ORGS 2200 - Week 2 : Organizations as Strategic Design

What is the strategic organization view?

input-throughput-output system

What are the strategic key concepts?

• act

• interdependence

• resource

• structure

• system

What are the strategic key processes?

• aligning

• linking // integration

• grouping // differentiation

• fit

What is the strategic environment view?

• resource base // input source

• competitive market

• opportunity / threat

What is the strategic leader role?

• organization architect

• strategist

What does strategic design mean?

strategy for creating value providing way to generate / assess organization design

What are some strategic act examples?

• quickly get R&D → market

• continuously improve ⟹ drive production cost down

• provide speedy / reliable service

What is the plan and strategy difference, according to Roger Martin?

• plan has to do with resources one’s going to spend → less tricky BECAUSE one controls resources

v.s.

• strategy has to do with competitive outcome one’s wishing to achieve → more tricky BECAUSE one does NOT control customers

What are a company’s organizational structures, according to Harold Green?

• formal chart

• everyday relation

What is the strategic key resource?

info

What do people need to do to achieve strategic goals?

share / create / direct info

What are the strategic elements?

• Tk

• Cx

• Rt

• Id

What does Tk mean?

|:| task

basic organization design element

• smallest act unit to realize goal

What does Cx mean?

|:| complexity

part number

What does Rt mean?

|:| routinization

specified / programmed act extent

What does Id mean?

|:| interdependence

other task need

What are the easiest and hardest interdependences to manage?

ease: pooled > sequential > reciprocal

What is a fundamental organization design assumption?

coordination / communication ease & density: within unit > across unit

What should strategy do to guide design?

identify most important coordination / interdependence / knowledge sharing parameter

What are the grouping basic forms // ideal types?

• expertise / function

• output / product

• geography / customer

What is the oldest business form?

functional organization

What are the function group strengths?

• deep functional expertise / specialization degree

• economy of scope

• separate alignment system suited to need / strength

What is an economy of scope?

relative resource transfer ease across acts in function

What are some alignment system examples?

• evaluation

• training

• reward

What is the function group weaknesses?

• function integration

• narrow perspective

• functions’ management level expansion

What explains function integration as a function group weakness?

assumes sequential interdependence across functions → difficult backward info flow SO not responsive to market change

What explains narrow perspective as a function group weakness?

difficulty solving problem requiring joint effort → difficulty assessing cost on product line basis / assigning accountability

What explains functions’ management level expansion as a function group weakness?

tall hierarchy inhibits speedy info flow → few manager opportunities to gain experience outside function SO does NOT develop large general manager supply who see organization as whole / serve strategy

What are the output group strengths?

• performance transparency

• strategic focus for managers

What explains performance transparency as an output group strength?

clear cost / profit

What explains strategic focus for managers as an output group strength?

business division heads = responsible for value chain profit / growth

What are the output group weaknesses?

• difficulty sharing resources

• difficulty creating businesses

• professional focus losses

• missed learning opportunities

What explains difficulty sharing resources as an output group weakness?

act duplication

What explains difficulty creating businesses as an output group weakness?

expand business / compete to own new business

What explains missed learning opportunities as an output group weakness?

break function silo down BY setting division → business unit silo = just as competitive / resistant to cross-boundary synergy

What is the output group strategy?

efficiency

• critical cost / profit info

What is the market group strategy?

customer focus

• differed need / taste

What is the market group strength?

deep customer knowledge / relation

What are the market group weakness?

• act / resource duplication

• expertise erosion

• missed learning / synergy opportunity

What is a matrix structure?

2 equal strategic group dimension structure

What are the matrix weaknesses?

• dual system / role / control / reward requirement

• confusion / high cost / decision delay / conflict potential

• 1 dimension > other dimension

• difficult 2 bosses

• > 2 dimensions

What did companies abandon the matrix for?

link > group structure

What is a front/back structure?

2 part organization with different dimension

What are the front end functions?

• marketing

• sales

• distribution

• service

• support

What are the back end functions?

• tech

• production

• logistics

What are the front/back advantages?

back

• tech / production integration

front

• market knowledge

What are the front/back weaknesses?

• difficult synergy

back

• expertise fragmentation

front

• market need & tech integration

What are the network group advantages?

• agility / flexibility

• collaborative environment

• open communication / knowledge share

What are the network group key characteristics?

