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BMGT 892 -- Structure and Strategy

BMGT 892 -- Structure and Strategy - Organization Design...

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Organization Design & Strategy
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What are the factors that affect organizational design?
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Organizational Design “...the process of deciding how a company should create, use, and combine organizational structure, control systems, and culture to pursue a business model successfully.”
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Implementing Strategy Through Organizational Design   Organizational Structure-  assigns employees to  specific value creation tasks & roles    Control System Incentives to motivate employees Specific feedback on performance Organizational Culture-  values, norms, beliefs, &  attitudes shared within organization 
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What are the decisions that affect organizational structure?
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Choice of Structure ...made on ability to implement ...made on ability to implement company’s business model and company’s business model and strategies successfully.” strategies successfully.”
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How should an organization structure itself if pursuing cost leadership?
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Implementing Cost Leadership Aim to become lowest cost producer in industry Reducing costs across all functions Lowering cost structure while preserving ability to attract customers Continuously monitoring for effective operation
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How should an organization structure itself if pursuing a differentiation strategy?
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Implementing Differentiation Design organization structure  around the source of distinctive  competency, differentiated  products, and customer groups.
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Building Blocks of Organizational Structure  First step - Grouping tasks,  functions, & divisions              Second step - Allocating  authority & responsibility  Third step - Integration  mechanisms     
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Grouping Tasks, Functions & Divisions 1) Organizational structure – follows range & variety of tasks an  organization pursues. 2) Companies group people & tasks into functions, & then functions  into divisions. Function  - collection of people who work together & perform same tasks/ hold similar positions.
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