Bài giảng môn Quản trị kinh doanh - Chapter ten: Implementing strategy: creating effective organizational designs

Chapter TenImplementing Strategy:Creating Effective Organizational DesignsAfter studying this chapter, you should have a good understanding of:The importance of organizational structure and the concept of the “boundary-less” organization in implementing strategiesThe growth patterns of major corporations and the relationship between a firm’s strategy and its structureEach of the traditional types of organizational structure—simple, functional, divisional, and matrixThe relative advantages and disadvantages of traditional organizational structuresThe implications of a firm’s international operations for organizational structureThe different types of boundary-less organizations—barrier-free, modular, and virtual—and their relative advantages and disadvantagesLearning ObjectivesTRANSPARENCY-84Exhibit 10.1Growth Patterns of Large CorporationsPhase 1Strategy: Low revenue base; simple product-market scopeStructure: SimplePhase 2Strategy: Increase in revenues; engage in vertical integration (backward and/or forward)Structure: FunctionalPhase 3Strategy: Expand into new, related product-markets and/or geographical areasStructure: DivisionalPhase 4Strategy: Expand into international marketsStructure: International Division, Geographic Area, Worldwide Product Division, Worldwide Functional, or Worldwide MatrixTRANSPARENCY-85Functional Structure: Advantages and DisadvantagesChief Executive Officer or PresidentManager ProductionManager EngineeringManager MarketingManager R&DManager PersonnelManager AccountingLower-level managers, specialists, and operating personnelExhibit 10.2TRANSPARENCY-86Divisional Structure: Advantages and DisadvantagesChief Executive Officer or PresidentCorporate StaffDivision AGeneral ManagerDivision BGeneral ManagerDivision CGeneral ManagerManager ProductionManager EngineeringManager MarketingManager R&DManager PersonnelManager AccountingOrganized similarly to Division 1Organized similarly to Division 1Lower-level managers, specialists, and operating personnelExhibit 10.3TRANSPARENCY-87Matrix Structures: Advantages and DisadvantagesChief Executive Officer or PresidentCorporate StaffManager Administration and Human ResourcesManager ProjectsManager ManufacturingManager EngineeringManager MarketingManager Public RelationsProject AProject BProject CProject DExhibit 10.4TRANSPARENCY-88Functional, Divisional, and Matrix Structures: Advantages and DisadvantagesAdvantagesDisadvantagesPooling of specialists enhances coordination and controlCentralized decision making enhances an organizational perspective across functionsEfficient use of managerial and technical talentCareer paths and professional development in specialized areas are facilitatedDifferences in functional area orientation impede communication and coordinationTendency for specialists to develop short-term perspective and overly narrow functional orientationFunctional area conflicts may overburden top level decision makersDifficult to establish uniform performance standardsFunctional StructureExhibit 10.5AdvantagesDisadvantagesIncreases strategic and operational control, permitting corporate-level executives to address strategic issuesQuick response to environmental changesIncreased focus on products and marketsMinimizes problems associated with sharing resources across functional areasFacilitates development of general managersIncreased costs incurred through duplication of personnel, operations, and investmentDysfunctional competition among divisions may detract from overall corporate performanceDifficulty in maintaining uniform corporate imageOveremphasis on short-term performanceDivisional StructureAdvantagesDisadvantagesIncreases market responsiveness through collaboration and synergies among professional colleaguesAllows more efficient utilization of resourcesImproves flexibility, coordination, and communicationIncreases professional development through broader range of responsibilityDual reporting relationships can result in uncertainty regarding accountabilityIntense power struggles may lead to increased levels of conflictWorking relationships may be more complicated and human resources duplicatedExcessive reliance on group processes and teamwork may impede timely decision makingMatrix StructureTRANSPARENCY-89Pros and Cons of the Barrier-Free StructuresProsConsLeverages the talents of all employeesEnhances cooperation, coordination, and information-sharing among functions, divisions, SBUs, and external constituenciesEnables a quicker response to market changes through a single-goal focusCan lead to coordinated “win-win” initiatives with key suppliers, customers, and alliance partners.Difficult to overcome political and authority boundaries both inside and outside the organizationLacks strong leadership and common vision which can lead to coordination problems.Time-consuming and difficult-to-manage democratic processesLacks high levels of trust which can impede performanceExhibit 10.6TRANSPARENCY-90Pros and Cons Of Modular StructuresProsConsDirects a firm’s managerial and technical talent to the most critical activitiesMaintains full strategic control over most critical activities—core competenciesAchieves “best in class” performance at each link in the value chainLeverages core competencies by outsourcing with smaller capital commitmentEncourages information sharing and accelerates organizational learningInhibits common vision through reliance on outsidersDiminishes future competitive advantages if critical technologies or other competences are outsourcedIncreases the difficulty of bringing back into the firm activities that now add value due to market shiftsMay lead to an erosion of cross-functional skillsDecreases operational control and potential loss of control over a supplierExhibit 10.7 TRANSPARENCY-91Pros and Cons of Virtual StructureProsConsEnables the sharing of costs and skillsEnhances access to global marketsIncreases market responsivenessCreates a “best of everything” organization since each partner brings core competencies to the allianceEncourages both individual and organizational knowledge-sharing and accelerates organizational learningHarder to determine where one company ends and another begins due to close interdependencies among playersLeads to potential loss of operational control among partnersResults in loss of strategic control over emerging technologyRequires new and difficult-to-acquire managerial skillsExhibit 10.8TRANSPARENCY-92