2 strategy org design and effectiveness session 2

8/8/2019 2 Strategy Org Design and Effectiveness Session 2

1/16

Efficient performance versus Learningorganization

Strategy & Organization design

Organizational Purpose and Structural design

rgan za ona e ec veness a anceeffectiveness approach


2/16

Changing Paradigm of Org Design

Vertical Structure

Rigid Culture

Competitive

Horizontal Structure

Adaptive Culture

Collaboration

Mechanical System Paradigm Natural System Paradigm

Formal systems

Routine tasks

Strategy

Shared information

Empowered roles

Turbulent Environment Learning OrganizationStable Environment Efficient Performance


3/16

External Envr

Opportunities

Threats Resources Uncertainty

Internal Envr

Strengths Weaknesses

DistinctiveCompetence

Past Perf Leader style

TopMgt Team

Strategic Management

Define Mission, Goals Operational Goals and Strategy Selection

Org Design. Structure, Technology, Information & Control Systems,HR policies, Org Culture, Inter-organizational Linkage

Outcomes

Resources, Efficiency, Goal Attainment, Stakeholders, competing Values


4/16

Operative goals Primary task a dept/ section / individual is to perform

Overall Performance

Net income

Volume Net sales or numbers

Profitability

Resources

Material

Finance

People

Market Goals Employee Development

Innovation & Change

Productivity


5/16

Importance of Goals

Mission / Official Goals provide

Legitimacy

Operative Goals provide

Employee motivation and Direction

Decision Guidelines

Standards of Performance


6/16

Low CostRelationship

Differentiation

Broad

UniquenessLow Cost

Competitive Advantage

Spectra Interventions

r eccan

Mocha, Barista

Focused

Low CostRelationshipCall a Cool Cab

Focused

DifferentiationPalace of Wheel

Amby Valley

CompetitiveScope

Narrow


7/16

Porters Competitive Strategies

Differentiation

Learningorientation acts in a flexible loosely knit way with stronghorizontal coordination

Strong capability in research

Values and builds mechanism for customer intimacy

Rewards em lo ee creativit , risk takin and innovation

Low cost Leadership

Strong central authority

Efficiency orientation

Detailed control reporting, SOPs

Highly efficient SCM Logistics

Close supervision routine tasks and limited employee involvement


8/16

Prospector: Learning Orientation Flexible Fluid decentralizedstructure, Strong capability in research

Defender: efficiency orientation, centralized authority andtight control, low overhead, little empowerment

Miles & Snows Strategy Typology

Spectra Interventions

na yzer: a ance e c ency an earn ng, g cos con rowith flexibility and adaptability, efficient processand risk taking for innovation

Reactor no clear organizational approach Org design maychange abruptly based on current needs


9/16

Contingency Effectiveness Approach

Resource InputProduct

Service Output

Organization

ActivitiesAnd

processes

Resource Based

Approach

Internal Process

Approach

Goal

Approach


10/16

Goal ApproachIndicators Mostly organizations use multiple indicators

Market Share

Profitability

Growth

Employee welfare

Product ualit and Service

Efficiency

Resource conservation

Social responsibility

Management development

Although this approach looks logical actual measure ofeffectiveness is a complex process


11/16

Resource Based ApproachAbility of the organization is either absolute or relative termsto obtain scarce and valued resources and successfullyintegrate and manage them

Dimensions Bargaining position

Ability of org decision makers to accurately predict externalenvironment

Ability of organization to respond to change in theenvironment

Useful when goal approach is difficult to apply as in NGO orsocial sector. Also only when the output is connected to thecustomer needs


12/16

Internal Process Approach

Strong corporate culture and positive work climate

Team spirit, group loyalty and team work

Confidence, trust and communication between workers and

management

Decision making near the source of information, regardless

where the source is on chart

,

relevant feelings and facts

Rewards to manager who perform and fuel growth with

development of employees

Conflict amongst various parts resolved in the interest of the

organization

Limitation as total output and relationship to externalenvironment is not measured and many indicators will be

subjective as some internal processes are not measurable.


13/16

Balanced Effectiveness Approach

Stakeholder approach

Competing value approach


14/16

Stakeholder (constituency) Approach

Stakeholder Effectiveness Criteria

Promoters Financial return

Employees Work satisfaction, pay, supervision

Customers Quality of goods and services

Creditors CreditworthinessCommunity Contribution to society/community

Suppliers Satisfactory transactions

Government Compliance to regulations


15/16

Competing Value Approach

Human Relations Model

Goal Values :HRDSub-goals: Cohesion,Morale, training

Open Systems Model

Goal Values: GrowthResource AcquisitionsSub-goals: Readiness.External Evaluation

Structure

Flexibility

Rational Goal Model

Goal Values: efficiency

Productivity, ProfitSub Goals: Planning

Goal setting

Internal Process Model

Goals Values: Stability

EquilibriumSub-goals:

Information Mgt., commn

Control


16/16

Organization A

Internal External

Flexibility

Focus

Human RelationsModel

Open SystemsModel

Stability Control

STRUCTURE

Internal ProcessModel

Rational GoalsModel

2 strategy org design and effectiveness session 2

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