Strategy In Its Best Ch.12 Essay

4577 words - 19 pages

Chapter Twelve
CORPORATE SINGLE INDUSTRY STRATEGY

- This chapter is related to organizational control, structure and culture.

Learning Objectives
* Understand how organizational design requires the right combination of structure, control, and culture.
* Discuss how effective organizational design enables company to increase product differentiation, reduce costs, & build competitive advantage.
* Explain importance of flat hierarchy & factors determining centralization/decentralization
* Explain advantages of functional structure & why/when necessary to move to more complex structure.
* Differentiate ...view middle of the document...

The structure is the skeleton, it is the road that the vehicle walks on. It has to facilitate the strategy formulation as well as implementation.

- At the same time both of them cannot be separated from the culture.
- To build your structure you have to have ease communication, clear authority and responsibility lines, and efficient in terms of cost.
- The most important factor in changing your strategy and structure is behavioral changes, which will affect the implementation of your strategy negatively.

- When you know what are the resources you want to have then you put the structure.

Organizational Design
* “...the process of deciding how a company should create, use, and combine organizational structure, control systems, and culture to pursue a business model successfully.”

Implementing Strategy Through Organizational Design
- Strategy implementation has three tangible pillars: structure, culture and control. And it has intangible pillars the behavioral issues and the core competencies.
- Employees and customers experience the strategy implementation.
- Behavioral issues are how to communicate your strategy, and bring the employees in. Here the HR, incentives and marketing will be involved.

* Organizational Structure- assigns employees to specific value creation tasks & roles

* Control System
● Incentives to motivate employees.
● Specific feedback on performance.

* Organizational Culture- values, norms, beliefs, & attitudes shared within organization.

Implementing Strategy Through Organizational Design


* Organizational structure, control, and culture shape people’s behaviors, values, and attitudes – and determine how they will implement an organization’s business model and strategies.

Building Blocks of Organizational Structure
1. Grouping tasks, functions, & divisions.
2. Allocating authority & responsibility.
3. Integration & integrating mechanisms.

Choice of Structure
* “...made on ability to implement company’s business model and strategies successfully.”

I. Grouping Tasks, Functions & Divisions
1. Organizational structure – follows range & variety of tasks an organization pursues.
2. Companies group people & tasks into functions, & then functions into divisions.
* Function - collection of people who work together & perform same tasks/hold similar positions.
* Division- way of grouping functions to allow organization to better serve customers.
* Handoffs- work exchanges between people, functions, & subunits.

Bureaucratic Costs
* To economize on bureaucratic costs and effectively coordinate the activities, company...

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