APPENDIX 1 MEASURES OF INDICATORS ORGANIZATIONAL EFFECTIVENESS
1. MEASURES OF STRUCTURE
The questions that were asked during the interviews were principally open questions with regard to the development of the characteristics of the relevant variables of organizational effectiveness. Descriptions and definitions of these characteristics were partially adapted from the Miller and Friesen (1983) study, a recent theory developed by Nieuwenhuis (2006), and the model developed by Chandler, Hanks, Jansen and Watson (1994).
Basis of organization
Which type of organic structure is the basis of the organization?
- Simple structure
The founder of the company is assisted by individuals with varying responsibilities.
- Functional structure
Individual departments or functions according to specific knowledge and skills. (F-format) - Divisional structure
Specific groups for similar products, markets, or geographic regions.
(P-,M-, or G-format) - Matrix structure
A combination of the vertical functional structure with the horizontal structure. Normal work can be found in the regular sections and specific projects are done by project groups across departments.
Formalization
The degree of formalization is the extent to which roles are independent of specific personal attributes of individuals occupying the roles. Formalization tries to standardize and regulate behaviour and consists of the following sub variables.
- Differentiation
Dividing of activities or tasks, responsibilities and authority in separate activities, like preparation, implementation, support and control. Differentiation can be vertical (adding another management level) or horizontal (job enrichment and job enlargement).
- Delegation of Operating Authority
The amount of authority transferred to lower and middle levels of management for administration of the day-to-day operation of the business. Operating decisions involve equipment replacement, production planning, adjusting prices of goods, inventory purchases, hiring of personnel, etc.
- Decision-making structure
Distribution of power for making strategic decisions regarding acquisitions, diversification, major new product introductions, long term goals etc.
Centralization is high if the top executives alone make most of the decisions with a minimum of consultation, low, if decision-making is more decentralized.
- Coordination or Institutionalized governance
Directing activities towards achieving the organizational goals. Coordination is high when policies, methods and procedures guide organizational activities.
Specialization
The division of labour is the specialisation of cooperative labour in specific, circumscribed tasks and roles, intended to increase efficiency of output.
- Technocratization
The number of highly trained staff specialists and professionally qualified people (accountants, engineers, scientists, marketers, lawyers, etc.) in the organization.
- Organic specialization
The number of employees of different functional areas, specialized in a certain product, market or geographical region (P-, M-, or G-format).
Centralization
Who is the last person whose permission must be obtained before legitimate actions may be taken on strategic, tactical or operational level?
Delegation is the process that a task has been articulated and systematized to someone else.
Decentralization is more than delegation, it includes the transfer of discretionary powers.
2. MEASURES OF STYLE
Definitions of the characteristics of the variable management style were adapted from a theory developed by Goleman, D., Boyatzis, R., and McKee, A. (2002).
Authoritative or visionary style
Builds resonance by moving people towards shared dreams.
Coaching style
Builds resonance by connecting what a person wants with the organization’s goals.
Affiliative style
Builds resonance by connecting people to each other.
Democratic style
Builds resonance by valuing people’s input and commitment through participation.
Pacesetting style
Builds resonance by meeting challenging and exciting goals.
Coercive or commanding style
Builds resonance by giving clear direction in an emergency.
3. MEASURES OF SYSTEMS
Definitions of the characteristics of the variable systems, also referred to as MAS in this study, were adapted from a theory developed by Moores and Yuen (2001).
Selection of information
Reliance on
1. Monthly profit and loss statement 2. Monthly balance sheet
3. Cash-flow statements 4. Cost accounting
5. Authoritative budgetary control 6. Participative budgetary control 7. Capital budgeting
8. Long-term planning and forecasts 9. Responsibility accounting 10. Quality controls
11. Environmental scanning
12. Financial information for performance evaluation 13. Long-term criteria for performance evaluation
Presentation of information
Scope
1. Internal 2. External 3. Financial 4. Non-financial 5. Historic 6. Future
APPENDIX 2 PROCESS STRUCTURE Figure 1: The working of a process structure
Figure 2: Integration of organizational structure and process structure
Figure 2: Integration of organizational structure and process structure
APPENDIX 3 LITERATURE RESEARCH STRUCTURE AND STYLE DURING GROWTH AND MATURITY
1. THEORY BY ADIZES (2004)
THEORIES FROM LITERATURE
Variables Who and
when?
