Lesson 12: Strategy Implementation Through Organsational Design

Question 1

What are the contingency variables about the environment?

Answer 1

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

Question 2

What are the contingency variables about the organization

Answer 2

1) Amount of procedures: formal vs informal

2) Location of decision making: centralised vs decentralised

Question 3

What are the connections between the environment and the organsation

Answer 3

Stable environment –> centralised and formal structure
Dynamic environment = decentralised and informal structure

Simple environment = centralised structure
Complex environment = decentralised structure

Hostile environment = centralised structure

Question 4

What are the types of structures,

Answer 4

Simple structure

Functional

Divisional

Corporate

Matrix

Project organsation

International structure

Question 5

What is the simple structure?

Answer 5

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

Question 6

What is the functional structure?

Answer 6

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.

Question 7

What is the divisional structure?

Answer 7

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

Question 8

What is the corporate structure?

Answer 8

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

Question 9

What is the matrix structure?

Answer 9

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.

Question 10

What is project organsation?

Answer 10

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

Question 11

Samenvatting van de organisational structures?

Answer 11

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

Question 12

What are structures that facilite certain competitive strategies

Answer 12

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

Question 13

What structures facilitates growth strategies?

Answer 13

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

Question 14

What is the connection between corporate roles and organsational structure?

Answer 14

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

Question 15

What is the connection between special assignment and focus differentiation

Answer 15

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

Question 16

What does it mean that development assignment demarcated in time?

Answer 16

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.

Question 17

What are the differen organsational structures based on global coordination and local independence and responsiveness

Answer 17

1) International divisions
2) Local subsidiairies
3) Global product divisions
4) Transnational corporations

Question 18

What are international divisions?

Answer 18

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

Question 19

What are local subsidiaries

Answer 19

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

Question 20

What are global product divisions

Answer 20

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

Question 21

What are transnational corporations?

Answer 21

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.

Question 22

How can we choose organsational structures?

Answer 22

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.

Question 23

What are the types of management processes = systems

Answer 23

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

Question 24

What is the link between related strategies and management processes?

Answer 24

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

Question 25

What is the link between related strategies and management processes with market mechanisms, social and cultural control and self control?

Answer 25

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

Question 26

What is the relationshiop between the centre and the SBUs?

Answer 26

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

Question 27

What are configurations

Answer 27

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

Question 28

What are the dilemmas in organising?

Answer 28

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