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Video Guide
Chapter One: Organizations and Organization Theory
Video Case Title: Innovative Management for a Changing World
Organizations Discussed: Camp Bow Wow
Video Case Synopsis
With more than 150 locations, Camp Bow Wow is one of the fastest growing franchise businesses in the United States. Founded little more than a decade ago by dog-lover Heidi Ganahl, the Colorado-based kennelhas earned a reputation as a fun, safeplace where pets canstay when owners are away.A few years ago, whenfranchiseeSue Ryan joined the Camp Bow Wow system, the Boulder, Colorado, businesswoman was able to manage most aspects of the camp on her own. But afterthe thrivingdoggie day care facility proved to be more work than she could handle, Ryan hired experienced staff members to help manage the camp and provide better customer service.
Video Case Discussion Questions and Suggested Answers
1.How does Camp Bow Wow, as an organization,benefit society?
Camp Bow Wow is a for-profit organization that brings together people and resources to deliver pet care services for on-the-go pet owners. By delivering services that people need, and by doing so at a profit, the organization creates value for consumers, employees, owners, and investors. Employees of Camp Bow Wow, by working collectively, accomplish goals far beyond the capacity of any individual. As unique social entities that are goal directed, structured, and linked to the external environment, for-profit and nonprofit organizations have an important place in the modern world.
2.Is Camp Bow Wow an example of an open or closed system?
Camp Bow Wow is an example of an open system. Unlike closed systems, which do not interact with outside entities, open systemsmaintain constant interaction with stakeholders, customers, suppliers, competitors, and government regulatorsin the environment to transform inputs into outputs.
3.Which of the five parts of an organization are featured in the video?
Organizations consist of top management, middle management, technical support staff, administrative support staff, and a technical core. The technical core at Camp Bow Wow is comprised of the camp counselors who care for pets and interact with customers daily. This core activity is directed and coordinated by management—namely, owner Sue Ryan (top management) and general manager Candace Stathis (middle management). The video case does not directly address or profile administrative or technical support staff.
4. Which activities at Camp Bow Wow require high efficiency? Which activities require high effectiveness?
Efficiency refers to the amount of resources used to achieve the organization’s goals. Effectiveness is a broader term, meaning the degree to which an organization achieves its goals. A high performance organization is one that achieves goals to the maximum extent possible (effectiveness) while making the best use of limited resources (efficiency). According to Candace Stathis, dog care tasks at Camp Bow Wow require high efficiency so that everything gets done on time and according to schedule. In contrast, customer service needs to be effective but not necessarily efficient, since overemphasis on efficiency could interfere with quality customer interactions. “Customer service has to be effective as opposed to efficient because it’s important for the owners to know that you care about their dogs,” Stathis said. “If you’re just trying to be efficient, then it’s not going to make them want to come back, and it’s not going to make them feel that you know them or their dog.” She points out that the hardest part of her job is trying to juggle the customer service side of Camp Bow Wow with the pet care side.
5. Based on what you saw in the video, describe various structural dimensions of the Camp Bow Wow organization.
Answers will vary. Regarding hierarchy of authority, owner Sue Ryan states that her kennel had a “flat structure” where nearly all employees reported directly to her. Ryan discusses the issue of specialization when she says that entry-level camp counselors had trouble performing a broad range of tasks (phones, customer service, pet care, and clerical work). Concerning centralization, owner Sue Ryan makes most decisions at Camp Bow Wow, yet she also delegates some authority to general manager Candace Stathis. As a doggie day care center, Camp Bow Wow is low in the dimension of professionalism. Formalization is not discussed, but the written rules for operating a local Camp Bow Wow kennel are largely created and maintained by corporate headquarters.
Chapter Two: Strategy, Organization Design, and Effectiveness
Video Case Title: Strategy Formulation and Execution
Organizations Discussed: Theo Chocolate
Video Case Synopsis
Seattle’s Theo Chocolate is one of the newest and most innovative companies to master the art of cacao cultivation. When Theo launched in 2006, the company offered a wildly exotic line of dark and milk chocolate bars and truffles. The treats had unusual names such as Coconut Curry, the 3400 Phinney Bar, and Bread & Chocolate. Bars were wrapped in artistic watercolor packaging with whimsical cover designs. Theo’s product quickly garnered accolades from critics and organic foods consumers alike. But when selling such creative confections to foodies and green consumers didn’t add up to high volume sales, founder Joe Whinney and his management team went back to the drawing board to find a more effective strategy.
Video Case Discussion Questions and Suggested Answers
1.Which of the three competitive strategies—differentiation, cost leadership, or focus—do you think is right for Theo Chocolate? Explain.
