Last Updated 28 Jul 2021

Implementing Strategy Through Organizational Design

Category Strategy
Essay type Process
Words 208 (1 page)
Views 104
Table of contents

Organizational Design

The process through which managers select the combination of organizational structure and control systems that they believe will enable the company to create and sustain a competitive advantage.

Into functions and divisions

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  • Integration – coordinate people and functions
  • To accomplish organizational goals and tasks
  • Tall structure (7 – 10 levels)
  • Flat structure (2 – 4 levels)

Decentralization

  1. Delegate decision making authority to middle and lower level managers
  2. Adapt to local conditions. Promotes flexibility
  3. Fewer managers needed

Centralization

  1. Facilitates coordination and planning
  2. Decisions fit broad organizational objectives

Management Policy

Guidelines for decision making are made at highest levels And passed down to lower levels

Horizontal Differentiation

How to group tasks and activities to meet strategies

Functional Structure

Most U. S. firms have a functional structure

Advantages

  • Good place to learn
  • Easy to control
  • Effective and efficient

Disadvantages

  • Geographical diversion causes duplication of people and costs
  • Communication problems
  • Measurement problems
  • Location problems
  • Strategic problems

Product Structure

  • Group by product line.
  • Product Team structure
  • Matrix Management
  • Concurrent Design Methodology
  • Cross-functional teams

Integration and Organizational Control

Forms in Integrating Mechanisms

  1. Direct contact
  2. Interdepartmental liaison roles
  3. Temporary task forces – ad hoc committees
  4. Permanent teams – standing committees
  5. Integrating roles
  6. Differentiation and Integration

The Nature of Organizational Control

  1. Monitor
  2. Evaluate
  3. Compare actual to goals
  4. Take corrective action

Organizational Culture

  • Values – beliefs and goals
  • Norms – Expectations for behavior
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