Chapter 12 Flashcards
12.1: Suggest how the concept of emergent strategy relates to the debate between whether structure should come before
strategy or vice versa
The concept of emergent strategy suggests that an organisation will need to be prepared to ‘mould’ its predefined rational strategy as the organisation and its strategic plan are influenced by internal and external forces.
If a structure is used to define the strategic plan, then the emergence of structural change (people, environment, etc.) is
likely to require change to the strategic plan.
If a strategic plan is used to define an organisational structure, then the emergence of challenge and force on the
strategy (changing perspectives of the market or of stakeholders) is likely to require changes to the operational structure.
12.2: Suggest the advantages and disadvantages of a matrix organisational structure
Advantages of a matrix organisational structure:
- specialised skills can be used across divisions
- resources can be shared more easily, leading to greater efficiency
- flexibility can lead to removal of silo thinking and better personal opportunities.
Disadvantages of a matrix organisational structure:
- risk of power struggles across the senior team
- uncertainty about ultimate accountability – who do I really report to?
- hard-workers can become overburdened, and the ‘work-shy’ can hide more easily
12.3: What are the differences between an international division of a company and a transnational corporation?
An international division will be a stand-alone operation which, although run under the oversight and principles of
a parent company, will not be integrated into the core structure. This is often the starting point where a business is establishing its initial overseas operation and can test the local potential and requirements without having to change the
core ‘home’ structure. It can be used by organisations with large domestic markets, such as the US or China, when they
establish smaller overseas operations. Usually such structures will draw upon ‘head office’ for many administrative and oversight functions.
A transnational corporation offers a challenging mix of local responsiveness, global co-ordination and the ability to drive strategic growth and innovation across a wide range of different geographic territories and cultures. In many ways this
is similar to a matrix structure but spread across different countries. Bartlett and Ghoshal (1998) suggest that such
structures have a number of core characteristics:
- Each national unit will operate independently as a source of ideas and capabilities for the whole corporation.
- National units achieve greater efficiency and economies of scale by being able to act as specialists for the entire
corporation. - The ‘head office’ will deliver success by establishing the independent role requirement of each business unit, but
then underpin this with effective systems, relationships and culture across the units to ensure a cohesive approach.
Ultimate strategic success for the group will often depend on the ability of ‘head office’ to effectively monitor and
influence the business metrics (the key performance indicators (KPIs), working capital, etc.) of all units while allowing for local culture requirements.
12.4: What is meant by the concept of a boundary-less organisation?
The term boundary-less organisation suggests that while certain parameters of operation (based around stakeholder
expectations) will have to exist, this type of structure can be significantly more flexible than more traditional
models, with differing levels of people within the structure being given more autonomy to implement change and be
accountable for such change. The term boundary-less was first used in 1990 by Jack Welch, then chairman of the
global corporation General Electric Corporation (GE), to describe his vision of a new organisational structure for GE.
Since those early days, the concept has been followed by many other global corporations, but also as an operating
structure within many different sizes of business.
