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Strategy Direction and
Organization Design
Organizational
goal -a desired
state of affairs
that an
organization
attempts to reach
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Organizational Purpose
Strategic intent - organization's energies and resources are
directed toward a focused, unifying, and compelling goal
* Overall Performance
* Mission * Resources
* Competitive Advantage * Market
* Core Competence * Employee Development
* Innovation and Change
* Productivity
Mission Statement for
Machias Savings Bank
Mission
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Mission Statement for
Machias Savings Bank
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Organizational Operating Goals
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Organizational Operating Goals
The Importance of Goals
"Communicate organisation’ purpose and veluas
* Bestow legitimacy
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The Importance of Goals
* Communicate organtton’ purpose and vues
* Bostow legitinacy
vite employee alrseuon and mowvaron
decision uideles
‘Denne 9 standard of perrmance
Sopp irem
Selecting Strategy and Design
* A strategy is a plan for interacting with the
competitive environment
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Selecting Strategy and Design
* A strategy is a plan for interacting with the
competitive environment
* Managers must select specific strategy design
* Models exist to aid in formulating strategy:
— Porter's Five Forces
— Miles and Snow’s Strategy Typology
Porter’s Competitive Strategies
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Woe un er eur ects
| Pee UEMATSU
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Porter’s Competitive Strategies
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Organizations may choose to focus broad or narrow in
reaching multiple markets.
Porter’s Competitive Strategies
= =
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Miles and Snow’s
Strategy Typology
Managers should seek to formulate strategy that matches the demands
of the external environment
* Prospector
= Learning orientation; flexible, lid, decentralized structure
— Values creativity, risk-taking, and innovation
: der
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Miles and Snow’s
Strategy Typology
Managers should seek to formulate strategy that matches the demands
of the external environment
* Prospector
— Learning orientation; flexible, fluid, decentralized structure
— Values creativity, risk-taking, and innovation
* Defender
— Efficiency orientation; centralized authority and tight cost control
— Emphasis on production efficiency, low overhead
* Analyzer
= Balances efficiency and learning; tight cost control with flexibility and
adaptability
— Emphasis on creativity, research, risk-taking for innovation
* Reactor
= No clear organizational approach; design characteristics may shift
abruptly depending on current needs
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G O 2How Strategy Affects
Organization Design
RelA ee aT
eos te
EME emia ial set tik cal
organization to support the firm’s
Colo an Xtal he osAg
Organization
Design
Outcomes of
Strategy
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Organization
Design
Outcomes of
Strategy
Contingency Factors
Affecting Organization Design
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Contingency Factors
Affecting Organization Design
Th Mgt of Desig CharacrtisFs te Cente Factors
Assessing Organizational
Effectiveness
[5 fa utes
Reo enn)
lev
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Assessing Organizational
Effectiveness
Effectiveness takes into consideration a range of
Tae ee ee enue eee
Cao
CRO Reel et Ld
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Measuring Effectiveness:
— The Goal Approach
— The Resource-Based Approach
— The Internal Process Approach
— The Strategic Constituents Approach
Indicators of Organizational Effectiveness
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Indicators of Organizational Effectiveness
2. Nowtng doadines:entine daivery
2. Tinely maetal and eculoment acquiston
3. Qualy of pecuet or sence
4. Oustomorsatistacton/complans
5. Natkot shar compare compettors
6. Employee tring ad deveicoment (numero nous)
7 Siaprg wthn budget
1, Srurenolot saustcon
8, Rodketion in costs
10, Supply chain ceiaysorinprovenensa
41. ProtuctMly: dolar spat for eac unit of outa.
12, Enployee engagement
43, aang alas tapes
{LA Product dovelepment eee tine (eduston I oye tne)
415, Nunber of hous/days/et. to complete tasks
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Approaches to Measuring
Organizational Effectiveness
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Approaches to Measuring
Organizational Effectiveness
An Integrated Effectiveness Model
* Competing values model tries to balance
concern with various parts of the organization
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An Integrated Effectiveness Model
* Competing values model tries to balance
concern with various parts of the organization
* The human relations emphasis incorporates
the values of an internal focus and flexible
structure
pe
Four Approaches to
Effectiveness Values
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Four Approaches to
Effectiveness Values
Effectiveness Values for
Two Organizations
sTmuGTURE
Fahey
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Effectiveness Values for
Two Organizations
a
Design Essentials
Y Organization exist for a purpose
Y Strategic intent includes competitive advantage and
core competence
v Strategies may include many techniques
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sons 1 Paina
‘vant
Design Essentials
Y Organization exist for a purpose
Y Strategic intent includes competitive advantage and
core competence
Y Strategies may include many techniques
¥ There are models to aid in the development of
strategy
¥ Organizational effectiveness must be assessed
Y No approach is suitable for every organization
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