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Unformatted text preview: jectives the organization has been created to address, and organization-specific priorities. The second level involves business strategy, a set of decisions about how to configure the organization’s resources in response to the demands, threats, opportunities, and constraints of the environment within the context of the organization’s history. Together, these choices constitute what our colleagues at Oliver Wyman − Delta Organization and Leadership describe as a “business design,” which includes five strategic elements: Group/Unit Performance Strategic control: How do I protect my profits from competitor imitation and customer power? Scope: What activities in the value chain must I engage in to remain relevant to customers, to generate high profits, and to create strategic control? Output The ultimate purpose of the enterprise is to produce output—the pattern of activities, behavior, and performance of the system at the following levels (see Figure 3): The total system: The output measured in terms of goods and services produced, revenues, profits, shareholder return, job creation, community impact, policy or service outcomes, etc. Customer selection: Who are my customers, and why do I choose to serve them rather than any others? Units within the system: The performance and behavior of the various divisions, departments, and teams that make up the organization Unique value proposition: Why do my customers buy from me? Individuals: The behavior, activities, and performance of the people within the organization Value capture: How do I retain, as profit, a portion of the value I deliver to customers? The Congruence Model In our organizational model, “output” is a broad term that describes what the organization produces— how it performs, and how effective it is. It refers to 7 the organization’s ability not only to create products and services and achieve results but also to achieve a certain level of individual and group performance within the organization. organizational component and its relationship to the others (see Figure 4). The Organizational Transformation Process The heart of the model is the transformation process, embodied in the organization, which draws upon the input implicit in the environment, resources, and history to produce a set of output. The organization contains four key components: the work; the people who perform the work; the formal organizational arrangements that provide structure and direction to their work; and the informal organization, sometimes referred to as culture or operating environment, that reflects their values, beliefs, and behavioral patterns. The real challenge of organizational design is to select from a range of alternatives the most appropriate way to configure the organizational components to create the output required by the strategy. To do this, it is essential to understand each The work: We use this general term to describe the basic and inherent activity engaged in by the organization, its units, and its people in furthering the co...
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This note was uploaded on 11/22/2009 for the course HR GM600 taught by Professor Na during the Spring '09 term at Keller Graduate School of Management.

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