Organizational Structure,Leadership and Culture

MT-460-02MT-460-02Unit 8Unit 8Sunday, July 29Sunday, July 29thth 2012 2012Nate BoyerNate Boyer

Learning Objectives1. Identify five traditional organizational

structures and the pros and cons of each2. Describe the product-team structure

and explain why it is a prototype for a more open, agile organizational structure

3. Explain five ways improvements have been sought in traditional organizational structures

4. Describe what is meant by agile, virtual organizations

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Learning Objectives (contd.)

5. Explain how outsourcing can create agile, virtual organizations, along with its pros and cons

6. Describe boundaryless organizations and why they are important

7. Explain why organizations of the future need to be ambidextrous learning organizations

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Organizational Structure

Organizational structure refers to the formalized arrangement of interaction between and responsibility for the tasks, people, and resources in an organization

It is most often seen as a chart, often a pyramidal chart, with positions or titles and roles in cascading fashion

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Simple Organizational Structure

A simple organizational structure is one where there is an owner and a few employees and where the arrangement of tasks, responsibilities, and communication is highly informal and accomplished through direct supervision

This type of structure can be very demanding on the owner-manager

Most businesses in this country and around the world are of this type

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Functional Organizational Structure A functional organizational structure

is one on which the tasks, people, and technologies necessary to do the work of the business are divided into separate “functional” groups (such as marketing, operations, and finance) with increasingly formal procedures for coordinating and integrating their activities to provide the business’s products and services

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Ex. 11.2 Functional Organization Structures

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Divisional Structure A divisional organizational structure is

one in which a set of relatively autonomous units, or divisions, are governed by a central corporate office but where each operating division has its own functional specialists who provide products or services different from those of other divisions

This expedites decision making in response to varied competitive environments

The division usually is given profit responsibility

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Ex. 11.3 Divisional Organization Structure

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Strategic Business Unit The strategic business unit (SBU) is an

adaptation of the divisional structure whereby various divisions or parts of divisions are grouped together based on some common strategic elements, usually linked to distinct product/market differences

The advantages and disadvantages of the SBU form are very similar to those identified for divisional structures

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Holding Company Structure A final form of the divisional organization

is the holding company structure, where the corporate entity is a broad collection of often unrelated businesses and divisions such that it (the corporate entity) acts as financial overseer “holding” the ownership interest in the various parts of the company but has little direct managerial involvement

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Matrix Organizational Structure The matrix organizational

structure is one in which functional and staff personnel are assigned to both a basic functional area and to a project or product manager

The matrix form is intended to make the best use of talented people within a firm by combining the advantages of functional specialization and product-project specialization

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Ex. 11.5 Matrix Organizational Structure

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Product-Team Structure The product-team structure seeks to

simplify and amplify the focus of resources on a narrow but strategically important product, project, market, customer, or innovation

The product-team structure assigns functional managers and specialists to a new product, project, or process team that is empowered to make major decisions about their product

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Ex. 11.6 The Product-Team Structure

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Trends Affecting Organizations in the 21st Century

Globalization

The Internet

Speed

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Efforts to Improve Traditional Structures Redefine the role of corporate

headquarters from control to support and coordination

Balance the demands for control/differentiation with the need for coordination/integration

Restructure to emphasize and support strategically critical activities

Reengineer strategic business processes Downsize and self-manage

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Creating Agile, Virtual Organizations Virtual organization: a temporary

network of independent companies—suppliers, customers, subcontractors, even competitors—linked primarily by information technology to share skills, access to markets, and costs

An agile organization is one that identifies a set of business capabilities central to high-profitability operations and then builds a virtual organization around those capabilities

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Outsourcing—Creating a Modular Organization

Outsourcing is simply obtaining work previously done by employees inside the companies from sources outside the company

A modular organization provides products or services using different, self-contained specialists or companies brought together—outsourced—to contribute their primary or support activity to result in a successful outcome

Business process outsourcing (BPO) is the most rapidly growing segment of the outsourcing services industry worldwide

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Types of Boundaries Horizontal boundaries—between different

departments or functions in a firm. Vertical boundaries—between operations

and management, and levels of management, between “corporate” and “division”

