Lec 4 _ Chapter 13

Strategy in Action 4: Organising for Success EXPLORING STRATEGY

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Exploring Corporate Strategy 8e, Pearson Education 2008

12-*Learning OutcomesIdentify key challenges in organising for successAnalyse structural types of organisations in terms of strengths and weaknesses Recognise how important organisational processes need to be designed to fit their circumstances Appreciate how internal and external relationships can integrate knowledge and resources

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12-*1. What is Configuration?An organisations configuration consists of the structures, processes and relationships through which the organisation operates.

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12-*Organisational Configurations

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12-*Key Challenges for OrganisationsThe speed of change and the increased levels of uncertainty in the business environmentThe importance of knowledge creation and knowledge sharingThe rise of internationalisation

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12-*2. Structural TypesFunctionalMultidivisionalMatrixTransnationalProject-based

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12-*2.1. Functional StructureIs based on the primary activities that have to be undertaken by an organisation such as production, finance and accounting, marketing, human resources and research development

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12-*2.1. Functional Structure

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12-*Functional StructuresAdvantagesCEO in touch with all operationsReduces/simplifies control mechanismsClear definition of responsibilitiesSpecialists at senior and middle managementDisadvantagesOverburdened with routine issuesNeglect strategic issuesDifficulty coping with diversityCoordination between functionsFailure to adapt

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12-*2.2.Multidivisional StructuresIs built up of separate divisions on the basis of products, services or geographic areas

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A Multidivisional Structure

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12-*Multidivisional StructuresAdvantagesFlexibleControl from distance by monitoring performanceOwnership of strategySpecialisation of competences Training in strategic view

DisadvantagesDuplication the functions and cost of centralFragmentation and non-cooperationDanger of loss of central control

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12-*2.3. Matrix StructureIs a combination of structures which could take the form of product and geographical divisions or functional and divisional structure

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12-*A Matrix Structure

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12-*Matrix StructuresAdvantagesIntegrated knowledgeFlexibleAllows for dual dimensions

DisadvantagesLength of time required for decision makingUnclear job and task responsibilitiesUnclear cost and profit responsibilitiesHigh degrees of conflict

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12-*2.4. Transnational StructuresCombines the local responsiveness of the international subsidiary with the coordination advantages found in global product companies

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12-*Transnational Structures

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12-*2.5. Project-Based StructureA project-based structure is one where teams are created, undertake the work, and then are dissolved.

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Comparison of Structures

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12-*Design Tests for Checking Structural SolutionsMarket-AdvantageParenting Advantage People FeasibilitySpecialised CulturesDifficult LinksRedundant HierarchyAccountabilityFlexibility

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12-*3.5 Types of Control Processes

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12-*What is a Balanced Scorecard?Balanced scorecards combine both qualitative and quantitative measures, acknowledge the expectations of different stakeholders and relate an assessment of performance to choice of strategy.

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12-*An Example of the Balanced Scorecard

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12-*4. Relationship Relating Internally and Externally

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12-*4.1. Relating internally4.1.1. Relating to centre

Devolution concerns the extent to which the centre of an organisation delegates decision making to units and managers lower down in the hierarchy.

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12-*Strategy Styles for Division of Responsibility Strategic planning styleFinancial control styleStrategic control style

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12-*Strategic Planning Style

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12-*Financial Control

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12-*Strategic Control

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12-*4.1.2. Methods of Relating ExternallyOutsourcingStrategic AlliancesNetworksVirtual organisations

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12-*Chapter Summary (1)Organising for success is about an organisations configuration, built on three related strands: structures, processes, and relationshipsSuccessful organising means responding to the key challenges facing the organisation: control, change, knowledge and internationalisationThere are many structural types, each with its own strengths and weaknesses

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12-*Chapter Summary (2)There are a range of different organisational processes, direct or indirect and focused on input or outputs, to facilitate strategyRelationships are important for successSeparate organisational strands should come together to form a coherent reinforcing cycle

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12-*Case Example: Hurricane Katrina

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12-*Case Example: Hurricane KatrinaWhat was the strategy of the Department of Homeland Security in the period immediately before Hurricane Katrina?In the light of this strategy, what if any changes should be made to the Departments organisational structure?Who was responsible for the organisational failures surrounding the response to Katrina?

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******************************Use Amazon. Begin at 3:40 and stop at 4:13. This is section on infrastructure and physical versus virtual space.****

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Lec 4 _ Chapter 13