Bài giảng Strategic Management - Chapter 10: Creating Effective Organizational Designs

Creating Effective Organizational Designschapter 10Organizational StructureOrganizational structure refers to formalized patterns of interactions linkingTasksTechnologiesPeopleStructure provides a balance betweenThe need for division of tasks into meaningful groupingsThe need to integrate these groupings for maximum efficiency and effectiveness10-*Organizational Structures10-*Exhibit 10.1 Dominant Growth Patterns of Large CorporationsSource: Adapted from J.R. Galbraith and R.K. Kazanjian. Strategy Implementation: Structure, Systems and Process, 2nd edition. Copyright © 1986.Organizational Structures: Simple StructureThe simple organizational structure is the oldest & most common organizational form, whereThe organization is small, with a single or very narrow product lineThe owner-manager makes most of the decisionsThe staff is an extension of the top executive’s personality10-*Organizational Structures: Functional StructureThe functional organizational structure is where the major functions of the firm are grouped internallyThe organization is small, with a single or closely related product or service, and high production volumeThe owner-manager needs specialists in various functional areasThe chief executive has responsibility for coordination & integration of the functional areas10-*Organizational Structures: Divisional StructureThe divisional organizational structure is where products, projects, or product markets are grouped internallyDivisions are relatively autonomous, consisting of products & services that are different from those of other divisionsEach division includes its own functional specialists typically organized into departmentsDivision executives help determine product-market & financial objectives10-*Organizational Structures: SBU StructureThe strategic business unit (SBU) structure is where similar products or markets are grouped into units to achieve synergyVariation on the divisional structureSynergies are achieved through related diversification – core competencies, shared infrastructures, market powerEach of the SBUs operates as a profit center10-*Organizational Structures: Holding Company StructureThe holding company structure is where businesses in a corporation’s portfolio are the result of unrelated diversificationVariation on the divisional structureSimilarities are few, so synergies are limitedOperating divisions have autonomyCorporate staffs are small & have limited involvement, relying on financial controls & incentive programs to obtain performance10-*Organizational Structures: Matrix StructureThe matrix organizational structure is where functional departments are combined with product groups on a project basisFunctional departments, product groups & geographical units are combinedIndividuals have two managersProject managers & functional managers share responsibility10-*Organizational Structures: International OperationsInternational division structureGeographic-area division structureWorldwide matrix structureWorldwide functional structureWorldwide product division structureWorldwide holding company structureMultidomestic Strategies useGlobal Strategies use10-*Organizational Structures: International OperationsA global start-up Uses inputs from around the worldSells its products & services to customers around the worldHas communication & coordination challengesHas less resources than well-established corporationsMust use less costly administrative mechanismsFrequently chooses a boundaryless organizational design10-*Organizational Structures: Boundaryless DesignsA boundaryless organizational design makes these boundaries more permeable:Vertical boundaries between organizational levelsHorizontal boundaries between functional areasExternal boundaries between the firm and its customers, suppliers, & regulatorsGeographic boundaries between locations, cultures, & marketsBoundaryless designs include barrier-free, modular, & virtual organizations10-*Organizational Structures: Boundaryless DesignsA barrier-free organization has permeable internal & external boundaries and requires:Higher level of trust and shared interestsShift in philosophy from executive development to organizational developmentGreater use of teamsFlexible, porous organizational boundariesCommunication flows & mutually beneficial relationships with both internal and external constituencies10-*Organizational Structures: Boundaryless DesignsA modular organization requires seamless relationships with external organizations:Outsources nonvital functions or non-core activities to outsidersActivates knowledge & expertise of “best in class” suppliers but retains strategic controlFocuses scarce resources on key areasAccelerates organizational learningDecreases overall costs, leverages capital10-*Organizational Structures: Boundaryless DesignsA virtual organization requires forming alliances with multiple external partners:Continually evolving network of independent companiesLinked together to share skills, costs, & access to one another’s marketsCoping with uncertainty through cooperative effortsEach gains from resulting individual & organizational learningMay not be permanent10-*Organizational Structures: Boundaryless DesignsA boundaryless organization requiresMechanisms to ensure effective coordination and integrationCommon culture and shared valuesHorizontal organizational structuresHorizontal systems and processesCommunications and information technologiesHuman resource practicesAwareness of the benefits and costs of developing lasting internal & external relationships10-*Organizational Structures: Ambidextrous DesignsAmbidextrous organizational designs address two contradictory challenges:How to maintain adaptabilityHow to achieve alignmentAmbidextrous organizationsAre aligned and efficient while they pursue modest, incremental innovationsAre flexible enough to adapt to changes in the external environment and create dramatic, breakthrough innovations10-*