Pass the Admission Tests Graduate Management Admission Test GMAT Questions and answers with ExamsMirror

Managerial work is undergoing enormous and rapid change. With little precedent to guide them, managers are coping with the fading away of hierarchy and the blurring of clear distinctions of title, task, department, even corporation. Traditional sources of power are being eroded as levels of complexity and interdependence increase.

Competitive pressures from recent business downturns are forcing corporations to adopt flexible strategies and structures, including reductions In management staff and increased use of performance-based (rather than longevity-based) rewards. In a more profound change, in a growing number of companies horizontal ties between peers are replacing vertical ties as channels of activity and communication. Companies are asking departmental staff to play a more strategic role, with greater cross-departmental collaboration. Some organizations are forming strategic alliances with customers and outside suppliers that bring external relationships inside, where they can influence company policy.

Fundamentally, the new managerial work involves new ways of obtaining and using power. Position, title, and authority are no longer adequate tools when managers have to work cooperatively with other departments and even other companies. The ability of managers to get things done depends more on the number of networks in which they are included than on their rank in a hierarchy. In the past, formal structures and the emphasis on rank were more limiting. For example, access to information and the ability to get informal backing were often confined to the few officially sanctioned contact points between departments or between the company and Its suppliers or customers. Today, official barriers between departments and between companies are disappearing while Informal networks grow in importance. The new corporation has many more channels for action, strategic pathways that ignore the chain of command.

These strategic pathways also serve to diffuse power. As the number of ways to combine resources Increases, the ability to command diminishes. Alternative paths of communication and resource access erode the authority of those in the nominal chain of command. In other words, greater speed and flexibility undermine hierarchy. As more and more of the strategic action takes place in these informal networks, the Jobs that focus inward on particular departments decline In power.

Organizations that produce similar goods tend to concentrate in the same geographic area (geographic concentration of production). Economic explanations of such industrial agglomeration explicitly emphasize better performance, and implicitly emphasize lower failure rates, as the key processes contributing to this geographic concentration. Sometimes Industries benefit economically from situating themselves in particular locations that offer intrinsic advantages such as access to scarce raw materials or proximity to consumers. In other cases, regardless of the particular location, the colocation of structurally equivalent organizations—those that operate in the same markets—may itself yield advantages such as common labor markets and knowledge spillovers.

Sorenson and Audia point out that these explanations Ignore the fact that structurally equivalent organizations also compete with one another for vital resources, and colocation would be expected to increase such competition. Organizational ecology studies support this expectation by showing that organizations apparently compete more intensely within local population boundaries.

Sorenson and Audia propose instead that what maintains geographic concentration is entrepreneurial opportunity, which leads to higher founding rates. Dense local concentrations of structurally equivalent organizations increase the pool of potential entrepreneurs in a region. Beginning entrepreneurs need exposure to existing organizations in the industry to acquire knowledge of the business, ties to scarce resources, and self-confidence. The existing geographic concentration of production constrains access to these resources, so that new founding’s tend to reinforce geographic concentration.