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Top Management Role in OrganizationTop Management Role in Organization
Direction, Design, and EffectivenessDirection, Design, and Effectiveness
CEO, Top
Management
Team
External Environment
Opportunities
Threats
Uncertainty
Resource Availability
Internal Situation
Strengths
Weaknesses
Distinctive Competence
Leadership Style
Past Performance
Strategic Direction
Organization
Design
Effectiveness
Outcomes
Define
mission,
official
goals
Select
operational
goals,
competitive
strategies
Resources
Efficiency
Goal attainment
Competing values
Structural Form
learning vs.efficiency
Information and
control systems
Production
technology
Human resource
policies,
incentives
Organizationalculture
Interorganizational
linkages
Source: Adapted from Arie Y. Lewin and Carroll U. St ephens,
Individual Properties of the CEO as Dete rminants of OrganizationDesign, unpublished manuscript, Duke University, 1990; and Arie Y. Lewin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
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Organizational PurposeOrganizational Purpose
MissionMission
Operative GoalsOperative GoalsOverall PerformanceOverall Performance
ResourcesResources
MarketMarket
Employee DevelopmentEmployee Development
Innovation and ChangeInnovation and ChangeProductivityProductivity
The Importance of GoalsThe Importance of Goals
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Goal Type and PurposeGoal Type and Purpose
Type of Goals Purpose of Goals
Official Goals, mission: Legitimacy
Operative goals: Employee direction and motivation
Decision guidelines
Standard of performance
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Porters Competitive StrategiesPorters Competitive Strategies
BMW
Mercedes
Focused
DifferentiationUniquenessNarrow
SubhikshaFocused Low-Cost
LeadershipLow CostNarrow
Starbucks
Coffee Co.DifferentiationUniquenessBroad
Dell Computer
Air Deccan
Big Bazaar
Low-Cost
LeadershipLow CostBroad
ExampleStrategy
Competitive
Advantage
Competitive
Scope
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Miles and SnowsMiles and Snows
Strategy TypologyStrategy Typology
ProspectorProspector Learning orientation; flexible, fluid, decentralizedLearning orientation; flexible, fluid, decentralized
structurestructure
Strong capability in researchStrong capability in research Values creativity, risk-taking, and innovationValues creativity, risk-taking, and innovation
DefenderDefender Efficiency orientation; centralized authority and tightEfficiency orientation; centralized authority and tight
cost controlcost control Emphasis on production efficiency, low overheadEmphasis on production efficiency, low overhead
Close supervision; little employee empowermentClose supervision; little employee empowermentSource: 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
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Miles and SnowsMiles and Snows
Strategy Typology (contd)Strategy Typology (contd)
AnalyzerAnalyzer Balances efficiency and learning; tight costBalances efficiency and learning; tight cost
control with flexibility and adaptabilitycontrol with flexibility and adaptability
Efficient production for stable product lines;Efficient production for stable product lines;emphasis on creativity, research, risk-taking foremphasis on creativity, research, risk-taking forinnovationinnovation
ReactorReactor No clear organizational approach; designNo clear organizational approach; design
characteristics may shift abruptly depending oncharacteristics may shift abruptly depending oncurrent needscurrent needs
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
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Contingency FactorsContingency Factors
Affecting Organization DesignAffecting Organization Design
Strate
gy
Environment TechnologySize/
LifeCycle Culture
Organizational Structure and Design
The Right Mix of Design Characteristics Fits the Contingency Factors
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Contingency Approaches to theContingency Approaches to the
Measurement of OrganizationalMeasurement of Organizational
EffectivenessEffectiveness
Organization
Internal
activities
and
processes
Resource
Inputs
Product and
Service
Outputs
Resource-based
approach
Internal
process
approach
Goal
approach
External Environment
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Reported GoalsReported Goals
of U.S. Corporationsof U.S. Corporations
Goa l % Cor por at ionsProfitability 89
Growth 82
Market Share 66Social Responsibility 65
Employee welfare 62
Product quality and service 60
Research and development 54
Diversification 51Efficiency 50
Financial stability 49
Resource conservation 39
Management development 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 ofFour Models of
Effectiveness ValuesEffectiveness Values
Human Relations Emphasis
Primary Goal: human resource
development
Subgoals: cohesion, morale, training
Internal Process Emphasis
Primary Goal: stability, equilibrium
Subgoals: information management,
communication
Rational Goal Emphasis
Primary Goal: productivity, efficiency,profit
Subgoals: planning, goal setting
Open Systems Emphasis
Primary Goal: growth,
resource acquisition
Subgoals: flexibility, readiness,
external evaluation
Flexibility
Control
Internal External
STRUCTURE
F
O
C
U
S
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 ShiftingCriteria of Effectiveness: Some Preliminary Evidence,
Management Science 29 (1983): 33-51.
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Contingency EffectivenessContingency Effectiveness
ApproachesApproaches
Goal ApproachesGoal ApproachesIndicatorsIndicators
UsefulnessUsefulness
Resource Based ApproachResource Based ApproachIndicatorsIndicators
UsefulnessUsefulness
Internal Process ApproachInternal Process Approach IndicatorsIndicators
UsefulnessUsefulness
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ORGANIZATION
B
ORGANIZATION
A
Effectiveness ValuesEffectiveness Values
for Two Organizationsfor Two Organizations
Human Relations
Emphasis
Internal ProcessEmphasis
RationalGoalEmphasis
Open Systems
Emphasis
STRUCTURE
FO
C
U
S
FLEXIBILITY
CONTROL
INTERNAL EXTERNAL
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Identifying CompanyIdentifying Company
Goals and StrategiesGoals and Strategies
Company #3
Company #2
Company #1
Strategies
from Porter
Goals from
Exhibit 2.8
Workbook
Activity
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Competing Values andCompeting Values and
Organizational EffectivenessOrganizational Effectiveness
Workshop
Activity
Goal or
subgoal
Performance
Gauge
How to
measure
Source of
data
What do you
consider
effective?
(Example)
Equilibrium
Turnover
rates
Compare
percentages
of workers
who left HRM files
25%
reduction in
first year
1
Open
System 2
3
Human
Relations 4
5
Internal
Process 6
7
Rational
Goal 8
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