in search of efficiency and superior execution strategic organizations
DESCRIPTION
THE CRITICAL COMPONENTS OF STRATEGIC ORGANIZATIONS Innovative, dedicated, motivated people Creative empowering leadership Organizational structures the match competitive strategies, efficiently Organizational controls and incentives that efficiently focus people on strategic goals and objectives appropriate administrative procedures and policies Organizational arrangements that efficiently “govern” the critical activities. efficient organizational boundariesTRANSCRIPT
IN SEARCH OF EFFICIENCY AND SUPERIOR EXECUTION
Strategic OrganizationsStrategic Organizations
Implementation Is Strategy
Distinctive performance is almost entirely a function of deep understanding. not one thing a 1000% better but a 1000 things
1% better organizations consist of many things -- the most
critical are its inherent skills or distinctive competencies
distinctive skills -- “thousand thousand little things” are the real source of “fixed” barriers to imitation
THE CRITICAL COMPONENTS OF STRATEGIC ORGANIZATIONS
Innovative, dedicated, motivated peopleCreative empowering leadershipOrganizational structures the match competitive
strategies, efficientlyOrganizational controls and incentives that
efficiently focus people on strategic goals and objectives
appropriate administrative procedures and policiesOrganizational arrangements that efficiently
“govern” the critical activities. efficient organizational boundaries
ORGANIZATIONAL STRUCTURE
An organization should be structured by its market strategy to reach its ultimate goals
Business costs rise from: supervisory monitoring motivation problems coordination activities Misinformation or no information
HOW DO YOU GET THERE?
How do you get people to achieve organizational goals in the most efficient way possible?
Problems in managing/motivating people: Lack of interest/Laziness Unrestrained self-interest Error and mistakes Not clear in measuring performance Complexity/Inability in giving clear direction
TWO MECHANISMS
A means to coordinate the work
A means to monitor and measure effectiveness
BASIC ELEMENTS IN ORGANIZATIONAL STRUCTURES
1. Work Specialization2 Departmentalization3 Established Patterns of Authority4 Span of Control5 Methods of Coordinating the Work
Work Specializations
In hotels, work is divided between line and staff functions.
Line functions work directly with the guest in delivering the overall guest experience: Who are they?
Staff functions work to support the Line functions and are not necessarily in direct contact with the guest: Who are they?
Departmentalization
Certain jobs are logically grouped together into departments to create efficiency in the organization.
In hotels these departments must function together to deliver the guest experience.
How could a staff function such as Building Engineering impact the guest experience? Human Resources?
Established Patterns of Authority
Avoiding conflict which might impact the guest experience
Maintaining standards which might impact the guest experience
Making decisions on many issues while weighing the impact on the guest experience
Understanding and responding to a very dynamic environment: The Ritz Carlton empowerment model
Span of Control
Relates to the number of subordinates or partners who report to a supervisor
The more similar the tasks of subordinates or partners the wider the span of control
The more trained and skilled…the wider the span of control
The more predictable the work is…the wider the span of control
Methods of Coordinating the Work
Pooled interdependence – activities can be performed with little
interaction between individuals / groups e.g. cashier
– standardized rules or procedures for each to follow
– intensive training and direct supervision
Methods of Coordinating the Work
Sequential interdependence – one task’s output is the second task’s input e.g. guest check-in process (proper
coordination between front desk receptionist and bell hop, front desk and housekeeping)
– close coordination is possible only through direct communication and joint decision making
Principles of Organization Design
Chain of CommandEveryone should have a superior to report toOrganization chart should show chain of
command and span of control.From the organization chart, an employee
can trace the way up the chain of command to the GM.
Principles of Organization Design
Unity of CommandEach person should have only one superior.Unity of command is sometimes violated
when staff manager gives order to line employee. E.g. safety manager corrects a waiter (who reports to
restaurant manager)GM should help coordination if there is
confusion in unity of command.
Principles of Organization Design
DelegationProcess in which superior assigns task, responsibility and
autonomy to subordinate Degree of delegation:
Gather information for manager Give alternatives for manager to select Make recommendation for manager to approve Make decision but inform manager before proceeding Take action but inform manager Take action, need not inform manager
Efficiency AND Superior Execution
Control the Strategy means of motivating staff to work at organizational
goals Statement of goals Set of assumptions or forecasts (environmental) Qualitative statement of how business will change Specific action steps for implementation Set of financial projections
provide information and feedback (information technology)
Efficiency AND Superior Execution
Develop a Strong Adaptive Culture characterized by: Bias for action - autonomy, risk-taking,
entrepreneurship (intra) Coherent mission - sticks to what is important, close
to customers Structured for flexibility
Efficiency AND Superior Execution
Create a Meaningful Reward System Generously reward those who reach objectives and deny
reward to those who don’t. payoff should be a major piece of total compensation
and… should extend to everyone. administration is paramount (timely, consistent, fair) tightly linked to strategic objectives
Every compensation/promotion decision will be carefully scrutinized by all employees.
In designing reward systems, jobs need to be defined in terms of the results to be accomplished, not duties and responsibilities.