• employee motivation

• outsourcing / partnership

• flexibility / resolution

• decentralized decision / empowerment

• coordination / control

• team formation

• specialization

• collaboration / innovation

• adaptability

• resilience

What is the line & staff difference?

line

• chain of command

staff

• campaign plan / logistic support

What does linking mean?

structure design to connect interdependent units separated by strategy

What is a growing link challenge?

develop link beyond company boundary

What are some link examples?

• dotted line

• liaison

• integrator

• cross-unit

• project team

• infotech system

• colocation

What does dotted line mean?

low rank supplies info to high rank BUT high rank has no authority beyond info flow

What is the dotted line use?

distributed subunit support act

What are the integrator uses?

general management perspective / swift issue resolution involving units

What is the integrator task?

coordinate act / decision

• NOT do work

What is the IoT strength?

• push time / distance constraint

• disseminate info

• facilitate team

What is co-location?

put units needing to exchange info in same location

What is alignment?

unit assigned act by link having motivation / resource

What is an alignment reason for redesign failure?

lack of organization congruence

What are the main alignment systems?

• performance measurement

• reward

• resource allocation

• HR development

What do organizations align with measurement systems?

• intent

• group

• parts

What are the reward key principles?

• performance → pay / standard

• reward → performance nature

• reward → objective within control

• incentive → measurement period

• equity

  • NOT equality

What can be the most difficult organization design task?

resource allocation

What explains why redesigns fail without HR development?

NOT recognize need to align HR / new design expertise

What are the design change risks?

• business disruption

• relation risk

• stress

What is a difficulty cause when an organization moves to a new design?

NOT adequately processed info

What explains inadequate processed info as a difficulty cause when an organization moves to a new design?

employee does NOT know how to add value / how much info to pass

What are the good design rules?

• emerge from widest alternative range

• involve people understanding work

• develop with implementation in mind

What are the design change stimuli?

• NO longer fits external pressure

>

• product growth response

• management succession

• internal problem

What is a throughout-put system?

take environment input → add value BY internal process → distribute outside organization

What environment shifts make design inadequate?

• new competitor

• tech innovation

• market & supplier / labour & rule change

What does one need to understand organization strategic design?

1. know strategy

• what organization tries to accomplish

• how organization tries to differentiate

2. map design

• what is group

• how are units linked by group

• are basic systems aligned with tasks

  • reinforce / pull

• does design fit environment / strategy demand

  • input / requirement / competition

What is the most common analyzing structure approach?

top down

What means can one use to analyze an organization?

select subunit → map design (group / link / alignment) → examine system fit

What are some analysis variable examples?

• customer

• contact

What are the strategy challenges?

• inadequate info & design directing effort to unit goal getting in way of overall goal

• NOT have resource

What are the strategy design steps?

• generate design criteria

• generate / evaluate group alternative

• identify coordination requirement

• generate / evaluate link

• conduct impact analysis

• refine design

• identify design / alignment & implementation issue

What is the identifying coordination requirement objective?

identify info process needs from design criteria

What is the generating link objective?

create links responsive to coordination requirements enhancing design criteria extent

What is the evaluating link objective?

combine alternative IF necessary

What is the conducting impact analysis objective?

assess alternative with alignment fit

(QUIZ) Efficiency and effectiveness are basically the same thing

False

(QUIZ) Which of the following would be an example of a strategic design question?

Should we have contractors or employees? X *

(Quiz) The more the organization needs to coordinate independant parts, the more ___________________ they are.

Complicated *

(Quiz) There is a chocolate manufacturer who sell in both the US and Canada. They know that there are some differences in tastes between the two countries and have decided to make sure that they conduct the business with this in mind. Which structure should they have?

Geographic division

(Quiz) Having two bosses is a drawback for the _______________________ structure.

Matrix

(Quiz) A seemingly simple design structure where the parts are multifunctional is:

Front/back *

(Quiz) Considering how the internet has changed how we do business, the structure that seems most responsive to rapid change is:

Network

(Quiz) Many of the traditional structures suffer from this one big problem:

Duplication of activities

(Quiz) When the grouping doesn't fulfill the strategy completely, it can be supplemented by

Linking V

(Quiz) A strategy can be decided upon and then the structure designed by leadership, but the most important design changes stem from what?

The external environment