Decentralized organization structure is used if focus

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decentralized organization structure is used if focus & differentiation strategy wants to be implemented, because decentralized structure promotes strong coordination among functions in R&D, product development and marketing 2. Need for Efficiency and Effectiveness Organizational structure greatly affects efficiency and effectiveness. Efficiency is about doing things right – a centralized organizational structure should be used since it characterized by extensive rules and procedures, which allows the company to reduce cost and wastes. Effectiveness means increase market shares, customer satisfaction, etc. This can be achieved with a decentralized organizational structure that allows more product development. 3. Organizational size/growth To increase the organizational size and achieve growth, a decentralized organizational structure should be used. Decentralized structure allows development of new products, which in turn capture more market shares and increase the size of the market.. 1. The Market Advantage Test: Does your design direct sufficient management attention to your sources of competitive advantage in each market 2. The Parenting Advantage Test: Does your design help the corporate parent add value to the organization? 3. The People Test; does your design reflect the strengths, weaknesses and motivations of your people? 4. The Feasibility Test: does your design facilitate the development of new strategies and provide the flexibility required to adapt to change? 5. The specialist cultures test: does your design protect units that need distinct cultures? 6. The Difficult Links test: does your design provide coordination solutions for the unit to unit links that are likely to be problematic?
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7. The redundant hierarchy test; does your design have too many parent levels and units? 8. The accountability test; does your design support effective controls? 5) Describe and contrast the culture and behaviour? How are culture and behaviour relevant to strategy? Provide an example discussed in class.   Behaviour definition : The readily observable behaviour of individual employees in a firm. Behaviour: readily observable behaviour Oftentimes, to change behaviour, you need to change culture Culture Values, beliefs, and core basic assumptions, shared by people in an organization, that have worked well enough in the past to be considered valuable, correct and true, so much that they are taught to new employees as the proper way to think and to act Have major impact on behaviour of everyone in the organization and its capabilities a. Inward impinging on behaviour and capabilities b. Outward influences choices managers make about organization structure, mgmt process, and leadership behaviours Relevant to strategy: Culture drives behaviour of organization which facilitates what kind of capabilities the organization can develop or obtain, which in turn determines the success of a strategy Example:
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  • Winter '13
  • Fah

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