SHIFT IN FOCUS IN SHIFT IN FOCUS IN

ORGANIZATIONAL DESIGNORGANIZATIONAL DESIGN Classical organizational design theories emphasized Classical organizational design theories emphasized

stability.stability. Unsuited for fast and dynamic environment faced by Unsuited for fast and dynamic environment faced by

many businesses today.many businesses today. Search for alternative model has lead to the interest Search for alternative model has lead to the interest

in organic systems.in organic systems. Organic systems seen as more adaptive than the Organic systems seen as more adaptive than the

traditional mechanistic design.traditional mechanistic design.

MECHANISTIC VS. ORGANIC SYSTEMSMECHANISTIC VS. ORGANIC SYSTEMSMECHANISTICMECHANISTIC

Fragmented unitsFragmented units Rigid task definitionsRigid task definitions Role specific individual Role specific individual

responsibilityresponsibility Hierarchical controlHierarchical control Omniscient leaderOmniscient leader Vertical communicationVertical communication Instructive communicationInstructive communication Loyalty and obedience to Loyalty and obedience to

organizationorganization

ORGANICORGANIC Integrated subunitsIntegrated subunits Flexible task definitionFlexible task definition Broad responsibility beyond Broad responsibility beyond

immediate roleimmediate role Community of interestCommunity of interest Leader not omniscientLeader not omniscient Consultative & lateralConsultative & lateral Advise and convey informationAdvise and convey information Commitment to task and Commitment to task and

loyalty to disciplineloyalty to discipline

EXPLOITATION AND EXPLORATIONEXPLOITATION AND EXPLORATION Exploration and exploitation are organizational learning Exploration and exploitation are organizational learning

approachesapproaches Exploitation focuses on making incremental improvements to Exploitation focuses on making incremental improvements to

existing capabilitiesexisting capabilities Exploration focuses on seeking new learning and more radical Exploration focuses on seeking new learning and more radical

improvementsimprovements The different focus of these 2 requires different The different focus of these 2 requires different

organizational designorganizational design Exploitation depends on process managementExploitation depends on process management

Involves process mapping and creating stable architectureInvolves process mapping and creating stable architecture Exploration depends on flexibility and adaptabilityExploration depends on flexibility and adaptability

Involves managing diffusion of knowledge to create new Involves managing diffusion of knowledge to create new combinationscombinations

Requires development of high combinative abilityRequires development of high combinative ability

OTHER APPROACHES IN OTHER APPROACHES IN DEVELOPING DEVELOPING RESPONSIVENESSRESPONSIVENESS

Develop loose coupling of systemDevelop loose coupling of system Reliance on dynamic routineReliance on dynamic routine Develop asset robustnessDevelop asset robustness Develop absorptive capacityDevelop absorptive capacity Implement ambidextrous organizational designImplement ambidextrous organizational design Structural disaggregationStructural disaggregation

Reliance on outsourcing and network arrangementsReliance on outsourcing and network arrangements

KEY ISSUES IN NETWORK KEY ISSUES IN NETWORK DEVELOPMENTDEVELOPMENT

Partner selection.Partner selection.Share strategic direction and focusShare strategic direction and focus

Build relationship on trust and performanceBuild relationship on trust and performance Relationship maintenanceRelationship maintenance

Attain cultural fitAttain cultural fit

Develop conflict resolution mechanismsDevelop conflict resolution mechanisms Assessment and performance managementAssessment and performance management

Emphasize commitment to standardEmphasize commitment to standard Improving partnershipImproving partnership

Develop an improvement orientationDevelop an improvement orientation

Take mutual ownership of problemsTake mutual ownership of problems

JAPANESE KEREITSU SYSTEMJAPANESE KEREITSU SYSTEM

BANKS

MAJOR COMPANIES

VENDORS, OUTLETS AND

SUPPLIERS

SUB-VENDORS AND SUPPLIERS

CHINESE CHINESE GUANXIGUANXI

Based on family, clan and ancestral village.Based on family, clan and ancestral village. Three levels of social networkThree levels of social network

JiarenJiaren

ShurenShuren

ShengrenShengren

Bond created thru Bond created thru Renqing.Renqing.

PREREQUISITE FOR PREREQUISITE FOR SUCCESSSUCCESS

Require managers with certain skills.Require managers with certain skills. Recognize interdependence.Recognize interdependence. Role of managers as brokers.Role of managers as brokers. Develop ability to customize products to maintain Develop ability to customize products to maintain

position in network.position in network. Invest in development of interfirm capabilities.Invest in development of interfirm capabilities. Compete on network basis.Compete on network basis. Network is both a structural arrangement and a Network is both a structural arrangement and a

state of mind.state of mind.