Current situation Growth phase
Demanded situation Maturity phase
STRUCTURE Adizes
(2004)
Go-Go stage Adolescence Prime
1. Basis of organization
Functional Moderatly divisionalized
Divisionalized 2. Formalization
a. Differentiation Some
differentiation
Moderate degree of differentiation
High degree of differentiation b. Delegation of
operating authority
Low Moderate High
c. Decision making structure
Directive by top management
More professional by higher management
Integrative and participative d. Coordination or
institutionalized governance
Direct
supervision by founder
Rules and procedures Integrative system and team approach towards management
3. Specialization Low Moderate High
4. Centralization Centralized Moderately
Centralized
Decentralized
2. THEORY BY CHANDLER, HANKS, JANSEN AND WATSON (1993) THEORIES FROM LITERATURE
Variables Who and when? Current situation
Growth phase
Demanded situation Maturity phase STRUCTURE Chandler, Hanks, Jansen and
Watson (1994)
Expansion Consolidation
1. Basis of organization
Departmentalized, Functional
Departmentalized, Functional 2. Formalization
a. Differentiation b. Delegation of operating authority
Limited delegation Sufficient delegation c. Decision making
structure
d. Coordination or institutionalized governance
Formal systems begin to emerge, but enforcement is lax
Formal, bureaucratic;
planning and control is enforced
3. Specialization
4. Centralization Centralized Moderately centralized
MANAGEMENT STYLE
Adizes (2004) (Go-Go and
Adolescence)
Degree of importance Prime 1. Management Style
a. Authorative Entrepreneurial X Equal X
b. Coaching Integrative Increase X
c. Affiliative Integrative Increase X
d. Democratic Administrative (bureaucrat) X Decrease
e. Pace setting Productive X Decrease
f. Coercive Productive X Decrease
3. THEORY BY MOORES AND YUEN (2001)
THEORIES FROM LITERATURE
Variables Who and when? Current situation
Growth phase
Demanded situation Maturity phase
STRUCTURE Moores and Yuen (2001) Growth Maturity
1. Basis of organization 2. Formalization
a. Differentiation Moderate degree of
differentiation
Moderate degree of differentiation b. Delegation of
operating authority
Limited delegation Sufficient delegation c. Decision making
structure
Integrative Hierarchical d. Coordination or
institutionalized governance
Differentiated Moderately differentiated
3. Specialization Specialized Moderately specialized
4. Centralization Centralized Moderately decentralized
MANAGEMENT STYLE
Moores and Yuen (2001) Growth Degree of importance Maturity 1. Management Style
a. Authorative High Decrease Medium
b. Coaching
c. Affiliative High Decrease Medium
d. Democratic High Decrease Medium
e. Pace setting High Decrease Medium
f. Coercive High Decrease Medium
4. THEORY BY SMITH. MITCHELL AND SUMMER (1985) THEORIES FROM LITERATURE
Variables Who and when? Current situation
Growth phase
Demanded situation Maturity phase STRUCTURE Smith, Mitchell and Summer
(1985)
High Growth Maturity
1. Basis of organization
Functional/simple Divisional/more complex 2. Formalization
a. Differentiation Developing High degree of
differentiation b. Delegation of
operating authority
Limited delegation Moderate/High delegation c. Decision making
structure
Professional management makes decisions with analytical tools
Professional management makes decisions through bargaining
d. Coordination or institutionalized governance
Moderately formal Budgets
Highly formal Rules and regulations
3. Specialization Top level management:
specialists
Top level management:
Strategists, planners
4. Centralization Centralized Decentralized
5. THEORY BY MILLER AND FRIESEN (1983, 1984)
THEORIES FROM LITERATURE
Variables Who and when? Current situation
Growth phase
Demanded situation Maturity phase
STRUCTURE Miller and Friesen (1984) Growth Maturity
1. Basis of organization
Some formalization of structure
Functional
Formal bureaucratic structure
Functional (more complex) 2. Formalization
a. Differentiation Moderate differentiation Moderate differentiation b. Delegation of
operating authority
Low Low/Moderate
c. Decision making structure
Initial development of less centralized
decision-making system
Further development of less centralized decision- making system
d. Coordination or institutionalized governance
Initial development of formal information processing
Initial development of formal information processing
3. Specialization Few staff support
functions
Low specialisation
Increasing number of staff support functions
Moderate specialisation
4. Centralization Somewhat less
centralized
Moderate centralization
