why are strategy and organizational learning important and linked? what is organizational design and...
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Why are strategy and organizational
learning important and linked?
What is organizational design and how is it
linked to strategy?
How does technology influence
organizational design?
How does the environment influence
organizational design?
Copyright © 2010 John Wiley & Sons, Inc. 17-2
Strategy
The process of positioning the organization
in the competitive environment and
implementing actions to compete
successfully.
Copyright © 2010 John Wiley & Sons, Inc. 17-3
Organizational learning
Process of knowledge acquisition and
adaptation to changing circumstances through:
Information distribution
Information interpretation
Information retention
Copyright © 2010 John Wiley & Sons, Inc. 17-4
Copyright © 2010 John Wiley & Sons, Inc. 17-5
Experience
A primary way to acquire knowledge.
Besides learning by doing, managers can
also establish structured programs to learn
from successes as well as failures.
Copyright © 2010 John Wiley & Sons, Inc. 17-6
Scanning Involves looking outside
the firm and bringing
back useful solutions.
Copyright © 2010 John Wiley & Sons, Inc.
GraftingThe process of acquiring individuals, units,
or firms to bring in useful knowledge.
17-7
Avenues for knowledge retention:
Individuals
Transformation mechanisms
Formal structures
Physical structures (ecology)
External archives
IT systemsCopyright © 2010 John Wiley & Sons, Inc. 17-8
Organizational design
The process of choosing and implementing
a structural configuration.
Copyright © 2010 John Wiley & Sons, Inc. 17-9
Copyright © 2010 John Wiley & Sons, Inc. 17-10
The structural configuration:
Allows the management to focus on skills
and abilities that their firms need to
compete, be flexible, and adaptive.
Allows the individual members the ability
to experiment, grow, and develop
competencies that contribute to success.
Copyright © 2010 John Wiley & Sons, Inc. 17-11
Co-evolution of strategy and
structure
The firm can adjust to external changes
even as it shapes some of the challenges
facing it.
Shaping capabilities via the organization’s
design is a dynamic aspect of co-evolution.
Copyright © 2010 John Wiley & Sons, Inc. 17-12
Organizational size As the number of
employees increase, the
possible interconnections
among them increase
even more.
The design of small firms
is directly influenced by
core operations
technology.
Copyright © 2010 John Wiley & Sons, Inc. 17-13
Simple design
A configuration involving one or two ways
of specializing individuals and units.
Vertical specialization and control
emphasize levels of supervision without
elaborate formal mechanisms.
Copyright © 2010 John Wiley & Sons, Inc. 17-14
Managerial scripts
A series of well-known
routines for problem
identification and
alternative generation and
analysis that are common
to managers in a firm.
Copyright © 2010 John Wiley & Sons, Inc. 17-15
Copyright © 2010 John Wiley & Sons, Inc. 17-16
Co-evolution of strategy and
structure can be hampered by:
Organizational inertia
Hubris
Issue of detachment
Copyright © 2010 John Wiley & Sons, Inc. 17-17
Operations technology
The combination of resources, knowledge, and
techniques that creates a product or service.
Information technology
The combination of machines, artifacts,
procedures, and systems used to gather,
store, analyze, and disseminate information
for translating it into knowledge
Copyright © 2010 John Wiley & Sons, Inc. 17-18
Thompson’s view of technology
Classification according to the degree of
specification and degree of
interdependence of work units.
Copyright © 2010 John Wiley & Sons, Inc. 17-19
Intensive technology Uncertainty as to how to produce desired outcomes.
Requires assistance of specialists.
Mediating technology Links parties that want to become interdependent.
Long-linked technology Production method is known and broken down into a
number of sequential steps.
Copyright © 2010 John Wiley & Sons, Inc. 17-20
Woodward’s view of technology
Small-batch production.
Mass production.
Continuous-process technology.
Copyright © 2010 John Wiley & Sons, Inc. 17-21
An adhocracy is characterized by:
Few rules, policies, and procedures.
Substantial decentralization.
Shared decision making among members.
Extreme horizontal specialization.
Few levels of management.
Virtually no formal controls.Copyright © 2010 John Wiley & Sons, Inc. 17-22
An adhocracy is useful when:
The tasks facing the firm vary considerably
and provide many exceptions.
Problems are difficult to define and solve.
Copyright © 2010 John Wiley & Sons, Inc. 17-23
Why IT makes a difference
IT provides a partial
substitute for:
Operations
Process controls
Methods of coordination
IT provides a strategic
capability
Copyright © 2010 John Wiley & Sons, Inc. 17-24
IT as a substitute
Initial implementation of IT often displaced
routine, highly specified, and repetitious
jobs.
A second wave of substitution replaced
process controls and informal coordination
mechanisms with IT.
Copyright © 2010 John Wiley & Sons, Inc. 17-25
IT as a strategic capability
Improves the efficiency, speed of responsiveness,
and effectiveness of operations.
Provides all levels of the organization with the
knowledge required for immediate decision-
making.
Enhances motivation through individual
empowerment.
Copyright © 2010 John Wiley & Sons, Inc. 17-26
Copyright © 2010 John Wiley & Sons, Inc. 17-27
IT and e-business
Many dot-com firms adopted some
variation of adhocracy.
As the dot-coms grew, the adhocracy
design became problematic.
Copyright © 2010 John Wiley & Sons, Inc. 17-28
Virtual organization
An ever-shifting constellation of firms, with
a lead corporation, that pool skills,
resources, and experiences to thrive
jointly.
Partner firms are bound by mutual trust
and need for collective survival.
Copyright © 2010 John Wiley & Sons, Inc. 17-29
General environment
The set of cultural, economic, legal-political, and
educational conditions found in the areas in
which the organization operates
Specific environment
The owners, suppliers, distributors, government
agencies, and competitors with which an
organization must interact to grow and survive.
Copyright © 2010 John Wiley & Sons, Inc. 17-30
Copyright © 2010 John Wiley & Sons, Inc. 17-31
Environmental richness
A condition where the economic climate is
improving, customers are buying more
products, and suppliers are willing to
invest in the organization’s future.
Provides the best climate for opportunity
and dynamic growth.
Copyright © 2010 John Wiley & Sons, Inc. 17-32
Environmental interdependence
Linkage between environmental
independence and organization design
may be subtle and indirect.
Organization may co-opt powerful outsiders
by including them on governing board.
Develop centralized staff teams to service an
important client group.
Copyright © 2010 John Wiley & Sons, Inc. 17-33
Environmental uncertainty
A more organic structure is the appropriate
organizational design response to
uncertainty and volatility.
Copyright © 2010 John Wiley & Sons, Inc. 17-34
In a complex global economy, firms must
learn to co-evolve by adjusting their
environment.
Two important ways of co-evolution:
Management of networks
Development of alliances
Copyright © 2010 John Wiley & Sons, Inc. 17-35
Inter firm alliances
Cooperative agreements or joint ventures between
two independent firms.
Often, firms are geographically and geopolitically
separate, but have common interests.
A structure that is often used in complex
technology industries.
Copyright © 2010 John Wiley & Sons, Inc. 17-36
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