© colin boyd 2002strategic analysis organization structure and business strategy colin boyd...

© Colin Boyd 2002Strategic Analysis

Organization Structure and Business Strategy

Colin BoydProfessor of Management

University of Saskatchewan


Moses and the organization of the Israelitesfleeing to the Promised Land

AgricultureMoses

BankingMoses

BaptismMoses

BarteringMoses

The LeaderMoses

ConstructionMoses

CommunicationMoses

ComplaintsMoses

ClothingMoses

CraftsMoses

BankingMoses

BaptismMoses

BarteringMoses

EntertainmentMoses

EmploymentMoses

EducationMoses

DisciplineMoses

FarmingMoses

FuelMoses

FoodMoses

HealthMoses

MaintenanceMoses

LivestockMoses

JusticeMoses

ImmigrationMoses

ManufacturingMoses

MarriagesMoses

MilitaryMoses

MoralsMoses

RecordsMoses

PurchasesMoses

ProtectionMoses

OfferingsMoses

ReligionMoses

RevenueMoses

SafetyMoses

SanitationMoses

ShepherdingMoses

ShelterMoses

ServantsMoses

ScribesMoses

StatisticsMoses

StorageMoses

SuppliesMoses

TaxesMoses

WelfareMoses

WaterMoses

TravelMoses

TransportationMoses


AgricultureMoses

BankingMoses

BaptismMoses

BarteringMoses

The LeaderMoses

ConstructionMoses

CommunicationMoses

ComplaintsMoses

ClothingMoses

CraftsMoses

BankingMoses

BaptismMoses

BarteringMoses

EntertainmentMoses

EmploymentMoses

EducationMoses

DisciplineMoses

FarmingMoses

FuelMoses

FoodMoses

HealthMoses

MaintenanceMoses

LivestockMoses

JusticeMoses

ImmigrationMoses

ManufacturingMoses

MarriagesMoses

MilitaryMoses

MoralsMoses

RecordsMoses

PurchasesMoses

ProtectionMoses

OfferingsMoses

ReligionMoses

RevenueMoses

SafetyMoses

SanitationMoses

ShepherdingMoses

ShelterMoses

ServantsMoses

ScribesMoses

StatisticsMoses

StorageMoses

SuppliesMoses

TaxesMoses

WelfareMoses

WaterMoses

TravelMoses

TransportationMoses

Perhaps the earliest recognition of the fact that the span of control can be too large is found in the Bible. In Exodus 18 it is told:

“Moses sat to judge the people and the people stood by Moses from the morning until the evening.”

Moses’ father-in-law, Jethro (the first management consultant?), saw this and told him:

“The thing thou doest is not good. Thou will surely wear away, both thou, and the people that is with thee: for the thing is too heavy for thee; thou art not able to perform it thyself alone.”


Moses and the new organization structureThe Leader

Moses

TribalRelationsBenjamin

ProtectionPlanningJoshua

LabourAllocationJosephus

Organization CounselJethro

Assistant LeaderAaron

Staff ManagerSolomon

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofThousands

Ruler ofThousands

Ruler ofThousands

Ruler ofHundreds

Ruler ofHundreds

Ruler ofHundreds

Ruler ofFifties

Ruler ofFifties


The LeaderMoses

TribalRelationsBenjamin

ProtectionPlanningJoshua

LabourAllocationJosephus

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Ruler ofTens

Organization CounselJethro

Assistant LeaderAaron

Staff ManagerSolomon

Ruler ofThousands

Ruler ofThousands

Ruler ofThousands

Ruler ofHundreds

Ruler ofHundreds

Ruler ofHundreds

Ruler ofFifties

Ruler ofFifties

The subordinate rulers, Jethro suggested, could judge “every small matter” and bring the great matters to Moses. (introducing management by exception!)

Up to this point, the Israelites had spent thirty-nine years on a journey that had taken them only about halfway to the Promised Land.

After the reorganization took place, the remaining half of the journey was completed in less than a year -- a 39-fold increase in efficiency.

Strategy, structure and the accomplishment of purpose


Strategy, Structure and Purpose

1 The Roman Army

Purpose: Income via long-term taxation

Invade, then occupy and govern to allow the normal evolution of agriculture and commerceRigid, hierarchical, with clear definitions of duties and roles, and of performance and promotion criteria

Strategy:

Structure:


Strategy, Structure and Purpose2 Ghengis Kahn and the Moghul Hordes

Purpose: Income, and gratification of miscellaneous base instincts

Short-term invasion for rape, pillage and plunder, then return home with the bootyLoose, informal structure under a charismatic leader -- ambiguous tasks, no job definitions

Strategy:

Structure:

Ghengis


If the environment changes, then you may bestuck with the wrong structure and culture

1960-1980 •Computer industry very stable•IBM dominates the industry•Rigid structure•Rigid dress code “Xeroxoid”•Teetotal

1980-1990 •Computer industry totally unstable•Newcomers = greyhounds•IBM a dinosaur, stuck in the mud•IBM losses in the $10’s of billions


Strategy and Structure

Joan

Fred Ted LouAmy Hazel George

• 5 to 50 people• no job titles• no organization chart• everyone known by their first name

• growth = pressure on time of the boss• spend more time selling?• or more time in the factory?• leads to specialization by function

Stage 1 “Entrepreneurial” Organization



J. SmithGeneral Manager

F. BennettManufacturing

D. HagerPersonnel

L. HillisAccounting

A. JonesMarketing& Sales

G. BlakeAdmin

Stage 2 “Functional” Organization

• 50 to 500 people• job titles, department door signs• friction between departments• everyone known by their surname

• growth = horizontal integration• new product does not fit in marketing• new product does not fit in production• leads to creation of new division



Chief Executive

DivisionA

HeadquartersStaff

DivisionB

DivisionC

DivisionD

Stage 3 “Divisional” Organization

• 500+ people• head office staff v line divisions• geographical dispersion common• everyone known by their employee #

• friction within each stage 2 division• friction between HQ and divisions• budget friction between division heads• BCG cash reallocation problem

Stage 2 Functional Organization



Chief Executive

Marketing Manufacturing

MarketingRegion

B

MarketingRegion

A

ManufacturingRegion

A

ManufacturingRegion

B

Geographical Divisional Organization by Function

• product homogenous across countries or regions• marketing homogenous across countries or regions• means economies of scale are more important than coordination of functions

within one country or region

Lack of close contact



Chief Executive

Region A Region B

ManufacturingMarketing Marketing Manufacturing

Geographical Divisional Organization by Region

• coordination of functions within countries or regions very important• allows possible variation in product or marketing across countries or regions• economies of scale and coordination within functions less important

deviations from standards may occur

© colin boyd 2002strategic analysis organization structure and business strategy colin boyd...

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