Lecture 11/12 - Strategy & Organization Flashcards
What are the 3 organizational levers to support/change strategy?
- Organizational Structure
- Management Processes
- Leadership Behaviour
What is a functional structure? What are the pros and cons? Which strategy is a good fit for a functional structure?
- Organization is divided by major functions (e.g., Marketing, Finance, HR, etc.)
- PROS: standard product, efficient, lack of duplication of resources
- CONS: limited sensitivity to local markets, slow decision making
- Consistent with a low-cost strategy
What is a product structure? What are the pros and cons? Which strategy is a good fit for a product structure?
- Organization is divided by product lines (e.g., books, magazines, newspapers)
- PROS: Focus on each product line, allows for customization, innovation
- CONS: lose efficiencies, duplication of resources (e.g., a marketing department for each product line), multiple contact points for customers
- Consistent with a differentiation strategy
What are the 3 components of management processes?
- Decision making (speed vs. accuracy)
- Operating (cross-unit communication and cooperation)
- Assessment and reward (motivation)
What is the difference between the Theory X and Theory Y theories of motivation?
Theory X
- People dislike work, motivated by making money, prefer to be directed rather than having responsibility, striving for security
Theory Y
- People will direct themselves when they are committed to the objective of the organization, satisfaction comes from commitment to the organization, people strive for responsibility and personal achievements
The behaviour of organizational leaders should be…
Consistent with “the talk” - leaders should follow the same rules that employees are told to follow
Aligned with the strategy of the company (e.g., striving for cost reductions but executives receive perks - NOT GOOD)
What are the three levels contained within the organizational capabilities model?
Culture - shared values, beliefs and core basic assumptions
which influences…
Behaviour - how much energy employees put into their job, how employees relate to each other, etc.
which influences…
Organizational Capabilities
What are the 5 steps of Strategy-Organization Link analysis?
- Complete the strategy triangle analysis
- Identify the organizational elements (structure, processes, leadership behaviour) required to implement the strategy
- Determine current organization elements and identify gaps
- Determine how to close the gaps (what will it take to do this? how much is it going to cost? how long is it going to take? how will it impact organizational culture/behaviour?)
- Move to the next link in the Diamond-E framework (or stop if you are done!)
What are the two options for aligning strategy and the organization?
- Organizational elements are modified to support the chosen strategy
- The strategy is chosen to match the organization’s characteristics and environment requirements
What is a multi-domestic strategy?
Companies try to achieve maximum local responsiveness by customizing both their product offering and marketing strategy to match different national conditions.
Production, marketing, and R&D activities tend to be established in each major national market where business is done.
Each country has a separate headquarters.
What is a global strategy?
Presence in multiple markets using the same product presentation and largely similar marketing presence.
What are the 5 drivers of globalization?
- Homogenization of products
- Falling trade barriers
- Growing technology investments
- Competitor behaviour (go where competitors go)
- Supplier and/or customer behaviour (go where the good suppliers are, where the customers are)
What are the main differences between multidomestic and global industries?
Products
- Multidomestic = products differ fro market to market
- Global = products require little adaptation
Transportation costs
- Multidomestic - high transportation costs
- Global - Transportation costs not a major factor
Emphasis on service
- Multidomestic - emphasis on service, face-to-face contact
- Global - local service not as important
National standards
- Multidomestic - different national standards
- Global - same national standards
What are 4 modes of entering global markets?
- Export Contract
- Sales Office
- Joint Venture
- start a new company OR join with an existing company - Greenfield (stand alone)
What are 4 benefits of global strategies?
- Cost reduction - if each function is performed where it is most efficient
- Quality Improvement - location can be where the required expertise can be most favourably accessed
- Knowledge Building - share knowledge and resources among subsidiaries
- Marketing Leverage - brand that is well recognized in foreign countries can be more efficiently launched in a new market
