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1、Chapter Twelve,Implementing Strategy in Companies That Compete in a Single Industry,12 | 2,- Michael Jordan,“Talent wins games, but teamwork wins championships.”,12 | 3,Implementing Strategy Through Organizational Design,Organizational Design is the process of selecting the right combination of orga
2、nizational structure, control systems, and culture to pursue a business model successfully.,Organizational Structure Assigns employees to specific value creation tasks and roles To coordinate and integrate the efforts of all employees Strategic Control Systems A set of incentives to motivate employe
3、es To provides feedback on performance so corrective action can be taken Organizational Culture The collection of values, norms, beliefs, and attitudes shared within an organizations To control interactions within and outside the organization,12 | 4,Implementing Strategy Through Organizational Desig
4、n,Figure 12.1,Organizational structure, control, and culture shape peoples behaviors, values, and attitudes and determine how they will implement an organizations business model and strategies.,12 | 5,Building Blocks of Organizational Structure,Grouping tasks, functions, and divisions How best to gr
5、oup tasks into functions and functions into business units or divisions to create distinctive competencies and pursue a particular strategy Allocating authority and responsibility How to allocate authority and responsibility to these functions and divisions Integration and integrating mechanisms How
6、 to increase the level of coordination or integration between functions and divisions as a structure evolves and becomes more complex,An organization structure assigns people to tasks and connects the activities of different people and functions:,12 | 6, Group Tasks, Functions and Divisions,Organiza
7、tional structure follows the range and variety of tasks that an organization pursues. Companies group people and tasks into functions and then functions into divisions. A function is a collection of people who work together and perform similar tasks or hold similar positions. A division is a way of
8、grouping functions to allow an organization to better serve its customers. Handoffs are the work exchanges between people, functions, and subunits. Bureaucratic costs result from the inefficiencies surrounding these handoffs.,Choice of structure is made on its ability to implement companys business
9、model and strategies successfully:,12 | 7, Allocating Authority and Responsibility,Organizational Structure Span of control (number of subordinates) Tall versus flat organizations Flexibility Communication problems Response time Expense Distortion of commands Decision Making: Centralized versus Dece
10、ntralized Delegating and empowering employees Requires fewer managers Reduces information overload Increases motivation and accountability Centralized decisions Easier coordination of activities Decisions fit broad organizational objectives,To economize on bureaucratic costs and effectively coordina
11、te the activities, company must develop a clear and unambiguous hierarchy of authority :,Principle of the Minimum Chain of Command: Choose hierarchy with the fewest levels of authority necessary to use organizational resources efficiently and effectively.,12 | 8,Tall and Flat Structures,Figure 12.2,
12、12 | 9, Integration and Integrating Mechanisms,Direct contact Creates a context within which managers across functions or divisions can work together Liaison roles Increases coordination Gives one manager in each function or division the responsibility for coordinating with the other Teams Use when
13、multiple functions share mutual problems,Integration and integrating mechanisms: are used to increase communication and coordination among functions and divisions,The greater the complexity of an organizations structure, the greater the need for formal coordination among people, functions, and divis
14、ions.,12 | 10,Strategic Control Systems,Characteristics of an effective control system: Flexible to allow managers to respond as necessary to unexpected events Accurate information giving a true picture of organizational performance Timely presentation of information for timely decision making,The f
15、ormal target-setting, measurement, and feedback systems to evaluate whether a company is implementing its strategy successfully,Measures should be tied to the goals of developing distinctive competencies in efficiency, quality, innovativeness, and responsiveness to customers.,12 | 11,Steps in Design
16、ing an Effective Control System,Figure 12.3,12 | 12,Levels of Organizational Control,Figure 12.4,Controls at each level should provide the basis on which managers at lower levels design their controls systems.,12 | 13,Personal Control Shape and influence the behavior of a person in a face-to-face in
17、teraction in the pursuit of a companys goals. Managers question and probe to better understand subordinates. The result is more possibilities for learning to occur and competencies to develop. Output Control Forecast appropriate performance goals for each division, department, and employee then meas
18、ure actual performance relative to these goals . The achievement of these goals is a sign that the companys strategy is working. Behavior Control Establish a system of rules and procedures to direct the actions or behavior of divisions, functions, or individuals. The result is standardization, predi
19、ctability, and accuracy.,Types of Strategic Control Systems,12 | 14,Using Information Technology,Behavior control IT standardizes behavior through the use of a consistent, cross-functional software platform. Output control IT allows all employees or functions to use the same software platform to pro
20、vide information on their activities. Integrating mechanism IT provides people at all levels and across all functions with more information.,12 | 15,Organizational socialization how people learn the culture so that they become organization members. Strategic leadership style established by the found
