders as well as the
decisions taken in coordinating, appraising, and planning the
work of the enterprise and in allocating its resources.
Administrator must be concerned with the long run health of his
company, and other times its smooth and efficient day to day
operations. 1st activity calls for long term planning and appraisal,
2nd calls for meeting immediate problems
Executive in modern decentralized company carry out
administrative activities from four different types of positions :
1.) General office; coordinate, appraise, and plan goals and
policies and allocate resources for a number of divisions makes
broad strategic/entrepreneurial decisions
2.) Central office; administers a number of departments, running
a major function (selling, purchasing, producing)
3.) Departmental headquarters; coordinates, appraises, and
plans for one function on a broad regional/national scale rather
than just locally
4.) Field Units; concerned with ONE function marketing,
manufacturing, engineering in one local area
Strategic Decisions concerned with long term health of the
enterprise
Tactical Decisions day to day activities necessary for efficient
and smooth operations

Entrepreneurial decisions/actions affects the allocation or

reallocation of resources for enterprise as a whole
Operating Decisions actions which are carried out by using the
resources already allocated
Strategic growth resulted from an awareness of opportunities
and needs created by changing population income and
technology
Growth without structural adjustment can lead only to economic
inefficiency

Reading #4: Organizational Culture and Leadership Schein

Organizational cultures are created by leaders
Culture- reserved for the deeper level of basic assumptions and
beliefs that are shared by members of an organization that
operate unconsciously learned responses to a groups problems
of survival in its external environment and its problems of
internal integration
Culture can only be found when there is a definable group with a
significant history
Within organizations we will find subunits that can be referred to
as groups that may develop group cultures
In Multi authority is much more respected and conflict tends to
be avoided
In Action conflict is values and the individual is expected to
take initiative and fight for ideas in every arena
Levels of Culture and Their Interaction
1.) Artifacts and Creations most visible, one can look physical
space, the technological output of the group, written/spoken
language, behavior patterns
2.) Values testable in the physical environment/only by social
consensus if solution worse and the group has a shared
perception of that success, the value gradually starts a process
of cognitive transformation group members will forget that they
did not agree as these values becomes beliefs
3.) Basic Assumptions relationship to environment, nature of
reality (time and space), nature of human activity, nature of
human relationships WHEN A SOLUTION TO A PROBLEM WORKS
REPEATEDLY IT COMES TO BE TAKEN FOR GRANTED
Unconscious assumptions sometimes lead to catch 22,
Ethnographer perspective obtains concrete data in order to
understand the culture he is interested in, for intellectual and
scientific reasons

Clinical perspective one where the group members are clients

who have their own interests as the prime motivator for the
involvement of the outsider often labeled consultant or therapist
Scheins data is based on a clinical one, he believes clients are
motivated to reveal certain things when they are paying for help
that may not come out if they are only willing to be studied.

Reading #5: Admin Behavior Simon

Decisions, who should make them
The actual physical task of carrying out an organizations
objective falls to the person at the lowest level ex. Cars are
made by the mechanic on the assembly line not the executive
Each decisions involves the selection of a goal, and a behavior
relevant to it
The relative element in achievement element of compromise
Administrative organization is characterized by specialization
particular tasks are delegated to particular parts of the
organization
Luther Gulick says work division is the foundation of
organization; in deed the reason for organization vertical
specialization division of decision making duties between
operative and supervisory personnel
Coordination, expertise, responsibility, authority, org loyalties
How the behavior of the operative employee can be influences (2
categories) #1 establishing in the operative employee himself
attitudes, habits, and a state of mind which lead him to reach
that decision which is advantageous to the org. (training
employee) #2 imposing on the operative employee decisions
reached elsewhere in the org
Training influences decisions from the inside out alternatives to
the exercise of author may teach approved solutions
Entrepreneur seeks profit, employee seeks wages, customers
find the exchange of money for products attractive =
organization objective is a personal objective of ALL of those
three groups (must find an equilibrium)
Reading #6: Leadership in Administration - Selznick
Leadership and what the difference between and organization vs.
and institution is
Organizations are not institutions
Institutionalization is a process something that happens to an
organization over time reflecting the organizations own
distinctive history