Geographic boundaries—between different physical locations; between different countries or regions of the world and between cultures

External interface boundaries—between a company and its customers, suppliers, partners, regulators, and competitors

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Becoming Boundaryless Jack Welch coined the term

“boundaryless” to illustrate his vision for GE

Outsourcing, strategic alliances, product-team structures, reengineering, restructuring—all are ways to move toward boundaryless organization

Technology, particularly driven by the Internet, has and will be a major driver of the boundaryless organization

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Ex. 11.12 From Traditional Structure to B-Web Structure

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Ambidextrous Learning Organization The evolution of the virtual organizational

structure as an integral mechanism managers use has brought with it recognition of the central role knowledge plays in implementation

The shift from exploitation to exploration (Rangan) indicates the growing importance of organizational structures that enable a learning organization to allow global companies the chance to build competitive advantage

An ambidextrous organization emphasizes coordination over control as well as flexibility

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Leadership and Culture

McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives1. Describe what good organizational

leadership involves2. Explain how vision and performance

help leaders clarify strategic intent3. Explain the value of passion and

selection/development of new leaders in shaping an organization’s culture

4. Briefly explain seven sources of power and influence available to every manager

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Learning Objectives (contd.)

5. Define and explain what is meant by organizational culture, and how it is created, influenced, and changed

6. Describe four ways leaders influence culture

7. Explain four strategy-culture situations

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Strategic Leadership: Embracing Change Telecommunications, computers, the

Internet, and one global marketplace have increased the pace of change exponentially during the past 10 years

The leadership challenge is to galvanize commitment among people within an organization as well as stakeholders outside the organization to embrace change and implement strategies intended to position the organization to succeed in a vastly different future

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Clarifying Strategic Intent Leaders help their company embrace

change by setting for their strategic intent—a clear sense of where they want to lead the company and what results they expect to achieve

Leader’s vision—an articulation of a simple criterion or characterization of what the leader sees the company must become to establish and sustain global leadership

Make clear the performance expectations a leader has for the organization, and managers in it, as they seek to move toward that vision

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Building an Organization1. Education and leadership development is

the effort to familiarize future leaders with the skills important to the company and to develop exceptional leaders among the managers you employ

2. Perseverance is the capacity to see a commitment through to completion long after most people would have stopped trying

3. Principles are your fundamental personal standards that guide your sense of honesty, integrity, and ethical behavior

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Shaping Organizational Culture Passion, in a leadership sense, is a

highly motivated sense of commitment to what you do and want to do

Leaders also use reward systems, symbols, and structure among other means to shape the organization’s culture

Leaders look to managers they need to execute strategy as another source of leadership to accept risk and cope with the complexity that change brings about

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Recruiting and Developing Talented Operational Leadership

New leaders will each be global managers, change agents, strategists, motivators, strategic decision makers, innovators, and collaborators if the business is to survive and prosper

Today’s need for fluid, learning organizations capable of rapid response, sharing, and cross-cultural synergy place incredible demands on young managers to bring important competencies to the organization 12-31

Ex. 12.5 What Competencies Should Managers Possess?

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Sources of Power and InfluenceOrganizational

PowerPosition powerReward powerInformation powerPunitive power

Personal InfluenceExpert influenceReferent influencePeer influence

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Ex. 12.6 Management Processes and Levels of Management

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Organizational Culture Organizational culture is the set of

important assumptions (often unstated) that members of an organization share in common

Every organization has its own culture Assumptions become shared

assumptions through internalization among an organization’s individual members

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The Role of the Organizational Leader The leader is the standard bearer, the

personification, the ongoing embodiment of the culture, or the new example of what it should become

How the leader behaves and emphasizes those aspects of being a leader become what all the organization sees are “the important things to do and value.”

