ch17
TRANSCRIPT
Why are strategy and organizational learning important?
What is organizational design and how is it linked to
strategy?
How does technology influence organizational design?
How does the environment influence organizational
design?
How should the whole organization be led strategically?
Copyright © 2012 John Wiley & Sons, Inc. 17-2
Strategy
The process of positioning the organization
in the competitive environment and
implementing actions to compete
successfully.
17-3Copyright © 2012 John Wiley & Sons, Inc.
Strategy process
Is ongoing.
Should involve individuals at all levels of the firm.
Strategy and co-evolution
Co-evolution is a process.
Strategy as a pattern of decisions
Second aspect of strategy.
17-4Copyright © 2012 John Wiley & Sons, Inc.
Organizational learning Process of acquiring knowledge and using
information to adapt successfully to changing
circumstances through:
Information distribution
Information interpretation
Organizational retention
17-5Copyright © 2012 John Wiley & Sons, Inc.
17-6Copyright © 2012 John Wiley & Sons, Inc.
Vicarious learning
Involves capturing the lesson of others’
experiences.
17-7Copyright © 2012 John Wiley & Sons, Inc.
Scanning Involves looking outside
the firm and bringing
back useful solutions.
GraftingThe process of acquiring individuals, units,
or firms to bring in useful knowledge.
17-8Copyright © 2012 John Wiley & Sons, Inc.
Avenues for knowledge retention:
Individuals
Documents
Internal information systems
External archives
Formal structures
Physical structures (ecology)17-9Copyright © 2012 John Wiley & Sons, Inc.
Organizational design
The process of choosing and implementing
a structural configuration.
17-10Copyright © 2012 John Wiley & Sons, Inc.
17-11Copyright © 2012 John Wiley & Sons, Inc.
Organizational size Large firms have many
core operations
technology in a wide
variety of much more
specialized units.
The design of small
firms is directly
influenced by core
operations technology.
17-12Copyright © 2012 John Wiley & Sons, Inc.
Simple design
A configuration involving one or two ways
of specializing individuals and units.
Vertical specialization and control
emphasize levels of supervision without
elaborate formal mechanisms.
17-13Copyright © 2012 John Wiley & Sons, Inc.
Operations technology
The combination of resources, knowledge, and
techniques that creates a product or service.
Information technology
The combination of machines, artifacts,
procedures, and systems used to gather,
store, analyze, and disseminate information
for translating it into knowledge
17-14Copyright © 2012 John Wiley & Sons, Inc.
Thompson’s view of technology
Classification according to the degree of
specification and degree of
interdependence among work activities.
17-15Copyright © 2012 John Wiley & Sons, Inc.
Intensive technology Uncertainty as to how to produce desired outcomes.
Requires assistance of specialists.
Mediating technology Links parties that want to become interdependent.
Long-linked technology Production method is known and broken down into a
number of sequential steps.
17-16Copyright © 2012 John Wiley & Sons, Inc.
Woodward’s view of technology
Small-batch production.
Mass production.
Continuous-process technology.
17-17Copyright © 2012 John Wiley & Sons, Inc.
An adhocracy is characterized by:
Few rules, policies, and procedures.
Substantial decentralization.
Shared decision making among members.
Extreme horizontal specialization.
Few levels of management.
Virtually no formal controls.17-18Copyright © 2012 John Wiley & Sons, Inc.
An adhocracy is useful when:
The tasks facing the firm vary considerably
and provide many exceptions.
Problems are difficult to define and solve.
17-19Copyright © 2012 John Wiley & Sons, Inc.
Why IT makes a difference
IT provides a partial
substitute for:
Operations
Process controls
Methods of coordination
IT provides a strategic
capability.
17-20Copyright © 2012 John Wiley & Sons, Inc.
IT as a substitute
Initial implementation of IT often displaces
routine, highly specified, and repetitious
jobs.
A second wave of implementation replaces
process controls and informal coordination
mechanisms.
17-21Copyright © 2012 John Wiley & Sons, Inc.
IT adds capability Combines computer-aided design (CAD) with
computer-aided manufacturing to yield an
automated manufacturing cell.
Provides complex decision-support systems for
middle and lower managers with programs to
aid in analyzing complex problems.
Empowers individuals, expanding their jobs and
making them both interesting and challenging.
17-22Copyright © 2012 John Wiley & Sons, Inc.
Virtual organization
An ever-shifting constellation of firms, with
a lead corporation, that pools skills,
resources, and experiences to thrive
jointly.
Partner firms are bound by mutual trust
and need for collective survival.
17-23Copyright © 2012 John Wiley & Sons, Inc.
General environment
The set of cultural, economic, legal-political, and
educational conditions found in the areas in
which the organization operates.
Specific environment
The owners, suppliers, distributors, government
agencies, and competitors with which an
organization must interact to grow and survive.
17-24Copyright © 2012 John Wiley & Sons, Inc.
17-25Copyright © 2012 John Wiley & Sons, Inc.
Environmental richness
The environment is richer when the
economy is growing, when individuals are
improving their education, and when
everyone that the organization relies upon
is prospering.
17-26Copyright © 2012 John Wiley & Sons, Inc.
Environmental interdependence
Linkage between environmental
interdependence and organization design
may be subtle and indirect.
Organization may co-opt powerful outsiders
by including them on governing boards.
Develop centralized staff department to
handle an important external group.
17-27Copyright © 2012 John Wiley & Sons, Inc.
Environmental uncertainty and
volatility
A more organic structure is the appropriate
organizational design response to
uncertainty and volatility.
17-28Copyright © 2012 John Wiley & Sons, Inc.
In a complex global economy, firms must
learn to co-evolve by altering their
environment.
Two important ways of co-evolution:
Management of networks
Development of alliances
17-29Copyright © 2012 John Wiley & Sons, Inc.
Inter firm alliances
Cooperative agreements or joint ventures
between two independent firms.
Often, these agreements involve corporations
that are headquartered in different nations.
A strategy that is often used in high-
technology industries.
17-30Copyright © 2012 John Wiley & Sons, Inc.
Strategic leadership
The study of leading a quasi-
independent unit, department, or
organization.
Research suggests top-management
teams, as a group, are important to
strategic leadership.
17-31Copyright © 2012 John Wiley & Sons, Inc.
Strategic leadership challenges
Complexity of leadership varies at different
levels.
Cognitive complexity - deals with the degree to
which individuals perceive nuances and subtle
differences.
Behavioral complexity – centers on the possession
of a repertoire of roles and the ability to selectively
apply them.17-32Copyright © 2012 John Wiley & Sons, Inc.
Composition of the top management team can alter choices made in the
organization through:
Collective nature
Temperament
Outlook, and
Interaction among team members
Composition of a top-management team can have a major influence on how
an organization operates in terms of:
Shared culture
Decision-making and management styles, and
Ethical foundation of day-to-day workplace behaviors
17-33Copyright © 2012 John Wiley & Sons, Inc.
17-34Copyright © 2012 John Wiley & Sons, Inc.
Organizational competencies linked to
strategic leadership
Absorptive capacity – The ability to learn.
Adaptive capacity – The ability to change.
Managerial wisdom – The ability perceive
variation in the environment and understand the
social actors and their relationships.
18-35Copyright © 2012 John Wiley & Sons, Inc.