11 Strategy And Structure

Front 1

Structural facets of organizations

Back 1

•Specialization
•Centralization
•Formalization

Front 2

Three Cs of Systems

Back 2

•Communication
•Coordination
•Control

Front 3

Key organization components

Back 3

•Core
the group or groups that are directly responsible for competitive advantages that the firm enjoys
•Techno structure
those groups who are advice givers and policy makers to the core
•Staff support
all other groups who are not core and not advice givers/policy makers

Front 4

Coordinating mechanisms

Back 4

•1) Mutual adjustment
•2) Standardization of work processes
•3) Standardization of work skills
•4) Standardization of work output
•5) Direct supervision

Front 5

Mutual adjustment

Back 5

•A method of coordination where every individual knows everything that is happening in the organization and adjusts his or her work pattern for the conditions at hand
•Seems to work best in the following situations
oWhere there is a small group of people
oWhere the tasks are either very well known such that everyone is cross-trained on all the jobs
oWhere the means to success is uncertain and a strong degree of innovation will be required

Front 6

Standardization of work processes

Back 6

•A method of managing large numbers of employees based upon the processes that they perform
•Requires a deep understanding of the work involved such that a supervisor can manage the processes rather than the employees
•Employees are seen as somewhat interchangeable

Front 7

Standardization of work skills

Back 7

•A method of managing large numbers of employees based upon their skill sets as established by some externally validated means
•Value of standardized skills includes a common nomenclature among the members, a common base knowledge set, and an understanding of the responsibilities expected by someone who holds that particular destination

Front 8

Standardization of work output

Back 8

•A method of managing large numbers of employees based upon a well-developed set of output measures that in combination provides insight into the performance of the employee

Front 9

Direct supervision
Requires that Work
1)
2)
3)

Back 9

•Every person is coordinated via a direct supervisor and coordination flows into and from that supervisor
•Necessary when standardization of work processes, skills, and outputs are also ineffective in achieving the kind of coordination that is necessary
•Requires that work
o1) Be done a certain way
o2) Be done by employees with specific skills sets
o3) Result in a highly predictable and consistent output
•When cost control is of paramount competitive concern

Front 10

Coordination and generic strategies
•Cost leadership, consistency of output, or significant control over aspects of the product or service production process

Back 10

oDirect supervision
oValues strict, discipline approach to the conduct of its business and discourages employees from acting independently

Front 11

Coordination and generic strategies
•Innovation and flexibility

Back 11

oDifferentiation approach
oCoordination
oEmployees are increasingly able to investigate new information they receive and respond to new ideas, making decisions on their own for the benefit of the company

Front 12

Types of organizational structure
1)
2)
3)
4)
5)

Back 12

•1) Simple
•2) functional
•3) Divisional or multidivisional
•4) Matrix
•5) Adhocracy

Front 13

Simple structure
•Usually best under
1)
2)
3)
4)

Back 13

•A method of organizing a company in which all the areas of the company report to a single person; the pure form of the simple structure is referred to as a flat organization
•Rapid response and leans heavily on the capability to the single head of the organization
•Little to filter information
•Coordination is straightforward
•Involves strong person-to-person managerial abilities
•Since the distance is short between operating managers and the location of decision making at the leadership level, this structure allows for rapid opportunity recognition and quick changes to adapt to the market conditions
•Limited by the capability of the person in charge as well as by the resource constraints of having to manage an increasing number of people and issues
•Usually best under
o 1) Single product organization
Relatively dynamic environment where reaction time is at a premium
Ability to make a quick decision to please a customer or react to changing conditions
Retail
o2) New organization
o3) One trying to maintain an entrepreneurial orientation
By flattening the organization, the company is able to rely on the entrepreneurial approach of the founder and his or her unique skills/insights
o4) Crisis organization

Front 14

Functional structure
•Usually best under
1)
2)
3)

Back 14

•A method of organizing a company that divides up the company based upon their functional areas of expertise
•Advantageous when applying various coordination methods, since functional groups can generally have their work coordinated with similar methods
•1) Growing business activity or volume
•2) Public or governmental organization
oNegative—communication
•3) Large, mass-production organization

Front 15

Divisional structure (multidivisional)

Back 15

•A method of organizing a company that divides up the organization into discrete companies (or semiautonomous division) within the overall company
•These division generally contain all the elements of an independent company
•Global strategy
oValue is created upstream in manufacturing and supply networks yet the divisional structure or organized geographically by region
•Capital is often more easily and more cheaply obtained through the internal corporate headquarters than through external financial markets
•As an individual profit center, each entity is constantly seeking to maximize its own division’s returns
•Communication is problematic as each division is directing efforts within its own dividions as opposed to pursuing goals of other divisions

Front 16

Matrix structure

Back 16

•A method of organizing a company that utilizes a dual structure such that everybody in the organization has both a functional home as well as a divisional home
•In theory, the matrix structure would provide a diversified organization with the best of both the functional and divisional forms
•Problems—resource allocation, reporting to two bosses

Front 17

Adhocracy
•Usually best under
1)
2)
3)

Back 17

•A method of organizing usually used within portions of the organization rather than the entire organization; there are no supervisors, and everyone in the group operates organically toward a well-defined goal
•1) When the means to task accomplishment is unknown, but the goal is well understood
•2) When the duration of the task is well defined
•3) when creativity is the most prized outcome