Professional Documents
Culture Documents
Too often,
organizations evolve over time,
driven more by random situations
than alignment with strategy.
2
Organization Alignment
3
Organization Design Process
Evolving
organization
Current organization strategy
• structure
• work processes
• culture
Evaluate likely
Test for problem areas
strategic fit
Design
validation Design ideal organization
Structured approach
• structure
• focus on strategy & effectiveness
• work processes
• explicitly address trade-offs
• culture
• avoid organization politics
4
Competitive Advantages
• What is unique?
– Type of raw materials?
– Operations excellence as driver of value?
– Approach to manufacturing or distribution?
– Market Segments or Channels?
– Flexible programs oriented toward marketers?
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Key Strategic Thrusts - possibilities
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Design Impact - Strategy
7
Design Choice – What is our Focus?
• Operations-Centric
• Customer-Centric
• Product-Centric
8
Operations–centric Focus
9
Customer–centric Focus
10
Product–centric Focus
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Organizational Design Focus
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Organizational Design Fit
Structure
• roles, responsibility
Work
Process linkages o n ma
i si ki
ng
c
de
Strategy
• vision
Reward systems People practices
• competitive
• goals, scorecards • staffing
advantage • accountability • development
• line-of-sight • org. culture
• feedback - control
13
“Fit” & “Good Design” tests
15
Value to Parent Organization
16
Leverages Strengths (avoids Weaknesses)
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Recognizes Constraints
18
Protects “Special Cultures”
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Problem Linkages – conflicting goals
• Relationships that are problematic due to conflicting
goals
– Best handled through self-managed processes
• Incentives for collaboration
• Goal linkage with bi-directional economic exchanges
• Arbitration for resolving disputes
• Critical inter-unit linkages
– Sharing knowledge
– Sharing common resources
• Shared assets
• Economies of scale
• Eliminating duplication of effort
– Pooling negotiation power
– Coordinating responses to strategic threat or opportunity
– Vertical integration to coordinate supply-chain requirements
20
Necessary & Appropriate Controls
21
Value Generated at Each Level
• Each level in the organization hierarchy needs to add value
– Streamlines decision-making & resource allocation
– Shortens lines of communication
– Efficiently resolve organizational conflicts
• Flat organizations are more efficient
– However, more difficult to do career ladders
• Raises the issue of placement of staff organizations
– Accountability to client base
– Concentration of functional expertise
• Matrix organizations sometimes confuse accountability
• New value chain structures becoming more common
– Back-end product-centric units
– Front-end customer-centric units
– Requires strong leadership to coordinate products with services
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Flexibility to Leverage Opportunity
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Organization Design Summary
24
Organization Design
Too often,
organizations evolve over time,
driven more by random situations
than alignment with strategy.
25
References
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