Chapter 5 Strategy, Organization

Design and Effectiveness

The Role of Strategic Direction in The Role of Strategic Direction in Organization DesignOrganization Design

圖 2.1 組織方向、設計及效能的高階管理角色

CEO 、 Topmanagement

team

External Environment

OpportunitiesThreats

UncertaintyResource availability

Internal SituationStrengths

WeaknessesDistinctive competence

Leader stylePast performance

Strategic Direction

Organization Design

Define mission,official goals

Select operational goals, competitive strategies

•Structural form –learning vs. efficiency•Information and control systems.•Production technology•Human resource policies incentives •Organizational cultural •Interorganizational linkages

Effectiveness Outcomes

•Resources EfficiencyGoal attainment Competing values

Organizational PurposeOrganizational Purpose

• Mission ； Official goals

• Operative goals

Mission or Official goals

Operative goals

Organizational Purpose

使命

圖 2.2 賀軒公司的使命

Overall performance

OperativeGoals

Profitability reflects the overall performance of for-profit organization, also may be expressed in terms of net income, earnings per sharing, or return on investment.

Profitability reflects the overall performance of for-profit organization, also may be expressed in terms of net income, earnings per sharing, or return on investment.

Overall performance

OperativeGoals

Resources

Pertain to the acquisition of needed material and financial resources from the environment.

Pertain to the acquisition of needed material and financial resources from the environment.

Overall performance

OperativeGoals

Resources

Market

Related to the market share or market standing desired by the organization

Related to the market share or market standing desired by the organization

Overall performance

OperativeGoals

Resources

Market

EmployeeDevelopment

Employee development pertains to the training, promotion, safety, and growth of employees.

Employee development pertains to the training, promotion, safety, and growth of employees.

Overall performance

OperativeGoals

Resources

Market

EmployeeDevelopment

Innovation and change

Innovation goals pertain to internal flexibility and readiness to adapt to unexpected changes in the environment.

Innovation goals pertain to internal flexibility and readiness to adapt to unexpected changes in the environment.

Overall performance

OperativeGoals

Resources

Market

EmployeeDevelopment

Innovation and change

Productivity

Productivity goals concern the amount of output achieved from available resources.

Productivity goals concern the amount of output achieved from available resources.

Goal Type and Purpose

Type of goal Purpose of goals

Official goals, Mission:

•Legitimacy

Operative goals

•Employee direction and motivation •Decision guidelines •Standard of performance

A Framework for Selecting Strategy and Design

圖 2.3 Porter 競爭策略

Low-cost leadership

Example:Ryanair

Low-cost leadership

Example:Ryanair

Focused low-cost leadershipExample:

Rent-a-Car Company

Focused low-cost leadershipExample:

Rent-a-Car Company

FocusedDifferentiation

Example: Puma

FocusedDifferentiation

Example: Puma

Differentiation

Example:Starbucks Coffee

Differentiation

Example:Starbucks Coffee

Broad

Narrow

CompetitiveScope

Low cost Uniqueness

Competitive Advantage

A strategy is a plan for interacting with the competitive environment to achieve organizational goals.

A strategy is a plan for interacting with the competitive environment to achieve organizational goals.

Miles and Snow’s strategy typology

Prospector

Miles and Snow’s strategy typology

The prospector strategy is to innovate, take risks, seek out new opportunities and grow.

The prospector strategy is to innovate, take risks, seek out new opportunities and grow.

DefenderProspector

Miles and Snow’s strategy typology

Miles and Snow’s strategy typology The defender strategy is

almost the opposite of the prospector, this strategy seeks to hold onto current customers, but it neither innovates nor seeks to grow

The defender strategy is almost the opposite of the prospector, this strategy seeks to hold onto current customers, but it neither innovates nor seeks to grow

DefenderProspector

Miles and Snow’s strategy typology

Analyzer

Miles and Snow’s strategy typology

To maintain a stable business while innovating on the periphery

To maintain a stable business while innovating on the periphery

DefenderProspector

Miles and Snow’s strategy typology

Analyzer reactor

Miles and Snow’s strategy typology

In a reactor strategy, top management has not defined a long-range plan or given the organization an explicit mission or goal, so the organization takes whatever actions seem to meet immediate needs.

In a reactor strategy, top management has not defined a long-range plan or given the organization an explicit mission or goal, so the organization takes whatever actions seem to meet immediate needs.

策略的組織設計結果

Contingency Factors Affecting Organization Design

Strateg

y

Environment

Organizational Structure and Design

Technology Size/Life Cycle

Culture

The Right Mix of Design Characteristic Fits the Contingency Factors

Contingency Approaches to the measurement of Organizational Effectiveness

圖 2.5 量測組織效能的權變方法

ResourceInput

ResourceInput

Product and

Service Outputs

Product and

Service Outputs

Organization

Internal activities and

processes

Organization

Internal activities and

processes

External Environment

Resource-based approach

Internal process

approach

Goal approach

The important goals to consider are operative goals. Efforts to measure effectiveness have been more productive using official goals.

Goal Approach

Indicators

Business firms typically evaluate performance in terms of profitability,growth, market share, and return on Investment.

usefulness

Resource-based Approach

Obtaining and successfully managing resources is the criterion by which organizational effectiveness is assessed.

The resource-based approach is valuable when other indicators of performance are difficult to obtain.

Indicators

usefulness

Internal Process Approach

One indicator of internal process effectiveness is the organization’s economic efficiency. There are seven indicators of an effective organization as seen from an internal process approach:

․Strong corporate culture and positive work climate․Team spirit, group loyalty, and teamwork ․Confidence, trust, and communication between workers and management․Decision making near sources of information, regardless, of where those sources are on the organizational chart․Undistorted horizontal and vertical communication; sharing of relevant facts and feelings ․Rewards to managers for performance, growth, and development of Subordinates and for creating an effective work group․Interaction between the organization and its parts, with conflict that occurs over projects resolved in the interest of the organization

․Strong corporate culture and positive work climate․Team spirit, group loyalty, and teamwork ․Confidence, trust, and communication between workers and management․Decision making near sources of information, regardless, of where those sources are on the organizational chart․Undistorted horizontal and vertical communication; sharing of relevant facts and feelings ․Rewards to managers for performance, growth, and development of Subordinates and for creating an effective work group․Interaction between the organization and its parts, with conflict that occurs over projects resolved in the interest of the organization

Indicators

The internal process approach is important because the efficient use of resources and harmonious internal functioning are ways to asses organizational effectiveness.

Internal Process Approach

usefulness

An Integrated Effectiveness Model • The model is based on the assumption that there are

disagreements and competing viewpoints about what constitutes effectiveness.

A combination of external focus and flexible structure

Leads to an open system model. Primary goal:

growth and resource acquisition.

Open systems modelOpen systems model

Represents management values of structural

control and external focus. The primary goals areproductivity, efficiency, and profit.

Rational goal modelRational goal model

Its reflects the values of internal focus and

structural control. The primary outcome is a

Stable organizational setting that maintains itself

In an orderly way.

Internal process modelInternal process model

Its incorporates the values of an internal focus and

Flexible structure. Management concern is for the

development of human resources.

Human relations modelHuman relations model

An Integrated Effectiveness Model

圖 2.7 Effectiveness Values for two organizations

Organizational A

Organizational B Rational

Goal Emphasis

Open Systems Emphasis

Human Relations Emphasis

Internal Process

Emphasis

Control

Flexibility

Structure

FocusInternal Externa

l