Organiza(ons,Structure,Management

Bo5Chapter4

ORGANIZATIONALMODELS

Organiza(onalModels•  Organiza(onalTheory(foundedbyMaxWeberonthetheoryside)

developedthebureaucra5cmodel:–  Tasksaresplitintospecialistrolesandpeoplebecomeexpertinthese–  Eachruleispreciselyspecifiedsooneexperscanbesubs(tutedforanother–  Eachindividualisaccountabletoonemanagerwhodirectstheirwork–  Employeesarerequiredtorelatetoeachotherandcustomersinaformaland

impersonalway.–  Recruitmentisbasedonqualifica(on,employeesareprotectedfromarbitrary

sacking,promo(onisbasedonseniorityandachievement•  OrganicModel(Likert):“…ensureamaximumprobabilitythatinall

interac(onsandinrela(onshipswithintheorganisa(on,eachmember,inthelightoftheirbackground,values,desiresandexpecta(ons,willviewtheexperienceassuppor(veandonewhichbuildsasenseofpersonalworthandimportance”–smallprofessionalcompanies.

MatrixModel

•  Acceptsthatbureaucra(cmodelistoorestric(ve

•  Workmaybeproject-based•  Employeesmaybeworkingonseveralprojectssimultaneously

•  Employeesmayanswertoseveralmanagersatonce

Organogram

Organogram

Organogram

Organogram

Organogram

Organogram

Ac(vity•  Onyourown:drawupalistofpoten(alorganisa(onalstructuringprinciples.

•  Inapair,refineyourlistwithyourpartnerand:–  Iden(fytwostructuringprinciplesthatcouldbeusedtogether

–  Iden(fytwostructuringprinciplesthatdonotcombinewell

•  Inagroupof4refinethelistfurtherandcomeupwithyourbestpairofprinciplesthatworktogetherandthepairthatdonotworktogether.Trytothinkofacompanythatcouldusethepairyousuggestineachcase.

SomeStructuringPrinciples•  Func(on•  Geography•  Ownership•  ProductLine•  Technology•  Opera(onalStructure•  DepthofHierarchy•  Centralisedversusdecentralised•  Whatstructureisappropriatetothesizeofcompany?

GuardianonVWDieselgate

VWResponsetoDieselgate•  Keyelementsoftheprocessop(miza(onare:

–  Earlydocumenta(onandinterpreta(onoflegisla(onaroundtheworldandalignmentoftheproductpor^oliowiththelegalrequirements

–  Guidelinesforthedevelopmentofso_warefordrivecontrolunitswithdocumenta(onofthefeatureswithrelevanceforregistra(on

–  Introduc(onofmul(plecontrolsforapprovalsintheproductdevelopmentprocess

–  Reorganiza5onwithinDevelopmentforthepurposeofsepara5ngtheresponsibilityforthedevelopmentofdrivesfromofficialapprovals

–  Forma5onofnewbodiesforcross-brandmanagementandclarifica5onofcomplianceissues

–  Uniformprocessstandardsandworkinstruc(onsthatgivethoseinvolvedlegalcertaintyintheworkprocess

–  Trainingprogramsinwhicheveryoneinvolvedintheprocessisrequiredtopar(cipate

–  Regularrepor(ngtotheGroupBoardofManagementinordertocreatetransparencyinrela(ontotheimplementa(onstatusofthisprocessop(miza(on

Summary

•  Organisa(onalstructureisessen(alforlargerorganisa(ons

•  Structureaccordingtobusinesspriori(es•  Allbusinessstructuresmakeitdifficultfortheorganisa(ontorespondtosomerisks.

•  Structuretofacilitatebusinessandmakeiteasytorespondtothemostlikelyseriousrisks

MANAGERSANDLEADERS

ManagersandLeaders

•  Onedayyoumightwanttobeamanageroradirector– Whatdoesthatmeanexactly?– Whatissuesshouldyoubesensi(veto?

•  Dependsonyourseniority

PauseforThought•  ManagersandLeaders•  Inpairs,whatwouldyouexpectof:

–  Amanager–  Aleader

•  Intermsof:–  Theac(vitytheycarryout.–  Theirpersonalcharacteris(csandskills.

