1. Organising for success a, — A \ ~ \ /kelationships > \ / 7 Nand boundaries/ processesStructural types Organisation chart _. map out its structure Structures —+ define levels and roles in the organisation 1. Simple structure Ina simple structure the organisation is run by the personal control of an individual. Main problem. the organisation can operate effectively only up to a certain size.The functional structure The functional structure +based on the primary activities that have to be undertaken by an organisation such as production, finance and accounting, marketing, human resources and information management. Chief executive Production Sales and Finance and Personnel department Mktg. Dept. Accounting dept Dept Advantages Disadvantages -CEO in touch with all operations -Reduces/simplifies control mechanisms -Clear definition of responsibilities -Specialists at senior and middle mgt levels -Senior managers overburdened with routine matters -Senior managers neglect strategic issues -Difficult to cope with diversity -Coordination between functions difficult Failure to adaptThe multidivisional structure A multidivisional structure is built up of separate divisions on the basis of products, services or geographical areas. Hoad office Central sbivices (e.cfinance) Division A Division 8 Division C Div Division E rT | ff TT 4 rT To) FT TT Functions Functions Functions Functions Functions Advantag Disadvantages Concentration on business area (eg productimarkel) cltates measurement of unt performance -Ease of addivon and divestment of units -Eneourages general management development -Faciitates senior management's attenton to strategy “Possivie confusion over lacus of responsibilty (centralsation/devclution confusion) Confcs between divisions Divisions grow too large -Complestty cooperation itto0 many avsions. CostlyThe Matrix structure A matrix structure is a combination of structures which could take the form of product and geographical divisions or functional and divisional structures operating in tandem. Chief executive Merchandise MDs of trading Finance Marketing ~) The director companies director director J board Trading companies Europe USA Far East Product Group A Product The Group B operations Product Group © 1Virtual organisations Virtual organisations are held together not through formal structure and physical proximity of people, but by partnership, collaboration and networking. Important! From the point of view of the client, it looks “real” and satisfies the needs of clients as any “real” organisation. Networks ¥ One-stop shop is where a physical presence is created through which all client enquiries are channelled ¥One-start shop deals with client enquiries by diagnosing the client's needs and referring them to the most appropriate provider ¥ Service network the client may access all of the services of the network through any of the constituent members of the networkProcesses Structure is a key ingredient for success What make organisations work? Formal and informal processes —.as Controls on organisations operations ——_-+ can help or hinder —-- translation of Strategy into action Formal controls (systems, rules, procedures) through Social Controls (culture and routines) and self-controls (personal motivation of people)Centralisation vs. Devolution Devolution concerns the extent to which the centre of an organisation delegates decision making to units and managers lower down in the hierarchy In Strategic Planning style, the relationship between the centre and the buisness units is one of a parent who is the master planner prescribing detailed roles for departments and business units In Financial Control the role of the centre is confined to setting financial targets, allocating resources, appraising performance and intervening to avert or correct poor performance Strategic Control is concerned with shaping the behaviour in business units and with shaping the context within which managers are operating Goold M. & Campbell A,, Strategies and Siyles, 1987About Culture *Culture is about the way people understand their world and make sense of it. * Culture should not simply be considered as an obstacle to doing business across cultures. * Culture can provide tangible benefits and can be used competitively. Think globally and act locally Think locally and act globallyBasic assumptions and beliefs that are shared by members of an organisation, that operate unconsciously and define in a basic taken-for-granted fashion an organisation’s view of itself and its environment. It is important to recognise the significance of organisational culture in strategy development.Culture in three layersThe cultural web Organisational structuresStrategic drift is the tendency for strategies to develop incrementally on the basis of historical and cultural influences but fail to keep pace with a changing environment. Enviromental change Amount of change Phase 4 Phase 2 PhaseS Phase 4 Incremental Strategic Flux Transformational change drift change or death Time