Strategy in Action 12: Organising for Success. Exploring Corporate Strategy 8e, © Pearson Education 2008 12-2 Learning Outcomes (1) Identify key challenges

Strategy in Action 12: Organising for Success

Exploring Corporate Strategy 8e, © Pearson Education 2008 12-2

Learning Outcomes (1)

Identify key challenges in organising for success, including ensuring control, managing knowledge, coping with change and responding to internationalisation

Analyse structural types of organisations in terms of strengths and weaknesses

Recognise how important organisational processes need to be designed to fit their circumstances


Learning Outcomes (2)

Appreciate how internal and external relationships can integrate knowledge and resources within and between organisations

Recognise how the three stands of structure, processes and relationships should reinforce each other in organisational configurations and the managerial dilemmas involved


What is Configuration?

An organisation’s configuration consists of the structures, processes and relationships through which the

organisation operates.


Exhibit 12.1 Organisational Configurations


Key Challenges for Organisations

The speed of change and the increased levels of uncertainty

The importance of knowledge creation and knowledge sharing

The rise of internationalisation


Structural Types

Functional Multidivisional

Matrix Transnational

Project-based


Exhibit 12.2 A Functional Structure


Functional Structures

Advantages

CEO in touch with all operations

Reduces/simplifies control mechanisms

Clear definition of responsibilities

Specialists at senior and middle management

Disadvantages

Overburdened with routine issues

Neglect strategic issues

Difficulty coping with diversity

Coordination between functions

Failure to adapt


Exhibit 12.3 A Multidivisional Structure


Multidivisional Structures

Advantages

Flexible

Control by performance

Ownership of strategy

Specialisation of competences

Training in strategic view

Disadvantages

Duplication of central and divisional functions

Fragmentation and non-cooperation

Danger of loss of central control


Exhibit 12.4 A Matrix Structure


Matrix Structures

Advantages

Integrated knowledge

Flexible

Allows for dual dimensions

Disadvantages

Length of time required for decision making

Unclear job and task responsibilities

Unclear cost and profit responsibilities

High degrees of conflict


Exhibit 12.5 Multinational Structures


What is a Project-Based Structure?

A project-based structure is one where teams are created, undertake

the work, and then are dissolved.


Exhibit 12.6 Comparison of Structures


Design Tests for Checking Structural Solutions

Market-Advantage

Parenting Advantage

People

Feasibility

Specialised Cultures

Difficult Links

Redundant Hierarchy

Accountability

Flexibility


Exhibit 12.7 Types of Control Processes


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.


Exhibit 12.8 An Example of the Balanced Scorecard


What is Devolution?

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

in the hierarchy.


Exhibit 12.9 Relating Internally and Externally


Strategy Styles for Division of Responsibility

Strategic planning style

Financial control style

Strategic control style


Exhibit 12.10 Strategic Planning Style


Exhibit 12.11 Financial Control


Exhibit 12.12 Strategic Control


Methods of Relating Externally

Outsourcing Strategic Alliances

Networks Virtual organisations


Exhibit 12.14 Dilemmas in Organising for Success


Chapter Summary (1)

Organising for success is about an organisation’s configuration, built on three related strands: structures, processes, and relationships

Successful organising means responding to the key challenges facing the organisation: control, change, knowledge and internationalisation

There are many structural types, each with its own strengths and weaknesses


Chapter Summary (2)

There are a range of different organisational processes, direct or indirect and focused on input or outputs, to facilitate strategy

Relationships are important for success

Separate organisational strands should come together to form a coherent reinforcing cycle


Key Debate: Does Structure Follow Strategy?

Hall and Saias suggest that organisational structures can influence the kinds of strategies that management teams will pursue.

What kinds of organisations might be particularly susceptible to structural constraints on their strategies?


Case Example: Hurricane Katrina


Case Example: Hurricane Katrina

What 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 Department’s organisational structure?

Who was responsible for the organisational failures surrounding the response to Katrina?

Documents

Strategy in Action 12: Organising for Success. Exploring Corporate Strategy 8e, © Pearson Education 2008 12-2 Learning Outcomes (1) Identify key challenges