Transcript CH02.ppt
Chapter Two Strategy, Organization Design, and Effectiveness
Thomson Learning © 2004 2-1
Top Management Role in Organization Direction, Design, and Effectiveness
External Environment Opportunities Threats Uncertainty Resource Availability CEO, Top Management Team Strategic Direction Define mission, official goals Select operational goals, competitive strategies Internal Situation Strengths Weaknesses Distinctive Competence Leadership Style Past Performance
Source:
Adapted from Arie Y. Lewin and Carroll U. Stephens, “Individual Properties of the CEO as Determinants of Organization Design,” unpublished manuscript, Duke University, 1990; and Arie Y. Lewin and Carroll U. Stephens, “CEO Attributes as Determinants of Organization Design: An integrated Model,”
Organization Studies
15, no. 2 (1994): 183-212 Thomson Learning © 2004 Organization Design Structural Form – learning vs.
efficiency Information and control systems Production technology Human resource policies, incentives Organizational culture Interorganizational linkages Effectiveness Outcomes Resources Efficiency Goal attainment Competing values 2-2
Goal Type and Purpose Type of Goals Purpose of Goals
Official Goals, mission: Legitimacy Operative goals: Employee direction and motivation Decision guidelines Standard of performance Thomson Learning © 2004 2-3
Porter’s Competitive Strategies
Competitive Scope Broad Broad Narrow Narrow Competitive Advantage Low Cost Strategy Low-Cost Leadership Uniqueness Low Cost Uniqueness Differentiation Focused Low-Cost Leadership Focused Differentiation Thomson Learning © 2004 Example Dell Computer Starbucks Coffee Co.
Enterprise Rent-a- Car Edward Jones Investments 2-4
Miles and Snow’s Strategy Typology Prospector
Learning orientation; flexible, fluid, decentralized structure Strong capability in research Values creativity, risk-taking, and innovation
Defender
Efficiency orientation; centralized authority and tight cost control Emphasis on production efficiency, low overhead Close supervision; little employee empowerment Source: Based on Michael Treacy and Fred Wiersema, “How Market Leaders Keep Their Edge,”
Fortune
February 6, 1995, 88-98; Michael Hitt, R. Duane Ireland, and Robert E. Hoskisson,
Strategic Management
(St. Paul, Minn.: West, 1995), 100-113; and Raymond E. Miles, Charles c. Snow, Alan D. Meyer, and Henry L. Coleman, Jr., “Organizational Strategy, Structure, and Process,”
Academy of Management Review
3 (1978), 546-562 Thomson Learning © 2004 2-5
Miles and Snow’s Strategy Typology (cont’d)
Analyzer
Balances efficiency and learning; tight cost control with flexibility and adaptability Efficient production for stable product lines; emphasis on creativity, research, risk-taking for innovation
Reactor
No clear organizational approach; design characteristics may shift abruptly depending Source: Based on Michael Treacy and Fred Wiersema, on current needs
Strategic Management
(St. Paul, Minn.: West, 1995), 100-113; and Raymond E. Miles, Charles c. Snow, Alan D. Meyer, and Henry L. Coleman, Jr., “Organizational Strategy, Structure, and Process,”
Academy of Management Review
3 (1978), 546-562 Thomson Learning © 2004 2-6
Contingency Factors Affecting Organization Design
Organizational Structure and Design The Right Mix of Design Characteristics Fits the Contingency Factors Thomson Learning © 2004 2-7
Contingency Approaches to the Measurement of Organizational Effectiveness External Environment Resource Inputs Organization Internal activities and processes Product and Service Outputs Resource-based approach Internal process approach Thomson Learning © 2004 Goal approach 2-8
Reported Goals of U.S. Corporations
Goal Profitability Growth Market Share Social Responsibility Employee welfare Product quality and service Research and development Diversification Efficiency Financial stability Resource conservation Management development % Corporations 89 82 66 65 62 60 54 51 50 49 39 35
Source:
Adapted from Y. K. Shetty, “New Look at Corporate Goals,”
California Management Review
22, no. 2 (1979), pp. 71-19.
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Four Models of Effectiveness Values
STRUCTURE Flexibility Human Relations Emphasis F O C U S Internal Primary Goal: human resource development Subgoals: cohesion, morale, training Internal Process Emphasis Primary Goal: stability, equilibrium Subgoals: information management, communication Control Adapted from Robert E. Quinn and John Rohrbaugh, “A Spatial Model of Effectiveness Criteria: Toward a Competing Values Approach to Organizational Analysis,”
Management Science
29 (1983): 363-377; and Robert E. Quinn and Kim Cameron, “Organizational Life Cycles and Shifting Criteria of Effectiveness: Some Preliminary Evidence,”
Management Science
29 (1983): 33-51.
Thomson Learning © 2004 Open Systems Emphasis Primary Goal: growth, resource acquisition Subgoals: flexibility, readiness, external evaluation Rational Goal Emphasis Primary Goal: productivity, efficiency, profit Subgoals: planning, goal setting External 2-10
Effectiveness Values for Two Organizations
STRUCTURE FLEXIBILITY Human Relations Emphasis F O C U S INTERNAL ORGANIZATION A Internal Process Emphasis ORGANIZATION B CONTROL Open Systems Emphasis EXTERNAL Rational Goal Emphasis Thomson Learning © 2004 2-11
Workbook Activity
Identifying Company Goals and Strategies
Goals from Exhibit 2.8
Company #1 Strategies from Porter Company #2 Company #3 Thomson Learning © 2004 2-12
Workshop Activity
Competing Values and Organizational Effectiveness
Goal or subgoal (Example) Equilibrium Open System Human Relations Internal Process Rational Goal 5 6 7 8 1 2 3 4 Performance Gauge Turnover rates How to measure Compare percentages of workers who left Source of data What do you consider effective?
HRM files 25% reduction in first year Thomson Learning © 2004 2-13