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Build Time in the Organization Some leaders have been with the

organization for a long time

Many leaders in recent years, and inevitably in any organization, are new to the top post of the organization

In the other situation, a new leader who is not an “initiated” member of the culture faces a much more challenging task

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Ethics Ethical standards are a person’s basis for

differentiating right from wrong The culture of an organization, and

particularly the link between the leader and the culture’s very nature, is inextricably tied to the ethical standards of behavior, actions, decisions, and norms that leader personifies

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Shaping Organizational Culture Emphasize key themes or dominant values Encourage dissemination of stories and legends

about core values Institutionalize practices that systematically

reinforce desired beliefs and values Adapt some very common themes in their own

unique ways Manage organizational culture in a global

organization: Social norms Values and attitudes Religion Education

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Ex. 12.9 Managing the Strategy-Culture Relationship

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Manage the Strategy-Culture Relationship

Link to mission

Maximize synergy

Manage around the culture

Reformulate strategy or culture

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MT460: Management Policy and Strategy MT460: Management Policy and Strategy Unit 1: Introductions and Your SWOT Analysis Unit 1: Introductions and Your SWOT Analysis

Final Project Guidelines: Strategic Plan Final Project Guidelines: Strategic Plan A strategic plan is designed to be in use for three (3) to five (5) years or A strategic plan is designed to be in use for three (3) to five (5) years or

more. For your individual Final Project, you will write a strategic plan more. For your individual Final Project, you will write a strategic plan using the following information. using the following information.

Background: Background: Identify the organization that you have chosen for your strategic plan. Identify the organization that you have chosen for your strategic plan. Provide a brief background of this organization including its products, Provide a brief background of this organization including its products, services and customers. Include the organization’s strategic planning services and customers. Include the organization’s strategic planning model (including the history of successes and failures associated with model (including the history of successes and failures associated with

the process). the process). Mission Statement & Vision Statement: Mission Statement & Vision Statement:

How does the mission, vision and values aid to the organization in How does the mission, vision and values aid to the organization in reaching its desired end state? Include the mission statement and reaching its desired end state? Include the mission statement and

vision statement and refer to it in your analysis.vision statement and refer to it in your analysis.

Final Project GuidelinesFinal Project Guidelines

Internal Analysis & External Analysis: Internal Analysis & External Analysis: Create an assessment of the organization including their ability Create an assessment of the organization including their ability

to accomplish goals and objectives as set in their previous to accomplish goals and objectives as set in their previous strategic plan(s) and, their ability to respond to internal and strategic plan(s) and, their ability to respond to internal and

external changes and challenges. external changes and challenges.

Long Term Objectives: Long Term Objectives: Designate the long term objectives in your strategic plan.Designate the long term objectives in your strategic plan.

Strategy Analysis and ChoiceStrategy Analysis and Choice: :

Choose the generic strategy and grand strategy. Discuss why Choose the generic strategy and grand strategy. Discuss why you have chosen each and how they will fit within the you have chosen each and how they will fit within the

framework of the organizationframework of the organization

Plan Goals and Implementation: Plan Goals and Implementation: Discuss the goals and implementation for the business strategy. Discuss the goals and implementation for the business strategy.

Include in this discussion the organizational structure and the Include in this discussion the organizational structure and the leadership and culture. leadership and culture.

Critical Success Factors: Critical Success Factors: Describe the critical success factors. Describe the critical success factors.

Controls and Evaluation: Controls and Evaluation: List and describe controls and evaluation methods. List and describe controls and evaluation methods.

Include a short Include a short Introduction Introduction and and Conclusion Conclusion in this final in this final project PowerPoint presentation assignment. Utilize project PowerPoint presentation assignment. Utilize APA APA citation, format, and style. The paper should be ten (10) citation, format, and style. The paper should be ten (10) to twelve (12) slides; if more, feel free to include them. to twelve (12) slides; if more, feel free to include them. Indent all paragraphs and utilize titles / subtitles in the Indent all paragraphs and utilize titles / subtitles in the

Notes portion of the slides i.e. information sections Notes portion of the slides i.e. information sections provided above. Use a formal title and References page provided above. Use a formal title and References page per APA. When completed with the Final Project, submit per APA. When completed with the Final Project, submit your paper to the your paper to the Dropbox Dropbox under under Unit 9 Final Project Unit 9 Final Project in in

a a PowerPoint PowerPoint .ppt or pptx document. .ppt or pptx document.