2 Strategy Org Design and Effectiveness Session 2
Transcript of 2 Strategy Org Design and Effectiveness Session 2
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Efficient performance versus Learningorganization
Strategy & Organization design
Organizational Purpose and Structural design
rgan za ona e ec veness a anceeffectiveness approach
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Changing Paradigm of Org Design
Vertical Structure
Rigid Culture
Competitive
Horizontal Structure
Adaptive Culture
Collaboration
Mechanical System Paradigm Natural System Paradigm
Formal systems
Routine tasks
Strategy
Shared information
Empowered roles
Turbulent Environment Learning OrganizationStable Environment Efficient Performance
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External Envr
Opportunities
Threats Resources Uncertainty
Internal Envr
Strengths Weaknesses
DistinctiveCompetence
Past Perf Leader style
TopMgt Team
Strategic Management
Define Mission, Goals Operational Goals and Strategy Selection
Org Design. Structure, Technology, Information & Control Systems,HR policies, Org Culture, Inter-organizational Linkage
Outcomes
Resources, Efficiency, Goal Attainment, Stakeholders, competing Values
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Operative goals Primary task a dept/ section / individual is to perform
Overall Performance
Net income
Volume Net sales or numbers
Profitability
Resources
Material
Finance
People
Market Goals Employee Development
Innovation & Change
Productivity
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Importance of Goals
Mission / Official Goals provide
Legitimacy
Operative Goals provide
Employee motivation and Direction
Decision Guidelines
Standards of Performance
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Low CostRelationship
Differentiation
Broad
UniquenessLow Cost
Competitive Advantage
Spectra Interventions
r eccan
Mocha, Barista
Focused
Low CostRelationshipCall a Cool Cab
Focused
DifferentiationPalace of Wheel
Amby Valley
CompetitiveScope
Narrow
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Porters Competitive Strategies
Differentiation
Learningorientation acts in a flexible loosely knit way with stronghorizontal coordination
Strong capability in research
Values and builds mechanism for customer intimacy
Rewards em lo ee creativit , risk takin and innovation
Low cost Leadership
Strong central authority
Efficiency orientation
Detailed control reporting, SOPs
Highly efficient SCM Logistics
Close supervision routine tasks and limited employee involvement
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Prospector: Learning Orientation Flexible Fluid decentralizedstructure, Strong capability in research
Defender: efficiency orientation, centralized authority andtight control, low overhead, little empowerment
Miles & Snows Strategy Typology
Spectra Interventions
na yzer: a ance e c ency an earn ng, g cos con rowith flexibility and adaptability, efficient processand risk taking for innovation
Reactor no clear organizational approach Org design maychange abruptly based on current needs
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Contingency Effectiveness Approach
Resource InputProduct
Service Output
Organization
ActivitiesAnd
processes
Resource Based
Approach
Internal Process
Approach
Goal
Approach
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Goal ApproachIndicators Mostly organizations use multiple indicators
Market Share
Profitability
Growth
Employee welfare
Product ualit and Service
Efficiency
Resource conservation
Social responsibility
Management development
Although this approach looks logical actual measure ofeffectiveness is a complex process
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Resource Based ApproachAbility of the organization is either absolute or relative termsto obtain scarce and valued resources and successfullyintegrate and manage them
Dimensions Bargaining position
Ability of org decision makers to accurately predict externalenvironment
Ability of organization to respond to change in theenvironment
Useful when goal approach is difficult to apply as in NGO orsocial sector. Also only when the output is connected to thecustomer needs
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Internal Process Approach
Strong corporate culture and positive work climate
Team spirit, group loyalty and team work
Confidence, trust and communication between workers and
management
Decision making near the source of information, regardless
where the source is on chart
,
relevant feelings and facts
Rewards to manager who perform and fuel growth with
development of employees
Conflict amongst various parts resolved in the interest of the
organization
Limitation as total output and relationship to externalenvironment is not measured and many indicators will be
subjective as some internal processes are not measurable.
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Balanced Effectiveness Approach
Stakeholder approach
Competing value approach
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Stakeholder (constituency) Approach
Stakeholder Effectiveness Criteria
Promoters Financial return
Employees Work satisfaction, pay, supervision
Customers Quality of goods and services
Creditors CreditworthinessCommunity Contribution to society/community
Suppliers Satisfactory transactions
Government Compliance to regulations
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Competing Value Approach
Human Relations Model
Goal Values :HRDSub-goals: Cohesion,Morale, training
Open Systems Model
Goal Values: GrowthResource AcquisitionsSub-goals: Readiness.External Evaluation
Structure
Flexibility
Rational Goal Model
Goal Values: efficiency
Productivity, ProfitSub Goals: Planning
Goal setting
Internal Process Model
Goals Values: Stability
EquilibriumSub-goals:
Information Mgt., commn
Control
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Organization A
Internal External
Flexibility
Focus
Human RelationsModel
Open SystemsModel
Stability Control
STRUCTURE
Internal ProcessModel
Rational GoalsModel