TheManager

•  Developsplansand(metables•  Organises•  Delegatesandmonitors•  Exercisescontrol,appliescorrec(veac(on•  Communicates•  Mo(vates•  Delivers(predictable)•  Looksinwards

Leadercanemerge…

•  Perceivedbygroupasmostcompetentinleadershipfunc(ons-

•  Task-orientated:coordina(ng,ini(a(ngcontribu(ons,evalua(ng,informa(onseekingandgiving,opinionseekingandgiving,mo(va(ng

•  Socio-emo(onal:reconcilingdifferences,arbitra(ng,encouragingpar(cipa(on,increasingcohesion

TheLeader

•  Establishesdirec(on•  Developsvision•  Communicatesandinspiresvision•  Energisesothers•  Innovates•  Figurehead,Spokesman•  Looksoutwards

Summary

•  Managersmanage,leaderslead•  Managershaveaspecificrolewithintheorganisa(onalstructure:– Replaceable– Trainable

•  Leadersprovidedirec(on,mayarisefromanywhere:– Noteasilyreplaceable– Nottrainable

CONTROLLINGORGANIZATIONS

Organisa(on

•  Acompanyisaninstrumentformaximisingvaluefortheshareholders

•  Drivenbymarkets–lackofunderstandingofmarket=nocustomers=nobusiness

•  Drivenbyresources–lackofunderstanding=lackofcontrol

•  Themoresenioryoubecomethemorethesewillbeconcerns

Performanceareas(Drucker)

•  Marketstanding•  Innova(on•  Produc(vity•  Physicalandfinancialresources•  Profitability•  Workerperformanceandaetudes•  Managerperformanceanddevelopment•  Publicresponsibility

MarketsandMarke(ng

•  Marke(ngisnotstuffthroughyourle5er-boxorpeoplecold-callingyouat6pm.

•  Marke(ngisthebusinessofunderstandingthemarket,yourplaceinit,youropportuni(es,threats,compe((onandyourcustomers

•  Thereexistmanytoolsandmodelstohelpunderstandthem

Porter’s5forces

New Entrants

Buyers Suppliers Competitors

Substitutes

Barriers to entry

Examples

•  NewEntrant:Ford-Tesla•  Subs(tute:Vinylrecord–CD–iTunes-Spo(fy•  Controlofsuppliers–Tesco•  Controlofbuyers–monopoly•  Controlbybuyers–perfectmarket;eBay?

•  Barrierstoentry–Semiconductorindustry–mobilephones…

P.E.S.T./S.W.O.T.

•  Poli(cal•  Economic•  Social•  Technological

•  Strengths•  Weaknesses•  Opportuni(es•  Threats

(internal)

(external)

P.E.S.T.–carmarket

•  Poli(cal–emissionsreduc(ontargets– Worksagainstinternalcombus(onengines

•  Economic–controlofrareearthproduc(on– Raisesconcernsoverelectricvehicles

•  Social–familysize,behaviour– 1-parentfamilies–hatchbacks?– Millenials:Transportasaservice

•  Technological–newproducts– Hydrogen,hybrids,recyclablematerials

Marke(ngMix–the4*Ps

•  Product– Quality,features,name,packaging,services,guarantee

•  Price– Listprice,discounts,credit

•  Promo(on– Adver(sing,personalselling

•  Place– Distributors,retailers,loca(ons,transport

Compe((on

•  Cancompeteoncostordifferen.a.on:–  Cost:makethesamethingcheaper–  Differen(a(on:makeitdifferent/be5er/here

•  Compe((venessbasedoncorecompetencies–  AnyonecanmakeCoca-Cola

•  Onlytheyhavethenetworkoflicensedmanufacturersanddistributors(andthebrandname)

–  Anyonecanputanaircra_inthesky•  Onlytheprofitableairlinescanfillitevery(me

•  Eachsurvivorisuniquelysuperiortoallothersinsomewayandthusoccupiesaniche

Breakout

Youareahorse-buggywhipmanufacturerca.1910

Considerthemarketyouarein,performaPESTandSWOTanalysisandindicatewhatmarketreposi(oningmightbeadvantageous

S.W.O.T.

Horse-buggywhipmanufacturer,1910seeshorsesmakingwayforcars

•  Strength:hassupplychaintoreachbuggyowners/futurecarowners

•  Weakness:productishorse-dependent•  Threat:carsmakeproductobsolete•  Opportunity:reposi(onassupplierofdriveraccessories

Actuallytheydidn’tandwentoutofbusiness

Marketreposi(oning

•  McDonalds•  RoyalBankofScotland•  Burberry•  Apple

Data…

Summary

•  Successfulorganiza(onsknowtheirmarkets•  Successfulorganiza(onsaresensi(vetochangesinmarkets

•  Successfulorganisa(onsmeasurewhatisgoingoninmarkets

•  Companiesusedatatosupportstrategicdecisions(andthisischangingrapidly).