Answers will vary, but students should recognize that Theo uses its organic and fair trade expertise to differentiate itself from other chocolate makers and brands (differentiation strategy). In keeping with this strategy, Theo’s bars are more expensive than the traditional milk chocolate bars made by leading brands. As a small company that produces chocolate in small batches, Theo cannot offer better prices than those offered by large chocolate companies—so, a cost leadership strategy is not possible. And while the company seems well suited for a focus strategy—the company is a hit with green consumers in the Pacific Northwest—founder Joe Whinney says he is not satisfied with a narrow regional target market. The founder hopes to share his chocolate with mainstream chocolate consumers, both nationally and globally.
2. What flaw did Theo Chocolate CEO Joe Whinney discover in his company’s early strategy?
According to Joe Whinney and Debra Music, Theo’s early marketing strategy failed because it failed to align with the wants and demands of mainstream consumers. The company’s emphasis on organic and fair trade production methods had limited appeal with a small consumer niche.
3.Evaluate Theo’s new strategy in light of the company’s strengths, weaknesses, opportunities, and threats.
A SWOT analysis for Theo Chocolate begins by recognizing that Theo has a mission to be the most loved and most ethical chocolate company in the world. Internal strengths that help the company achieve its mission and strategic goals include the company’s expertise in chocolate making, knowledge of sustainable business practices, and control over its supply chain. As Joe Whinney and Debra Music discovered, the company’s initial exotic product line was too unusual for mainstream markets—a major weakness in the quest to become the world’s most loved chocolate company. As Whinney and Music scanned the external environment for opportunities, they noted that the mainstream chocolate market was lacking a traditional chocolate bar that could claim to have green benefits. This general analysis led Theo to try a new strategy: launch a product line that would appeal to mainstream chocolate bar customers yet offer unique environmental benefits. Threats in the external environment include the public’s fickle interest in green marketing, the dominance of mass-produced chocolate brands like Hershey and Mars, and the necessity of large sales in maintaining shelf space in grocery stores.
4. How would you expect Theo Chocolate’s strategy to affect the company’s organizational design?
Large chocolate manufacturers like Hershey’s, which produce chocolate bars in mass quantities to achieve low-cost (low-cost leadership), possess an efficiency orientation complete with strong central authority, tight cost controls, and highly efficient procurement. This design works well within stable market conditions. Theo Chocolate, however, produces its award winning chocolate in small batches using a “bean-to-bar” production method. Since Theo’s strategy is based on differentiation, the company’s design tends to be flexible and oriented towards learning and innovation.
Chapter Three: Fundamentals of Organization Structure
Video Case Title: Designing Adaptive Organizations
Organizations Discussed: Modern Shed
Video Case Synopsis
If anyone knows about structural designs that are sturdy, contemporary, and adaptive, it’s Seattle builder Ryan Smith, the founder of Modern Shed. Smith’s company builds space-saving modern dwellings for use as studio spaces, guesthouses, and more. Like his stylish sheds, Smith’s business is built to be adaptive, scalable, and suited to the needs of today’s challenging economic environment. Modern Shed has fewer than 20 full time employees, yet at times the company’s output rivals that of a large builder, due to collaboration with dozens of independent contractors. This small-yet-flexible organizational structure has helped Modern Shed thrive, even as larger companies struggle to survive the present economy.
Video Case Discussion Questions and Suggested Answers
1. Describe Modern Shed’s organization structure.
Modern Shed is best characterized as a modular structure. The Seattle shed builder has a core hub of just 12 to 14 employees (mostly designers and managers). These top managers outsource most aspects of business operations to outside specialists. The company’s manufacturing process involves close collaboration with dozens of outside vendors who specialize in the creation and delivery of components used in the sheds—everything from paneling and electric to hardware and transport. The members of this outside dealer network act as a virtual team; they coordinate through monthly conference calls, and they come together to build projects and product lines planned by Modern Shed’s Seattle office.
2. What are the advantages of Modern Shed’s organizational structure?
Two advantages of Modern Shed’s organizational structure include responsiveness to market needs and access to highly skilled personnel—without the high payroll costs. As an example of Modern Shed’sresponsiveness, Ryan Smith’s team designed and manufactured an entirely new product line of Modern Shed in response to a request from a national home-and-garden company. The new shed product was designed and ready for shipping within eight weeks.
3. What are disadvantages of Modern Shed’s organizational structure?
Disadvantages of Modern Shed’s organizational structure include a lack of control over outside supply chain partners, high task demands for managers, and uncertain loyalty from independent contractors
4. Which departmental group option does Ryan Smith describe when he says that typical business organizations have a group for answering phones, another group for accounting, and yet another group for manufacturing?
