Running Head: ROTHAERMEL EXERCISE 3
1
Rothaermel Exercise 3
Markie Love
Liberty University
BUSI 690–B04 LUO
Dr. Thomas Spotts
September 16, 2018
ROTHAERMEL EXERCISE 3
2
ROTHAERMEL EXERCISE 3
Chapter Eleven Rothaermel Text
Discussion Question 11.1. Rothaermel (2017) explains that “the important and
interdependent relationship between strategy and structure directly impacts a firm’s
performance” (p. 374). The alignment of strategy and structure helps a firm grow and affects the
relationship among the employees. When there is a clear strategy and direction for the future,
employees are more secure in their positions and have a sense of pride for the company they
work for (Al–Asmakh, 2017, p. 61). Whether using a simple, functional, multidivisional, or
matrix structure, companies must ensure that they focus on their goals. A simple structure allows
the owner to make all of the decisions and ensure that the employees and tasks are focused on
achieving the main goal (Quain, 2018, para. 3). Once the workload expands, and more
employees are required, a business will move to a functional structure. This structure allows for
an increase of specialization and productivity which allows employees to use their specialized
skills and complete tasks quickly which will help the company reach their goals faster (Davoren,
2018, para. 2–3). A functional structure can be used with a cost–leadership strategy, a
differentiation strategy, and a blue ocean strategy (Rothaermel, 2017, p. 376). The goal of cost–
leadership and differentiation strategies is to create a competitive advantage so that the company
can obtain more customers than other companies in the market (p. 376). A blue ocean strategy
combines the previous strategies to allow the firm to be “efficient and flexible” (p. 376). A
multidivisional structure takes the functional structure and divides it into a more diversified and
organized structure (pp. 377–378). This structure allows the company to use their skills and
expand into other markets or create new products. The final structure is the matrix structure
which combines the functional structure with the multidivisional structure (p. 381). This
ROTHAERMEL EXERCISE 3
3
structure helps a company move into an international market and function easier (p. 382). The
newest structure is holacracy which gives power to the employees allowing them to “self-
manage while staying aligned to the organization’s purpose” (Holacracy, n.d., para. 1). It is
purpose–driven, responsive, explicit rules, and transparency (para. 5–18). No matter what
structure a company chooses, it is essential that everyone in the organization understand and
work toward the overall goal. This ensures that the performance of the company is positively
impacted.
Discussion Question 11.2. Organizational culture is defined as “the collectively shared
values and norms of an organization’s members; a key building block of organizational design”
(Rothaermel, 2017, p. 384). When I worked at a Taekwondo studio, it was a blend of cultures,
but they made the company stand out. Artifacts are evident to outsiders and, for the studio, there
was a South Korean flag upon entrance, large mat in the center of the room in which classes
practiced on, and another flag on the wall above the mat (p. 384). Norms “define appropriate
employee attitudes and behaviors” (p. 384). We had to wear our uniforms at all times when we
were teaching and had to bow before stepping on or off the mat. The bowing was a sign of
respect for Korea, the creators of Taekwondo, and to our teachers. We had to address other adults
or teachers formally using Mr., Mrs., Miss, or Master depending on who we were talking to even
if they were younger than us. Values are what is important to the organization (p. 384). The
studio valued respect and discipline. By addressing others formally, we were teaching younger
students to respect anyone in a leadership position. Teaching discipline helps the students both at
home and school because they can have better listening skills, respect for adults, confidence, and
set goals to accomplish what they set their mind to. Socialization process is when “employees
internalize an organization’s values and norms through immersion in its day–to–day operations”
ROTHAERMEL EXERCISE 3
4
(p. 384). In order to work at the studio, everyone must take classes so that they understand the
values of the company. Then, depending on the position, a person must be trained accordingly. I
was going to be running the office, so I had to learn how to create contracts, how to answer the
phone, how to create a class roster, and be able to assist the Masters, parents, and students. I
shadowed the office manager for months before I was allowed to start running the office so she
could attend to other matters. I believe that this is an effective culture in creating a competitive
advantage. There were other martial arts studios in the area, but everyone in the studio had an
understanding of the American and Korean cultures and how they blended to create our
organizational culture. The environment was full of respect. We knew each child by name and
knew most parents by name. No one was ever treated as just another student or number. We
created an environment that was hard to replicate.
