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Rachael Lohnes

MODULE 6 PAPER

This week’s module discussed structural capital. Structural capital can be defined as

“Formative properties that enable the binding of space-time in social systems” and “The

supportive infrastructure that enables the rest of an organization to function in a repeatable,

scalable way” (Castillo). Structural capital is something that is owned by an organization and

exists without the people. It is the processes, systems, knowledge, designs, ect (Castillo). The

types structural capital includes organizational capital, process capital, and rule of law.

Organizational capital determines the placement of power and authority. Various types

of structure include hierarchy, networks, spoke and hub, matrix, and platforms. They type of

structure that an organization chooses depends on various things. The geographic footprint,

age, size, and industry of a firm influence structure. Starbucks, for example, has a matrix

structure. In the store’s there is a store manager and sometimes an assistant store manager

(which is the store manager in training position). Under them, there are shift supervisors. These

are the people who run/oversee the day to day operations, they manage the baristas. The

baristas are trained by barista trainers to carry out the day to day tasks. At the Starbucks that I

work at, each shift supervisor is responsible for a barista trainer and a group of baristas. This

use of a matrix network makes it easier for our store to make sure everyone knows their roles

and is held accountable. It is a sort of internal partnership of the people in the organization.

Process capital is any activity or set of activities that uses resources to transform inputs

into outputs. Processes include activities, practices, and procedures that promote the delivery

of value creation and productivity (Castillo). This week’s lecture stated that “a process states
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what needs to be done and why, a procedure states how the process needs to be handled, and

a work instruction explains how to carry out the procedure.” (Castillo). Communicating, leading,

learning, planning, organizing, controlling, and staffing are all examples of different types of

processes. Looking the Starbucks matrix example, the matrix helps us enforce our process

capital. Having groups of baristas lead by a shift supervisor, we can keep track of learning. The

shift supervisor is responsible for making sure that everyone in their group knows how to make

new drinks, stays up to date with weekly policy training and news.

Measuring organizational capital and process capital is important. Measuring

organizational capital and process capital aids managers to track growth. By tracking growth

managers can see. their benchmark against past performances and rival firms, avoid risks such

as lack of safety, ethics, and compliance, determine ROI (return on interest) of resource

allocation, assess corporate valuation, assess joint ventures, mergers, and strategic alliances,

and to promote better decision making (Castillo). Organizational and process capital can flow

either vertically or horizontal. Process and organizational capital can be measured by looking at

input, output, key performance indicators, and management capabilities (Castillo).

The final key concept of this week’s lecture is rule of law. Rule of law is a mechanism,

process, institution, practice, or norm that supports the equality of all people before the law, so

that no one is above the law (Castillo). This is something that is put in place to keep things fair

and to hold everyone in an organization. There are nine dimensions in the rule of law. Those

dimensions include constraints on government power, fundamental rights, civil justice, absence

of corruption, order and security, criminal justice, open government, regulatory enforcement,

and informal justice (Castillo). Essentially the rule of law is based on principles, not on
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personalities or positions. In other words, the government is subject to their own laws. The rule

of law plays an important role when it comes to minimizing risk. Fraud, cronyism (building a

personal fiefdom with company resources), lethargy (focusing on excuses as opposed to

results), and mishandling risk in general (ex. too risk adverse or risk prone) (Castillo). The rule of

law matters because overall it improves decision making, performance, and equity throughout

an organization.

My experience taking the Learning Organization Survey was interesting. The results

were not exactly what I expected. I answered this survey very honestly, based on my store

manager’s leadership. My organization scored very low overall. Our learning environment

composite, learning processes composite, and leadership that reinforces learning all scored in

the bottom quartile. While Starbucks as a whole values thins like openness to new ideas,

appreciation of differences, information transfer, and so on, not every store manager values

those things. I have a very capable store manager but I believe that her lack of attention to

analysis, time for reflection, and information transfer hinders us as a team. I feel that by

improving time for reflection by my store manager letting everyone voice an opinion would

benefit our team. Personally I feel that she would realize that there is a breakdown in the

information transfer and her shift supervisors need to be in the communication loop so that

overall the team can grow.

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REFERENCES

Castillo, E. A. (2018, April 15). Structural Capital- Module 6 OGL 260. Retrieved October 6,

2018, from https://www.youtube.com/watch?

v=WYlrdh2gvzQ&feature=youtu.be