In the video, Ryan Smith describes a functional grouping structure when he says typical business organizations have a group for accounting people, a group for manufacturing people, and a group for people who answer phones. The functional grouping places employees together who perform similar functions or work processes or who bring similar knowledge and skills to bear.
Chapter Four: The External Environment
Video Case Title: Managing Human Resources
Organizations Discussed: Barcelona Restaurant Group
Video Case Synopsis
The restaurant business is in constant flux, with workers coming and going in a revolving-door fashion. This is true even of high-end concepts like Barcelona Restaurant Group, a collection of seven wine and tapas bars located in Connecticut and Georgia. To deliver Barcelona’s sophisticated dining experience, managersmust keep abreast of employment trendsand recruitskilled individuals who can run the establishment. To find individuals with the right attitudes and work ethic, Barcelona Chief Operating Officer Scott Lawton places weekly employment ads and guides job candidates through a multi-stage staffing process. According to the human resources executive, Barcelona’s staffing method has proven to be effective at attracting the best and weeding out the rest.
Video Case Discussion Questions and Suggested Answers
1.Identify the environment and sector that directly impact Scott Lawton’s job recruitment and selection activities.
Chief Operating Officer Scott Lawton is responsible for hiring decisions at Barcelona Restaurant Group, and his human resourcesefforts take place within the task environment—the component of an organization’s environment that interacts directly with the organization and affects its ability to accomplish goals on a daily basis. While the task environment includes many sectors, hiring and firing decisions are related to the human resources sector of the task environment.
2.How does environmental uncertainty affect Barcelona’s staffing needs?
Throughout the video, Barcelona’s Scott Lawton mentions the high level of uncertainty that human resources managers face in the restaurant industry.In particular, he notes that the restaurant labor market is transient, with employees coming and going in a revolving door fashion—mostly due to burnout and turnover. As a result, Barcelonamust properly manage its staffing needs to maintain good performance. Lawton says that effective management of uncertainty is critical to Barcelona's success.
3.What does Barcelona do to manage uncertainty in its labor market?
Barcelona manages uncertainty in its labor market by creating a Chief Operating Officer (COO) position to handle human resources issues full time. Although Barcelona is too small in size to have a human resources department, COO Scott Lawton acts as an H.R. director, managing the company’s labor and recruitment issues on a daily basis. Planning and forecasting, placing job ads, and conducting daily interviews are key activities Lawton uses to manage the high uncertainty of the restaurant industry labor market.
Chapter Five: Interorganizational Relationships
Video Case Title: Managing Social Responsibility
Organizations Discussed: Theo Chocolate
Video Case Synopsis
Motivated by a dual love of chocolate and the environment, Joe Whinney dreamed of building the first organic fair trade chocolate factory in the United States. In 1994, the Pennsylvania native pioneered the import of organic cocoa beans to the United States. In 2006, Whinney’s Theo Chocolate Company became the first and only sustainable chocolate maker in the nation. Unlike leading candy manufacturers that deliver sweets in high volume, Theo produces award-winning organic chocolate in small batches. In addition, the company boasts a bean-to-bar production method that uses cocoa beans grown without harm to farmers or the environment. To achieve its production and sustainability goals, Theo develops strong interorganizational relationships with growers and partners throughout its supply chain. The result is the efficient production of creamy, delectable milk chocolate bars that are good for both the ecosystem and the palate.
Video Case Discussion Questions and Suggested Answers
1.Who are some of the key members of Theo Chocolate’s organizational ecosystem?
Theo Chocolate coordinates with a range of supply chain partners to deliver its organic fair trade chocolate. These key partners include organic cocoa bean farmers, transport companies, food-ingredient suppliers, distributors, and retailers.
2. Why, according to Joe Whinney, is it desirable for Theo to control its manufacturing process all throughout its supply chain?
While discussing Theo’s organic manufacturing process, owner Joe Whinney states, “It was important to control the manufacturing from the bean to the finished product, and throughout the supply chain. If I could build a vertically integrated business, I had the best opportunity to affect every part of the business and really create lasting change.” Whinney’s business strategy includes social responsibility goals that cannot be met without cooperation from supply chain partners. In particular, Whinney aims to develop financial relationships that are as profitable for growers as for Theo. Instead of viewing outside firms as adversaries, Theo sees such firms as partners for collaborative networking.
3.Do you think relationships with supply chain partners are as important as relationships with customers? Why or why not?