Strategy, organization design and Effectiveness
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ORGANISATION STRUCTURE,
THEORY & DESIGN
Submitted To: Prof. Alpha Lokhande
STRATEGY, ORGANISATION
DESIGN & EFFECTIVENESS
GROUP MEMBERS
NISHA SALIAN 014122 PRIYANKA SHAH 014128 NAZNEEN SHEIKH 014137 ANIES VARGHESE 014164
STRATEGY Strategy can be defined as the determination of
the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.
The term is derived from the Greek word for generalship or leading an army.
A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem.
LEVELS OF STRATEGIESCorporate-level Strategy
Business-level Strategy
Functional-level Strategy
CORPORATE LEVEL STRATEGY
If an organization is in more than one business, it will need a “Corporate-level strategy”
In What set of Business should we be?
It determines the roles that each business plays in the organization.
BUSINESS-LEVEL STRATEGY
This level of strategy seeks to answer the question, How should we compete in each of our Business?
Same as that of Corporate-level.
Strategy as organization in multiple business, each division will have its own strategy that defines the product and services that they will offer.
FUNCTIONAL-LEVEL STRATEGY
It is in support of Business level Strategy.
Looks its management decisions as specific to a functional area of the organization.
It sees people and resources as an end and not means to an end.
FOUR DIMENSIONS OF CORPORATE-LEVEL STRATEGY
INNOVATION STRATEGY Marketing Differentiation Strategy
BREADTH STRATEGY COST CONTROL STRATEGY
PORTER’S COMPETITIVE STRATEGIES
Miles and Snow’s Four Strategic TypesRaymond Miles & Charles Snow classified the
organization into four strategic types: Prospectors, Defenders, Analyzers and Reactors
Managers seek to formulate strategies that are congruent with the external environment
1) Prospector: innovate, take risks, seek out new opportunities and grow
Finding and exploiting new product and market opportunities.Creativity over efficiency Examples: FedEx, Microsoft, Google
2) Defender: stability or even retrenchment (opposite to prospector)
Offer products to a narrow domainStrategy is concerned with stability and seeks
hold onto customers.They strive aggressively to prevent the
competitors to enter into their “turf”
Example: Manufacturer of Soft-soap
3) Analyzer: try to maintain a stable business while innovating on the periphery
In between the prospector and the defender
Examples: Microsoft (e.g., Win 8), IBM
4) Reactor: not really a strategy… ad-hoc response to threats and opportunities in the market
No long-term plan
Examples: Xerox and Kodak, which struggled to keep up recently
Organizational design is the way an organization is to be structured and operated by its members.
It is both a plan and process.
ORGANIZATIONAL DESIGN
ORGANIZATIONAL DESIGN
A process involving decisions about six key elements:
• Work specialization• Departmentalization• Chain of command• Span of control• Centralization and decentralization• Formalization
PURPOSES OF ORGANIZING
Divides work to be done into specific jobs and departments
Assigns tasks and responsibilities associated with individual jobs
Coordinates diverse organizational tasks Establishes relationships among individuals,
groups, and departments Establishes formal lines of authority Allocates organizational resources Cluster jobs in to units
DESIGNING ORGANIZATIONAL STRUCTURE
Work Specialization◦The degree to which tasks in the
organization are divided into separate jobs with each step completed by a different person
DEPARTMENTALIZATION BY TYPE
Functional ◦ Grouping jobs by
functions performedProduct
◦ Grouping jobs by product line
Geographical◦ Grouping jobs on
the basis of territory or geography
Process ◦ Grouping jobs on
the basis of product or customer flow
Customer◦ Grouping jobs by
type of customer and needs
Functional Departmentalization
+ Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations
+ Coordination within functional area+ In-depth specialization– Poor communication across functional areas– Limited view of organizational goals
Plant Manager
Manager,Engineering
Manager,Accounting
Manager,Manufacturing
Manager,Human Resources
Manager.Purchasing
Geographical Departmentalization
+ More effective and efficient handling of specific regional issues that arise
+ Serve needs of unique geographic markets better
– Duplication of functions– Can feel isolated from other organizational
areas
Vice President of Sales
Sales DirectorWestern Region
Sales DirectorSouthern Region
Sales DirectorCentral Region
Sales DirectorEastern Region
Product Departmentalization
+Allows specialization in particular products and services
+Managers can become experts in their industry
+Closer to customers– Duplication of functions– Limited view of organizational goals
Source: Bombardier Annual Report.
CEO.
Truck Division
Bus Division
Car Division
Process Departmentalization
+ More efficient flow of work activities
– Can only be used with certain types of products
Plant
Manager
FinishingWeavingDyeingSpinning
Customer Departmentalization
+ Customers’ needs and problems can be met by specialists
– Duplication of functions– Limited view of organizational goals
ManagerRetail Accounts
ManagerWholesale Accounts
ManagerGovernment Accounts
Director Of Sales
ORGANIZATIONAL EFFECTIVENESS
WHAT IS EFFECTIVENESS?
The degree to which objectives are achieved and the extent to which targeted problems are solved
Effectiveness means "doing the right thing”
ORGANIZATIONAL EFFECTIVENESS
“Organizational effectiveness is the concept of how effective an organization
is in achieving the outcomes the organization intends to produce.
METHODS TO MEASURING THE EFFECTIVENESS OF THE ORGANIZATION
A. Goal Approach;B. Internal Process Approach;C. System Resource
Approach;D. Strategic Approach
COMPARISON OF THE FOUR OE APPROACHESApproach Definition When Used
An organization is effective Preferred when: to the extent that:
Goal Approach it accomplishes its stated goals goals are clear, time
bound and measurable
System Resource it acquires needed resources a clear connection exists
between inputs and outputs
Strategic Approach all strategic constituencies constituencies have powerful are at least minimally
influence on the organization, satisfied
and the organization must
respond to demands
Internal Processes combines internal efficiency costs, outputs & satisfaction and affective health
are easily measurable
WHAT BENEFITS WILL IT GIVE TO THE ORGANIZATION.
Improved:
• profitability• competitiveness• customer satisfaction• management-employee
relation• communications• teamwork• employee morale• company image• revenue• work environment
Reduced:• customer complaints• warranty claims• cost• Rework
Greater:
• market share• adaptability
Increased: • Employee involvement• Employee satisfaction • Ability to attract new
customers
CONCLUSION Organizational
effectiveness is the degree of achievements of an organizational objectives.
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