Chapter 9: Implementing Strategy Through Organizational Design

Organizational bearing The process through which managers select the combination of organizational structure and laterality systems that they believe will enable the connection to create and sustain a militant advantage. Coordinate and motivate employees To create valueand Obtain a competitive advantage Koontz and ODonnell The Process School of Management Planning Organizing Staffing say findling Building blocks of organizational structure Differentiation Vertical how untold authority to delegate Horizontal how to divide peopleInto functions and divisions Integration ordinate people and functions To accomplish organizational goals and tasks Tall structure (7 10 levels) two-dimensional structure (2 4 levels) Tall Structure Problems Coordination Information distortion pauperization Too many affectionateness managers McKinsey Consulting Company Increased height of company organization structures Presidents Office President of all(prenominal) division Centralization or D ecentralization (tending toward) Decentralization 1. Delegate decision making authority to middle and cut level managers 2.Adapt to local conditions. Promotes flexibility 3. Fewer managers required Centralization 1. Facilitates coordination and planning 2. Decisions fit broad organizational objectives Management insurance policy Guidelines for decision making are made at highest levels And passed down to lower levels Horizontal Differentiation How to group tasks and activities to meet strategies Functional Structure chemical group by expertise. Most U. S. firms have a functional structure Advantages near(a) place to learn Easy to control Effective and efficient Disadvantagesgeographic diversion causes duplication of people and costs Communication problems Measurement problems hole problems Strategic problems production Structure Group by product line. Product Team structure Matrix Management Concurrent Design methodological analysis Cross-functional teams Geographic Struc ture Multidivisional Structure Self-contained product line or business unit (Operating responsibility) Corp headquarters staff. Financial Control. (Strategic Responsibility) Advantages of Multidivisional Structure raise corporate financial controlStrategic control Growth inseparable efficiency Disadvantages of a Multidivisional Structure Establish Division-Corporate authority levels GM and Alfred Sloan Litton Industries straining of information Competition for resources Transfer pricing (GE example) Focus on short-term High operating costs All functions are in each division Integration and Organizational Control Forms in Integrating Mechanisms 1. charge contact 2. Interdepartmental liaison roles 3. Temporary task forces ad hoc committees 4. everlasting teams standing committees 5. Integrating rolesDifferentiation and Integration The Nature of Organizational Control 1. Monitor 2. Evaluate 3. Compare actual to goals 4. Take corrective fulfil Strategic Controls Financial contro ls Stock Sales Growth ROI Profit create Controls Set Goals Measure output performance against goals Behavior Control Rules and Procedures putting green controls 1. Operating budgets 2. Standardization 3. Rules and procedures 4. Organizational glossiness a. Values beliefs and goals b. Norms Expectations for behavior Culture and Strategic Leadership Walt Disney example