Chapter Twelve Rothaermel Text
Discussion Question 12.1. To prevent managers from pursuing their own interests at the
expense of stockholders and employees, managers have to make a conscious effort to put others
first. To ensure this happens, a company can establish and enforce a code of conduct that states
how managers are to act in the workplace and as a member of society (Rothaermel, 2017, pp.
415–418). If they fail to do so, the business should create consequences so that everyone in the
organization understands the importance of thinking of others rather than oneself. A company
can create a shared value creation framework which says that “managers have a dual focus on
shareholder value creation and value creation for society” (p. 405). This reminds the company
that the market they are in is controlled by economic and societal needs (p. 405). Michael Porter
suggests that managers should have the responsibility to expand the customer base to bring in
nonconsumers, include nontraditional partners, and focus on creating new regional clusters (p.
ROTHAERMEL EXERCISE 3
5
406). This allows managers to keep the focus off of themselves and doing what is necessary to
help others. Companies should routinely evaluate all of their employees and their overall
performance in the market. This will give the company the opportunity to see what areas need
improvement and see what employees should be rewarded with a promotion or a more
substantial stake in the company. A business cannot just help their community. The should help
their employees as well because when employees feel as if they have a secure position, they will
be more likely to work harder for the company. Businesses must determine how to create a
sustainable business and increase benefits for stakeholders without harming the company or the
community (Scott, 2012, para. 6). In doing so, the focus is taken off of the individual and placed
on the greater good for the company and the community.
Discussion Question 12.3. Porter and Kramer (2018) explain that “in recent years
business increasingly has been viewed as a major cause of social, environmental, and economic
problems” and “companies are widely perceived to be prospering at the expense of the broader
community” (Abstract). Many companies focus on gaining a profit instead of looking at how
they potentially harm communities by depleting natural resources. To change this, companies
must create a shared value that allows companies to not only help themselves but support the
community as well. For Nike, they need to study the market they are in or plan to enter. In
America, we have obesity issues. Nike could go into the schools and help promote physical
activities to keep children moving and instill in them the importance of a healthy and active
lifestyle. For adults, Nike can partner with other businesses and create an exercise room where
employees can take a break and get some exercise during the day. In developing countries such
as the Philippines, Kenya, Cuba, and Uganda, Nike could give a pair of shoes to someone in
need or discount a pair when a pair is purchased. This pair would not have to be what they sell
ROTHAERMEL EXERCISE 3
6
in stores, but they could be specially made so that the shoes can be adapted to the harsh
climates. By focusing on the economic and the social Nike wants to enter, they can discover
the needs of the community and create a plan to give back to communities who purchase their
products and to communities in need.
ROTHAERMEL EXERCISE 3
7
References
Al-Asmakh, S. (2017). The alignment of strategy and structure and its effect on financial
performance. International Journal of Commerce and Management Research,3(11), 54-
64. Retrieved September 12, 2018, from www.managejournal.com/download/602/3-11-
27-396.pdf.
Davoren, J. (2018, June 26). Functional structure organization strength & weakness. Retrieved
September 12, 2018, from https://smallbusiness.chron.com/functional-structure-
organization-strength-weakness-60111.html
Holacracy. (n.d.). What is Holacracy? Retrieved September 12, 2018, from
https://www.holacracy.org/what-is-holacracy
Porter, M. E., & Kramer, M. R. (2018). Creating shared value (G. Lenssen & N. Smith, Eds.)
[Abstract]. Managing Sustainable Business,327-350. doi:https://doi.org/10.1007/978-94-
024-1144-7_16
Quain, S. (2018, June 26). Simple organizational structure. Retrieved September 12, 2018, from
https://smallbusiness.chron.com/simple-organizational-structure-63451.html
Rothaermel, F. T. (2017). Strategic Management (3rd ed.). New York, NY: McGraw-Hill
Education.
Scott, R. (2012, September 14). The bottom line of corporate good. Retrieved August 30, 2018,
from https://www.forbes.com/sites/causeintegration/2012/09/14/the-bottom-line-of-
corporate-good/#434419813576
