Review from last class

1. Organization theory is a different way of thinking about organizations. 2. In BA 152, we examine organization-level issues and the organizations environment. 3. We will rely on the rational-contingency perspective. 4. But appreciate that the underlying paradigm is likely changing. 5. Questions?

Strategy and Organizational Design

BA 152

Organization Strategy, Design, and Effectiveness

External Environment
Opportunities Threats Uncertainty Resource Availability

Organization Design Strategic Management

Structural Form learning vs. efficiency Information and control systems Production technology Human resource policies, incentives Organizational culture Interorganizational linkages

Effectiveness Outcomes
Resources Efficiency Goal attainment Stakeholders Competing values Balanced Scorecard

CEO, Top Management Team

Define mission, official goals

Select operational goals and strategies

Internal Environment
Strengths Weaknesses Distinctive competence Leadership Style Past Performance

Organization Strategy, Design, and Effectiveness

Strategic Management
Define mission, official goals Select operational goals and strategies

Organizational Goals
Mission the organizations reason for being
Wal-Mart: "To give ordinary folk the chance to buy the same thing as rich people" Mary Kay Cosmetics: "To give unlimited opportunity to women" 3M: "To solve unsolved problems innovatively" Merck: "To preserve and improve human life Walt Disney: "To make people happy"

Organizational Goals
Official Goals - formal statement of that reason (usually found in Annual Report)

Organizational Goals
Operative Goals what is actually sought
Overall Performance Productivity Resource Acquisition and Management Market Share Employee Development Innovation and Learning

Examples of Official Goals

Bertelsmann
Trim debt Achieve EBITA return of 10% in all divisions ahead of 2005 IPO Return authority to division heads Refocus on core businesses (television, magazines, books, book clubs, music) Sell specialty publisher & e-commerce unit Expand U. S. music and magazine holdings and European television arm

Organizational Goals
Purpose of Goals
Provide legitimacy (both internal & external) Give direction and motivation to employees Provide decision guidelines Serve as criteria for determining how well the organization is doing

What Determines an Organizations Goals?

Nature of the environment and culture (or is it vice-versa?) Environmental opportunities and threats Organizational strengths and weaknesses Top management choices

Organizational Goals
What is the KFBS mission? What are our official goals? What are our operative goals? How do we go about attempting to achieve these goals?

Organizational Strategies
What is a strategy?
A plan for interacting with the competitive environment to achieve organizational goals. (Daft)

Strategies in the Video Game Industry?

Microsoft Using a PC-Centric strategy with its X-Box. Sony Creating an around-the-clock entertainment portal with PlayStation 2 Nintendo Focusing on gameappliance strategy with GameCube

Organizational Strategies
What is a strategy?
A plan for interacting with the competitive environment to achieve organizational goals. (Daft)

Michael Porters Approach to Strategy

Porters Competitive Strategies

Competitive Advantage Low Cost Uniqueness Low-cost leadership

Broad Competitive Scope Narrow

Differentiation

Focused Low-cost leadership

Focused differentiation

Porters Competitive Strategies

Competitive Advantage Low Cost Uniqueness

Broad Competitive Scope Narrow

Organizational Strategies
What is KFBS strategy?
Low-cost leadership?
Differentiation? Focused, low-cost leadership?

Focused, differentiation?
Some combination?

Organizational Strategies
Can/should you try to do more than one?
Why or why not?

How do you know if your strategy is working?

Next Time
Organizational Effectiveness