21、er and transmitted to the companys managers. The culture becomes more distinct as the organizations members become more similar. Strong and adaptive cultures are innovative, encourage and reward initiative, and have common values: Bias for action autonomy, entrepreneurship, and risk-taking Organizat
22、ions mission sticks to its knitting and business model How to operate the organization motivate employees to do .their best,Organizational Culture is the specific collection of values and norms shared by people in the organization.,Organizational Culture,12 | 16,Building Distinctive Competencies at
23、the Functional Level,Functional Structure advantages: People doing similar functions can learn from one another. People can monitor each other and improve work processes. Managers have greater control over organizational activities. Managing is easier with separately managed specialized groups. Role
24、 of Strategic Control Managers and employees can monitor and improve operating procedures. Easier to apply output control. Developing Culture Managers must implement functional strategy and develop incentive systems to allow each function to succeed.,Most companies group people and tasks around a fu
25、nctional structure on the basis of their common expertise or because they use the same resources.,12 | 17,Functional Structure,Figure 12.5,12 | 18,Functional Structure and Bureaucratic Costs,Communications problems Stem from differences in goal orientations and outlooks Measurement problems Difficul
26、ties measuring contribution as product range widens Customer problems Satisfying customer needs and coordinating value-chain functions Location problems Functional structure not the best way to handle regional diversity when selling or producing in multiple locations Strategic problems These problem
27、s mean a company has outgrown its structure. Consider a more complex structure or outsourcing options.,Whenever different functions work together, bureaucratic costs arise because of communication and measurement problems arising from the hand-offs across the functions.,12 | 19,Implementing Strategy
28、 in a Single Industry,Effective strategy implementation and organization design at the business level: Increases differentiation, adds value for customers, allows for a premium price Reduces bureaucratic costs associated with measurement and communications problems Effective organization design ofte
29、n means moving to a more complex structure that: Economizes on bureaucratic costs Increase revenue from product differentiation Lowers overall cost structure by obtaining economies of scope or scale,Implementation begins at the functional level; however, managers must coordinate and integrate across
30、 functions and business units.,12 | 20,Implementing Cost Leadership and Differentiation,Pursuing a cost leadership approach The aim is to become the lowest cost producer in the industry Reducing costs across all functions Lowering cost structure while preserving its ability to attract customers Cont
31、inuously monitoring for effective operation In practice, the functional structure is the most suitable for cost leadership. Implementing a differentiation approach Design organization structure around the source of distinctive competency, differentiated products, and customer groups.,12 | 21,How Org
32、anizational Design Increases Profitability,Figure 12.6,12 | 22,Product Structure: Implementing a Wide Product Line,Implementing a broad product structure: Group the overall product line into product groups. Centralize support value chain functions to lower costs. Divide support functions into produc
33、t-oriented teams who focus on the needs of one specific product group. Measure the performance of each product group separately from the others. Closely link rewards to performance of product group.,Product structure is used to solve the control problems that result from producing may different kind
34、s of products for many different market segments.,12 | 23,Nokias Product Structure,Figure 12.7,12 | 24,Market Structure: Increasing Responsiveness to Customer Groups,Increasing responsiveness to customer groups: Identify the needs of each customer group. Group people and functions by customer or mar
35、ket segments. Make different managers responsible for developing products for each group of customers. Establish market structure brings managers and employees closer to specific groups of customers.,Market structure focuses on the ability to met the needs of distinct and important sets of customers
36、 or different customer groups.,12 | 25,Market Structure,Figure 12.8,12 | 26,Geographic Structure: Expanding Nationally,Expanding nationally geographic structure More responsive to needs of regional customers Can achieve a lower cost structure and economies of scale Provides more coordination and con
37、trol than a functional structure through the regional hierarchies,Geographic regions may become the basis for grouping organizational activities when companies expand nationally through internal expansion, horizontal integration, or mergers.,12 | 27,Geographic Structure,Figure 12.9,12 | 28,Matrix St
38、ructure and Product-Team Structures,Matrix structure Value chain activities are grouped by function and by product or project Flat and decentralized Promotes innovation and speed Norms and values based on innovation and product excellence Product-team structure Tasks divided along product or project
39、 lines Functional specialists are part of permanent cross-functional teams,In fast-changing, high-tech environments, competitive success depends on fast mobilization of company skills and resources to ensure that product development and implementation meet customer needs.,12 | 29,Matrix Structure,Figure 12.10,12 | 30,Product-Team Structure,Figure 12.11,12 | 31,Focusing on a Narrow Product Line,Focusing on a narrow product line: Focusers tend to have hi
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