The degree of institutionalization depends on how much leeway

there is for personal and group interaction
Infuse with value beyond the technical requirements of the task
at hand
Organization nonsense system of consciously coordinated
activities (tool to do a job)
Institution natural product of social needs and pressures
(responsive, adaptive organism)
When studying an institution we pay attention to its history and
the way it has been influenced by the social environment
Relation of an organization to the external environment is one
source of institutional experience
Internal social world to consider human beings are tools that
needs self fulfillment
Organizations are expendable, and judged on engineering
premises
Institutions whether groups or practices, may be partly
engineered but have a natural dimension, less expendable
Institutional leader expert in the promotion and protection of
values

Reading#15 : The Nature of Managerial Work Mintzberg

Mintzberg believes that strategies emerge
The Classical School Plan, organize, staffing, directing,
coordinating, reporting, budgeting - Father of this school was
thought to be Henri Fayo - Decision making begins with problems
and goals and then the courses of actions and consequences are
laid out before the manager
The Great Man School reflected his belief that heroes shape
history through their personal attributes and divine inspiration /
men and women shape history rather than letting it shape us
Leader Power School Melville Dalton studied middle
managers, and concluded informal social forces of bureaucracy
tend to dominate individual action
Leader Behavior School the leader is the best informed of
the group, and that there is a hierarchy of leader authority
Reading #19: Good Managers Dont Make Policy Decisions
Wrapp

Wrapps opinion comes from his research working closely with

mangers in many different companies
If a manager knows he is being studied, this may produce
strange results

His definition of a good manager under competitive industry

conditions, he is able to move his organization significantly toward the
goals he has set
Management is not a profession (they integrate)
Wrapp explains what characteristics are common in successful
executives. The skills he outlines are simple and easily
implemented among management. Below are a list of the
followings skills that are found common characteristics in
successful executives:

Keeping Well Informed : Many get lost in the wealth of

details and insist on making to many decisions.

Focusing Time and Energy: A good manager knows how to

save energy and gives personal attention to problems and issues
that need direct assistance.

Playing the Power Game: A good manager knows he must

work through idea men in different parts of the organization.

Value of Sense of Timing: A good manager sets aside a

good time frame of completion and then outlines the way to best
us time.

The Aof Imprecision: A good manager commits himself

publically to a specific set of objectives.

Maintaining Viability: A good manager has a well-defined

set of objectives and a clear sense of direction.

Avoiding Policy Straitjackets: A good manager

understands the importance of specific and detailed statements
of social responsibility.

Muddling with a Purpose: A good manager sees

opportunities to discover parts that relate to the purpose.
Most of all a manager must be able to understand the vision but
know how to implement the vision to see the plan into fruition.
General manager tests proposals against 3 criteria:
1.) will total proposal move the organization toward the objectives
2.) Will the whole proposal be received by the various groups in the
org.
3.) How does this program relate to programs already in process?

Reading #20: The Core Competence of the Corporation

Prahalad & Hamel
-

Idea: The evolution of global management and the

emergence/imprortant of Competency minded management
What is core competency?
o a bundle of skills integrated to make a company unique.

o the engine for new business development, underlying

component of a companys competitive advantage.
o created from the coordination, integration and
harmonization of diverse skills and multiple streams of
technologies.
Rethinking the Corporation:
o Build product for customers need but have not yet even
imagined
o Requires radical change in the management of major
companies.
o Understand the changing basis for global leadership.
Case analysis:
o NEC:
Strategic architecture: to exploit the convergence of
computing and communicating(C & C).
Acquired competencies in semiconductors.
Used collaborative arrangements to multiply internal
resources.
Now a world leader in consumer electronics
o GTE
No strategic Architecture existed.
Decentralization made it difficult to focus on core
competence.
Senior managers worked as if they were managing
independent business unit.
No mutual decision was made.
Roots of Competitive Advantage
o Portfolio of companies versus portfolio of Business:
Canon(personal copiers), Honda(from bikes to four
wheelers).
Sony, Casio, Yamaha,Komatsu invented new devices.
o Consolidating corporate-wide technologies and
resources into competencies.
o In Short Run companies, its competitiveness derives
from price/performance attributes of current products.
o In Long Run companies, its competitiveness derives
from an ability to build at lower cost and more speedily
than competitors.
o Western companies stuck in old mentality.
o Diversified corporation is a large tree.
STUDY the roots of competitiveness
Identifying Core Competencies
o Accessibility: provide potential access to a variety of
markets

