BA 550 2 Org Design

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ORGANIZATION

MANAGEMENT

Organizational Design

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McKinsey 7-S Model

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals

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McKinsey 7-S Model

Strategy

Structure

Systems Style

Staff

Skills

Superordinate goals

The hard elements are factualand easy to identify. They can befound in strategy statements,corporate plans, organizationcharts, and other documentation

The Hard Ss

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McKinsey 7-S Model

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals

The soft elementsare difficult todescribe since theyare continuously

developing andchanging. They arehighly determined bythe people at work inthe organization.

The Soft Ss

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7-S ModelThe Hard Ss

Strategy Actions a company plans in response to or in anticipation of

changes in its external environment

Structure Basis for specialization and coordination, influenced

primarily by strategy and by organization size and diversity

Systems Formal and informal procedures that support the strategy

and structure (Systems are more powerful than they aregiven credit)

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals

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Organizational Structure

Organization Chartformal reporting relationships

levels in hierarchyspans of control

departmentalization

Systems to facilitate:coordination

communication

integration

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals

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Structural Designs

Functional Structure Can adapt functional structure

with horizontal linkages

Divisional Structure

Geographical Structure

Matrix Structure

Horizontal Structure /

Product Line Structure

Hybrid Structure

Chief

Accountant

Budget

Analyst

Vice PresidentFianance

Plant

Superintendent

Maintenance

Superintendent

Vice PresidentManufacturing

Training

Specialist

Benefits

Administrator

DirectorHuman Resources

CEO

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals

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Other Organizational Forms

Joint Ventures

Licensing agreements

Strategic Alliances

Consortia

Virtual organizations

Global (transnational) Work Teams

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals

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Virtual Teams

Virtual Teams are characterized by:Distributed locations of team members

Use of information technology to accomplish tasks

Effective when: Communication & collaboration skills are high.

Trust among team members is high

Organizations are increasing their use of

virtual teams Potential for improvement in virtual team

management is huge

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals

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Information Linkages

Vertical Information LinkagesHierarchy

Rules and plans (i.e. budget)

Horizontal Information Linkages Information systems

Liaison role

Task force

Integrator role (i.e. Project manager)

Cross-functional teams

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals

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Ladder of Mechanisms for

Horizontal Linkage and Coordination

HIGHLOW

LOW Information Systems

Direct Contact

Task Forces

Full-time Integrators

Teams

Amou

ntofHorizontal

CoordinationRequired

Cost of Coordination in

Time and Human Resources

H IGH

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Systems various elements

Communications practice and system

Management reporting system

Approval process Planning/budgeting system

Rewards system including appraisal

Rules

Strategy

Structure

Systems

Style

Staff

Skills Superordinate goals

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From Tasks to Structure

Tasks define jobs

Jobs define skills required

Skills (and other considerations) definestaff

Over time skills change as staff gainsknowledge and experience, and as technology

and corporate infrastructure mature Collection of jobs basis for structure

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals

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Job design considerations

Do they have the necessary skills andknowledge to fulfill proposed / expandedjob requirements?

What are the needs of the incumbent or

the rest of your workforce in general? Monetary

Growth

Socialization

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals

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7-S ModelThe Soft Ss - 1

Style / CultureThe culture of the organization, consisting of Organizational culture: the dominant values, beliefs and

norms which develop over time and become relativelyenduring features of organization life

Management style: what managers do rather than what theysay (where they spend their time and attention, what theyallow, what they reward, etc)

Staff

Skills

Shared values /Superordinate goals

Strategy

Structure

Systems

Style

Staff

Skills Superordinate goals

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7-S ModelThe Soft Ss - 2

Style / Culture

Staff The people/human resource management ways of shaping

basic management values, processes used to develop

managers, ways of introducing new employees andmanaging careers, socialization processes

Skills Distinctive competencies what the company does best,

ways of developing or shifting competencies

Shared values / Superordinate goals Guiding concepts, fundamental ideas around which a

business is built simple, usually stated at abstract level,have great meaning inside the organization, althoughoutsiders may not see or understand them

Strategy

Structure

Systems

Style

Staff

Skills Superordinate goals

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Organizational Culture

Culture is to organizations whatpersonality is to individuals

All companies have cultures

Culture by default

Culture by design thoughtful choicesbased on values and core beliefs

How does a company consciously createits culture?

Strategy

Structure

Systems

Style

Staff

Skills Superordinate goals

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From Gray & Larson Project Management:

The Managerial Process

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Types of Organizational Cultures

Control culturesDrive for predictability and order

Collaboration cultures

Pursue close relationship with customers

Competence culturesPursue excellence and innovation

Cultivation culturesPursue life enrichment for customers and employees

Strategy Structure

Systems

Style

Staff

Skills

Superordinate goals

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Organizational Culture

Observable Evidence: Symbols

Ceremonies

Stories

Behaviors

Language

Dress

Underlying Roots: Values, Assumptions, Beliefs, Attitudes, Feelings

Strategy

Structure

Systems

Style

Staff

Skills Superordinate goals

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Culture in practice

Conflict management Relationship or interpersonal conflict

Task / process conflict

Functional vs. dysfunctional conflict

Factors: goal incompatibility, limited resources,differences

Powerthe capacity to influence behavior Positional power: rewards/consequences, control

of resources, information and decision control Personal power: expert, referent (based on

identification and admiration)

Politics the use of power to influence decisions

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals

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Planning & vs. Setting thebudgeting direction

Organizing & vs. Aligning peoplestaffing

Controlling & vs. Motivating people

problem solving

Management vs. Leadership

Management is about coping with complexityLeadership is about coping with change

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Management vs. Leadership

Some managers (but not all) are leaders

Some leaders (but not all) are good managers

A manager gets work done through the efforts

of other people Includes planning, organizing, motivating, and

controlling

A leader creates and realizes a vision

Communicates that vision and moves theorganization toward that vision Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals

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McKinsey 7-S Model

Strategy

Structure

Systems Style

Staff

Skills Superordinate goals

Effective organizationsachieve a harmony

between these sevenelements; if oneelement changes, thenthis will affect all the

others

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McKinsey 7-S Model

The 7-S Model can be avaluable tool to initiatechange processes andto give them direction;i.e. determine currentstate and ideal state ofeach element, and

develop action plans toclose the gaps

Strategy

Structure

Systems Style

Staff

Skills Superordinate goals

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McKinsey 7-S Model

In change processes,many organizationsfocus their efforts on

the hard Ss; however,the soft factors canmake or break asuccessful changeprocess. All factorsmust be accounted for.

Strategy

Structure

Systems Style

Staff

Skills Superordinate goals

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McKinsey 7-S Model

Interrelated

Equilibrium

Foundation ofcorporate culture

Levers available to

management

Strategy

Structure

Systems Style

Staff

Skills Superordinate goals

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Executing Change

Seven Key Considerations Strategic Intent

Substance

Scale

Scope/Breadth

Speed

Sequence Style

Style

Scope Substance

Speed

Sequence

Scale

StrategicIntent

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Strategic Intent

Substance

Scale

Scope/Breadth

Speed

Sequence

Style

Style

Scope Substance

Speed

Sequence

Scale

StrategicIntent

Precise Broad

Soft Ss Hard Ss

Small Large

Isolated Organization-wide

Slow Fast

Hard Soft Soft Hard

Top Down Bottom Up

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Assignment

Read BA 550 class packet:Turning Great Strategy into Great Performance

Governance and Strategy Implementation

Case brief AmerichemLast names beginning with A M

Complete proposal on term project