Why are strategy and organizational learning important and linked? What is organizational design and...

Why are strategy and organizational

learning important and linked?

What is organizational design and how is it

linked to strategy?

How does technology influence

organizational design?

How does the environment influence

organizational design?

Copyright © 2010 John Wiley & Sons, Inc. 17-2

Strategy

The process of positioning the organization

in the competitive environment and

implementing actions to compete

successfully.


Organizational learning

Process of knowledge acquisition and

adaptation to changing circumstances through:

Information distribution

Information interpretation

Information retention


Experience

A primary way to acquire knowledge.

Besides learning by doing, managers can

also establish structured programs to learn

from successes as well as failures.


Scanning Involves looking outside

the firm and bringing

back useful solutions.

Copyright © 2010 John Wiley & Sons, Inc.

GraftingThe process of acquiring individuals, units,

or firms to bring in useful knowledge.

17-7

Avenues for knowledge retention:

Individuals

Transformation mechanisms

Formal structures

Physical structures (ecology)

External archives

IT systemsCopyright © 2010 John Wiley & Sons, Inc. 17-8

Organizational design

The process of choosing and implementing

a structural configuration.


The structural configuration:

Allows the management to focus on skills

and abilities that their firms need to

compete, be flexible, and adaptive.

Allows the individual members the ability

to experiment, grow, and develop

competencies that contribute to success.


Co-evolution of strategy and

structure

The firm can adjust to external changes

even as it shapes some of the challenges

facing it.

Shaping capabilities via the organization’s

design is a dynamic aspect of co-evolution.


Organizational size As the number of

employees increase, the

possible interconnections

among them increase

even more.

The design of small firms

is directly influenced by

core operations

technology.


Simple design

A configuration involving one or two ways

of specializing individuals and units.

Vertical specialization and control

emphasize levels of supervision without

elaborate formal mechanisms.


Managerial scripts

A series of well-known

routines for problem

identification and

alternative generation and

analysis that are common

to managers in a firm.


Co-evolution of strategy and

structure can be hampered by:

Organizational inertia

Hubris

Issue of detachment


Operations technology

The combination of resources, knowledge, and

techniques that creates a product or service.

Information technology

The combination of machines, artifacts,

procedures, and systems used to gather,

store, analyze, and disseminate information

for translating it into knowledge


Thompson’s view of technology

Classification according to the degree of

specification and degree of

interdependence of work units.


Intensive technology Uncertainty as to how to produce desired outcomes.

Requires assistance of specialists.

Mediating technology Links parties that want to become interdependent.

Long-linked technology Production method is known and broken down into a

number of sequential steps.


Woodward’s view of technology

Small-batch production.

Mass production.

Continuous-process technology.


An adhocracy is characterized by:

Few rules, policies, and procedures.

Substantial decentralization.

Shared decision making among members.

Extreme horizontal specialization.

Few levels of management.

Virtually no formal controls.Copyright © 2010 John Wiley & Sons, Inc. 17-22

An adhocracy is useful when:

The tasks facing the firm vary considerably

and provide many exceptions.

Problems are difficult to define and solve.


Why IT makes a difference

IT provides a partial

substitute for:

Operations

Process controls

Methods of coordination

IT provides a strategic

capability


IT as a substitute

Initial implementation of IT often displaced

routine, highly specified, and repetitious

jobs.

A second wave of substitution replaced

process controls and informal coordination

mechanisms with IT.


IT as a strategic capability

Improves the efficiency, speed of responsiveness,

and effectiveness of operations.

Provides all levels of the organization with the

knowledge required for immediate decision-

making.

Enhances motivation through individual

empowerment.


IT and e-business

Many dot-com firms adopted some

variation of adhocracy.

As the dot-coms grew, the adhocracy

design became problematic.


Virtual organization

An ever-shifting constellation of firms, with

a lead corporation, that pool skills,

resources, and experiences to thrive

jointly.

Partner firms are bound by mutual trust

and need for collective survival.


General environment

The set of cultural, economic, legal-political, and

educational conditions found in the areas in

which the organization operates

Specific environment

The owners, suppliers, distributors, government

agencies, and competitors with which an

organization must interact to grow and survive.


Environmental richness

A condition where the economic climate is

improving, customers are buying more

products, and suppliers are willing to

invest in the organization’s future.

Provides the best climate for opportunity

and dynamic growth.


Environmental interdependence

Linkage between environmental

independence and organization design

may be subtle and indirect.

Organization may co-opt powerful outsiders

by including them on governing board.

Develop centralized staff teams to service an

important client group.


Environmental uncertainty

A more organic structure is the appropriate

organizational design response to

uncertainty and volatility.


In a complex global economy, firms must

learn to co-evolve by adjusting their

environment.

Two important ways of co-evolution:

Management of networks

Development of alliances


Inter firm alliances

Cooperative agreements or joint ventures between

two independent firms.

Often, firms are geographically and geopolitically

separate, but have common interests.

A structure that is often used in complex

technology industries.


Why are strategy and organizational learning important and linked? What is organizational design and...

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