o Value-creation: make a significant contribution to

perceived customer benefits of the end product
o Uniqueness: Be difficult for competitors to imitate
o How to lose: A Core Competency is lost:
Through outsourcing/OEM-supply relationships =>
Example: Chrysler vs Honda
Through giving up opportunities to establish
competencies that are evolving in existing
businesses => Example: television business
The Tyranny of the SBU ( quyen chuyen che)

- The Tyranny of the SBU

o The ineffectiveness of SBU model:
Underinvestment in Developing Core Competencies
and Core Products
Imprisoned Resources
Bounded Innovation A shift in management is
inevitable.
=> A shift in management is inevitable.
- Developing Strategic Architecture
o Establish objectives for competence building
o A road map of the future that identifies which core
competencies to build and related technologies
o Create a managerial culture, team work, a capacity to
change, and a willingness to share resources, to protect
proprietary skills, and to think long term

Consistency of resource allocation, administrative

infrastructure
o Management duties :
To identify and commit to technical and production
linkages across SBUs that will provide a distinct
competitive advantage.
Top management: make resource allocation priority
decision.
Lower level of management: understand and
maintain consistency with top managements
decision and disciplines.
- Benefits of Strategic Architecture
o Reduce the investment needed to secure future market
leadership
Provide a logic for product and market diversification
Reduce R&D costs.
- Redeploying ( trien? Khai lai assign new task) to Exploit ( trien
khai-move) Competencies
o SBUs should bid for core competencies in the same way they
did for capital.
o How to exploit:
SBUs must defend why they need certain talents
SBUs must sacrifice short term in return for long term
benefits
Rotation
Task for management :create products customers need
but have not yet imagined
Top managers must assume responsibility for competitive
decline
NEC accumulated a lot of core competencies, used foreign
technology = quicker and cheaper, no need to develop
new ideas
GTEs decentralization made focusing on competencies
difficult
Missed strength of competencies by only looking at end
products
3 tests to identify core competencies in a company
1.)
Provides potential access to a wide variety of
markets
2.)
Should make a significant contribution to the
perceived customer benefits of the end product
3.)
Should be difficult for competitors to imitate
Reading #7: The Icarus Paradox Danny Miller
o

5th most cited management researcher

Supervised by Minzberg
American economist born in 1947
Article
Icarus Greatest asset led to his demise
Superior organization evolve into flawed purebreds
Result: strategies become less balanced, they center on a single
core strength, while other aspects are forgotten
Paths Of Decline
1.) Focusing : quality driven craftsmen into rigid, controlled,
detailed obsessed tinkerers (alienate customers with perfect
but irrelevant offerings)
2.) Venturing : converts growth driven entrepreneurial builders,
into impulsive, greedy imperialists (overtax resources)
3.) Inventing : takes pioneers with flexible operations, great
products, and transforms into utopian escapists, high tech
escapism (futuristic intentions distraction)
4.) Decoupling : transforms salesmen into aimless bureaucratic
drifters producing stale products and a large # of them

ITT example
Tried to achieve rapid growth by going after ambitious
acquisitions, loads of debt were issued to fund acquisitions,
in less than 10 years they bought 100 companies
Could not manage, detracted from divisional strategy
product lines of many units were neglected
Amplified winning strategy and forgot about everything
else
Configuration complex, evolving system of mutually
supported elements organized around a central theme
Momentum organizations keep extending their themes
and configurations until something earthshaking stops
them
Overconfident, satisfied executives extend the very factors
that contributed to success to the point where they cause
decline