Implementing Strategy In Companies That Compete In Single Industry

Question 1

Discuss the building blocks of organisational structure

Answer 1

The purpose of an organisational structure is to delegate tasks to people and connect the activities of different people and functions

1. Grouping tasks, functions and divisions together: best way to group tasks into functions, and functions into business units in order to create unique business competencies
2. The allocation of authority and responsibility: allocating authority and responsibility to these functions
3. Integration and integrating mechanisms: increasing coordination as the functions and structures become more complex

Question 2

1. Grouping tasks, functions and divisions

Answer 2

Choice of structure is made on its ability to implement company’s business model and strategies successfully

• org structure follows different tasks that org pursues
• org groups people and tasks into functions then group functions into divisions
• function is collection of people who work together and perform similar tasks
• division is a way of grouping functions to allow org to better serve customers and become more efficient
• handoffs are work exchanges between people, functions and subunits

Question 3

2. Allocating authority and responsibility

Answer 3

In order to Economise on bureaucratic costs and coordinate activities, an org must have a clear and unambiguous hierarchy of authority

• org structure
• span of control
• tall vs flat organisations:
• decision making: centralised vs decentralised

Question 4

3. Integration and integrating mechanisms

Answer 4

Used to improve communication and coordination among functions and divisions

• direct contact: creates context within which managers across functions or divisions can work together
• liaison roles: increases coordination by giving each manager in each function or division the responsibility to communicate with another
• teams

Question 5

Strategic control systems

Answer 5

Target setting and feedback system that determines whether a company is implementing its strategy successfully.
Characteristics of an effective control system include:
-flexibility: to allow managers to respond quickly and effectively to unexpected events
-accurate information: giving a true picture of org performance
-timeliness: presentation of information decision making

Question 6

Steps in designing an effective strategic control system

Answer 6

1. Establish standards and targets
2. Create measuring and monitoring systems
3. Compare actual performance against the established targets
4. Evaluate result and take necessary action if needed

Question 7

Levels of organisational control

Answer 7

• Board of directors
• Corporate level managers
• Divisional level managers
• Functional level managers
• First level managers

Question 8

List the different type of control systems

Answer 8

• Personal control: face to face interaction dealing with individuals and their behaviour in order to sync it to company goals
• Output control: forecast of needed performance then compares actual performance in relation to org goals
• Behaviour control: establishing a system of procedures and rules to direct actions and behaviours of divisions, functions and units towards organisational goals

Question 9

Effective strategic reward systems

Answer 9

• Links reward system to control system
• Selects which actions and behaviour to reward
• Create control system to measure and link to reward

Question 10

Creating an effective organisational culture

Answer 10

Org culture is the collection of norms, and values shared by people in the organisation.

• Organisational socialisation: the process in which members become familiar with the organisational culture
• Strategic leadership: in which the founder passes down established styles to company’s managers
• Strong and adaptive cultures: innovative, contain reward initiatives and have common values

Question 11

Developing culture at the functional level

Answer 11

• Production: functional strategy improves efficiency and quality
• R&D: develops distinctive competencies in innovation, quality, and excellence that result in products that fit customer needs
• Sales: monitor sales behaviour and encourage high responsiveness to customers to develop sophisticated output and behaviour controls

Question 12

Areas in the functional structure that lead to increased bureaucratic costs and how outsourcing can avoid this

Answer 12

Areas leading to increased bureaucratic costs
-communication and measurement problems
-customer and location problems
-strategic problems
Outsourcing 
-avoids comm and measurement problems
-allows company to put more focus on competencies leading to competitive advantage
-economises on bureaucratic costs

Question 13

Define Restructuring and Reengineering

Answer 13

Restructuring: process in which company:

• streamlines its hierarchy of authority
• reduces the number of levels in its hierarchy to reduce operating costs

Reengineering: redesigning business processes to achieve improved performance
*e.g improve in quality, service, speed

Question 14

Organisational design

Answer 14

Selecting right combo of org structure, control systems and culture to pursue business model successfully

• org structure: assigning employees to specific value creation tasks and roles
• control system: a set of incentives to motivate employees
• org culture: collection of values, norms, beliefs, and attitudes shared within org