Week 8 Notes

Week 8 Notes
● Organizational capabilities:
This study source was downloaded by 100000870008260 from CourseHero.com on 03-30-2024 12:01:38 GMT -05:00
https://www.coursehero.com/file/194151716/Week-8-Notesdocx/
Behaviour
● When we speak of behaviour, we are talking of readily observable behaviour, not
aspects of people’s actions that one would need to be a trained psychologist to
notice.
● When managers refer to the behaviour of others in their firm, they are generally
thinking of how much energy they put into various aspects of their job, how they
manage their subordinates, how much attention they give to external issues, how
they relate to one another, and so on.
● The four capabilities they were seeking were:
● (1) the ability to recognize and assess changes in the external environment in a more
timely fashion,
● (2) the ability to make better strategic choices—particularly a willingness to say no to
more projects,
● (3) the ability to meet quality and delivery promises made to customers,
● (4) an enhanced ability to understand where they were, and were not, performing
well.
● An organization’s culture can have a major impact on the behaviour of everyone in
the organization, and thus on its capabilities.
● When we speak of organizational culture we are referring to the values, beliefs, and
core basic assumptions, more or less shared by people in an organization, that have
worked well enough in the past to be considered valuable, correct, and true, so much
so that they are taught to new employees as the proper way to think and to act.
● When Sir David Simon at British Petroleum was trying to create a new culture in
which all employees would understand that “everything comes down to money,” he
was up against a very strongly entrenched culture.
● Needless to say, a “deep-seated” culture, as Sir David put it, can be a real asset if it
supports the behaviour and capabilities required by your current or proposed
strategy. If a strong culture is inappropriate, it will be a major hindrance—and
possibly disastrous.
Step 1: Identify Required Organizational Capabilities:

● Be as Specific as You Can About the Capabilities That You Will Need
● Cast a Wide Net
Step 2: Identify
Capability Gaps
Step 3: Develop New Organizational Capabilities
● The three leverage points are:
○ (1) organization structure, which captures the way you have grouped people
around tasks and established reporting, power, and communications
relationships, as reflected in your firm’s
■ Type of strategy
■ Efficiency measures v Effectiveness measures
■ size/growth
○ (2) management processes, which are the processes that you use to manage
the company and the people in it,
■ Benefits
■ Costs
○ and (3) leadership behaviour, which is the way senior managers lead the
company.
Organization Structure
● Functional Structure - The traditional organizational building block is the functional
unit, which consists of people working together within the same business function—
research, engineering, manufacturing, marketing, sales, service, and so on—
reporting to a general manager. Only the general manager is responsible for
profitability. Small companies typically have such a structure, and the general
manager is the president of the company.
● Product Organization - If a company with a functional structure grows by adding
new products, the structure will become awkward, as within each functional area
there will be groups of people associated with each product, with different
knowledge, different challenges, and different priorities.
● Geographic Structure - the level below the CEO comprises executives who are
responsible for various areas of the world. Each is responsible for maximizing
financial results within that area, for all of the firm’s products.
● Matrix Structure - Matrix structures are used by companies that do not want to put
one element of organization, say product line or geography, in a superior position to
others. Rather than having one primary organizing logic, they have two, or possibly
more, which results in a number of managers reporting to multiple bosses,
● Cellular Structure - On the increase is a relatively new organizational structure
called the cellular form. Knowledge-intensive industries such as biotechnology,
information technology, medical instruments and devices, and software development
companies rely on R&D for discoveries and innovations that can be converted into
new products.
● Strategic Alliance - One way many firms (and not just those that have cellular
structures) attempt to extend and develop their organizational capabilities is through
strategic alliances. In summarizing the alliance literature, Jay Barney discusses
seven inter-firm synergies that can motivate strategic alliances: exploiting economies
of scale, learning from competitors, managing risk and sharing costs, facilitating tacit
collusion, low-cost entry into new markets, low-cost entry into new industries and
new industry segments, and managing uncertainty.
● Choosing a Structure - Goold and Campbell 9 tests:
○ 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: Have you taken account of all the constraints that may
impede the implementation of your design?
○ 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?
○ 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?
○ 9. The Flexibility Test: Does your design facilitate the development of new
strategies and provide the flexibility required to adapt to change?
● Management process - During the past ten years, managers have become much
more conscious of the processes by which their companies make decisions and get
things done.
● Decision-making process - Whether we are talking of multi-billion dollar acquisition
decisions or a hotel clerk deciding how to deal with an irate customer, decision-
making processes are of vital importance to every organization. Companies trying to
develop new capabilities to support a new strategy often find that they need to learn
to make decisions faster, better, or both.
○ Who makes decisions
○ What information do they have
○ How are decisions actually made
○ Gore has a number of principles it follows:
■ (1) ask your customers for help;
■ (2) let employees figure out what they want to do;
■ (3) leaders emerge as they acquire followers;
■ (4) make time for dabbling
■ (5) know when to let go.
● Operation process - Operating processes govern the way in which your employees
work together to create, produce, and deliver products or services that your
customers value. Generally, such processes work well if they are contained within a
small organizational unit in a single location.
● Performance assessment and reward processes - Many managers who want
employees to behave differently change the performance
○ assessment and reward processes in their organization. This seems a logical
step, but it often leads to unintended consequences
● Leadership behaviour - Changes in organizational structure and management
processes can be rather heavy, blunt tools for attempting to change behaviour. You
may want to first try changing your own behaviour.
● The right leaders

● Use all three
leverage points
Step 4: Assess Feasibility:

● (1) Can these
changes be made in
the required time
frame? and
● (2) Will they produce
the desired result?
decide if the strategic proposals that looked attractive during your environment, resource,
and management preferences analyses could be implemented in the necessary time frame.
This analysis involves identifying the organizational changes that would be necessary
in the firm’s structure, management processes, and leadership behaviour to develop the
capabilities you will need to support the new strategy. You must then make a crucial judg-
ment regarding how likely it is that the proposed changes would have the desired result and
could be implemented in the given time frame. This assessment gives you a basis on
which to weigh the risks against the benefits of the proposal.
Powered by TCPDF (www.tcpdf.org)

Week 8 Notes

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Week 8 Notes

Uploaded by

Copyright:

Available Formats

Week 8 Notes

Step 1: Identify Required Organizational Capabilities:

● The right leaders

Step 4: Assess Feasibility:

You might also like