Lesson 12: Strategy Implementation Through Organsational Design Flashcards
What are the contingency variables about the environment?
1) Degree of predictability: stable vs. Dynamic
2) Amount of knowledge: simple vs complex
3) Differences: homogeneous vs heterogeneous
4) Competitve and poltical pressure: friendly vs hostile
What are the contingency variables about the organization
1) Amount of procedures: formal vs informal
2) Location of decision making: centralised vs decentralised
What are the connections between the environment and the organsation
Stable environment –> centralised and formal structure
Dynamic environment = decentralised and informal structure
Simple environment = centralised structure
Complex environment = decentralised structure
Hostile environment = centralised structure
What are the types of structures,
Simple structure
Functional
Divisional
Corporate
Matrix
Project organsation
International structure
What is the simple structure?
One leader organisation = simple structure
The owner is often also the manager
The manager is involved in and make every decision
Data collection, analysing and action take place simultaneous by the manager
Fast moving and flexible organsation
A risky type of organsation
Strategy has the form as a vision and a pattern of action
Young companies with a focus strategy, build and protect
What is the functional structure?
The functional structure:
Specialisation within the functions create efficiency.
Coordination and communication across functions is challenging.
Limit capacity to handle information at the top of the organisation.
This structure handles change poorly.
What is the divisional structure?
Applied by organisation that need to adapt to local, national or regional conditions around the world.
Often big and old bureacracies
Doubling of stab functions many places within the structure
Economic transparency of the organsation is often challenging
What is the corporate structure?
Often big and old organsations
Very often they perform activities with different business/industry
This structure creates econmic transparency of different activities
Facilitate decentralisation = different competitive strategies possible
Subsidiary companies are organised at differen product/markets
What is the matrix structure?
Good at innovation and complex assignments
Expensive organsation due to much communication
Often younger and smaller organsations
Difficult firm to manage due to many specialist and managers.
Dynamic: innovative companies, R&D
Stable and complex, structuring what’s going on.
Eg. CBS complex, but not dynamic.
What is project organsation?
Demarcated in time = a temporary structure
Create a strong focus on solving specific issues
Often applied when solving unique assignments for costumers.
The structure is often applied for internal projects or changes
Samenvatting van de organisational structures?
1) Simple structure: Flexible, fast but risky
Simple and dynamic environment
2) Functional structure: efficient through specialisation, but stiff
Simple and stable environment
3) Divisional structure: local focus but bureaucratic
Heterogeneous environment
4) Corporate structure: create overview over diversity
Heterogeneous environment
5) Matrix structure: innovative, but expensive
Complex and stable.dynamix environment
6) Team- and project based structures = temporary assignment
Complaex andstable/dynamic environment
What are structures that facilite certain competitive strategies
The simple structure facilitates the focused strategies
The functional structure facilitates both cost leader and differentiation strategies
The divisional structure facilitates differentiation strategies even though all divisions must follow the same competitive strategy
The holding structure makes it possible for each subsidiary company to follow individual competitive strategies
The matrix structure facilitates a focues differentiation strategy
What structures facilitates growth strategies?
1) Build and protect:
Simple structure - Functional form
2) Product development:
Functional form - Project organisation - Matrix organsation
3) Market development:
Project organisation - Divisional form - Matrix structure
4) Diversification:
Divisional form - Holding structure
What is the connection between corporate roles and organsational structure?
The divisional form fits with the: Synergy manager Parental development role Market development Related diversification
The holding structure fits with the:
Portfolio manager
Both types of diversification
What is the connection between special assignment and focus differentiation
The matrix structure facilitates development of individualised products and services to the customers
The matrix structure facilites high level of skills and knowledge.
The project organisation has the same qualities
What does it mean that development assignment demarcated in time?
Often we apple project organisations in the above situation.
The project organsation is also often applied in developing new strategies, organsational structures, IT systems, etc.
What are the differen organsational structures based on global coordination and local independence and responsiveness
1) International divisions
2) Local subsidiairies
3) Global product divisions
4) Transnational corporations
What are international divisions?
The company manages international activities through a single division nor function.
Production takes place in the home country
Strategy takes place at the centre and local goals of sales are formulated
First phase in a process of internationalisation
What are local subsidiaries
The firm has a number of local/national subsidiaries (typical sales firm for instance Shell, HP, etc.)
Subsidiaries react on local national markets
Products are decided at the centre, but market strategies are decided locally
Management through goals of markets and earnings
Second phase in a process of internationalisation
What are global product divisions
The corporation is divided in several product division which are located in different countries
Exploitation of local factor conditions as salary, access to raw materials, and knowledge
High degree of planning/coordination between subsidiaries
Eg. Japanese car manufacturers
What are transnational corporations?
The corporation has products and sale firms in many countries
Subsidiaries can be seen as a network of companies
Subsidiaries are independent but support each other
National firms reach global size in production and attempt to be local responsive
Top management should create a global shared culture within the corporation
Global development is exploited and resources and competences are transferred from subsidiary to subsidiary.
How can we choose organsational structures?
Choice of organsational structure is not only a question of strategic management, rpoduction, sale and efficiency
It is also a question of control over people and resources
And sometimes it is also influenced by institutional environment (trend and fashion) in order to build legitimacy.
What are the types of management processes = systems
1) Direct supervision = leader overlooks what happens
2) Action planning and control = administrative control
Balance sheets and budgets
3) Performance measurements = administrative control
Balance scorecard, critical performance indicators
4) Market mechanisms
Capital, personal, IT consultancy and other internal services
5) Social and cultural control:
Norms, values and education
6) Self control:
Personality and inner perceptions and behaviour
What is the link between related strategies and management processes?
1) Direct supervision
= simple and dynamic environment
Focus strategies and protect and consolidation strategies
2) Action planning = administrative control
= simple and stable environment
Cost leadership and built and protect strategies
3) Performance measurement = administrative management
= Complex and stable/dynamic environment
Differentiation strategies
Marked development and diversification strategies
What is the link between related strategies and management processes with market mechanisms, social and cultural control and self control?
1) Market mechanisms:
Stable/dynamic and complex environment
Holding structures and portfolio management
Diversification and market development
2) Social and cultural control:
Complex and dynamic environment
Differentiation strategies
3) Self control:
Complex and dynamix environment
Differentiation strategies
What is the relationshiop between the centre and the SBUs?
1) Placing responsibility:
Structuring departments and accountability
2) Strategic planning
Top-down and action orientated
3) Financial control
Performance control and devolution
4) Strategic control
Advisory, coaching, socialisation and negotiation
What are configurations
By configurations we mean organsational variable that interrelates
Eg. McKinsey’s 7s, Mintzbergs archetypes and Miles & Snow’s typology
The idea is that variables like strategy, structure, systems, competencies, leadership style, staff and goals etc. Fit together
When these variables fit together, they optimise the output of the organsation, but at the same time they unfortunately makes changes difficulet. F
What are the dilemmas in organising?
1) Organsing involves contradivtive consideration:
Responsibility vs collaboration
Devolution vs centralisation
Effectively vs flexibility
A holistic view vs attention to the particular
2) Routes out of these dilemmas can be through:
Subdividing the organisation into dependent units each organised based on its particular situation
Combining different types of organsational structures = front office vs back office
Often re-organisation based on different considerations
