Professional Documents
Culture Documents
Implementation
Adip Roy
Lesson 6
Organization Structure
• Simple Organization Structure – Owner with few
employees, tasks are accomplished through direct
supervision
• Functional Organization Structure – the tasks are divided
by “functional” groups
• Divisional Structure – autonomous unit, governed by
corporate office
• Strategic Business Unit – divisional structure but they are
grouped together based on some common strategic
elements (product/market)
• Holding company structure – unrelated business and
“holding” (little managerial involvement)
• Matrix Organization Structure – dual channel of authority,
evaluation and control. (mix of staff & line functions)
Organizational Structure
Vertical Horizontal
• SpecializedTasks • Shared tasks
• Hierarchy of authority • Flexible authority
• Rules and regulations • Few rules and regulations
• Vertical communications • Horizontal
and formal reporting communications and
systems sharing information
• Centralized decision • Decentralized decision
making making
• Emphasis on efficiency • Emphasis on learning &
growth
Interrelationship
Determines
STRATEGY STRUCTURE
Impacts
Views of Organization
Characteristic 20th Century 21st Century
Organization Pyramid Web or Network
Style Structured Flexible
Focus Internal External
Source of Strength Stability Flexible
Offerings Mass production Mass customization
Operation Vertical integration Virtual integration
Financials Quarterly Real time
Leadership Dogmatic Inspirational
Inventories Months Hours
Thinking on Leadership and Organization
Elements of Strategic Leadership
Managing Change
Strategic Vision
Governance & Management
Culture
Communication Network
Pragmatism
Managing Change
Pragmatism is a philosophical tradition that began in the United States
around 1870. Its origins are often attributed to the philosophers William
James, John Dewey, and Charles Sanders Peirce. Peirce later described it in
his pragmatic maxim: "Consider the practical effects of the objects of your
conception. Then, your conception of those effects is the whole of your
conception of the object.“
Employees spend
working life
in environment
Employee of mediocrity
dissatisfaction
(but can’t easily quit) Emphasis
Narrow design on rules
of jobs vs. pleasing
customers
No incentive for Complaints met by
cooperative relationship Training emphasizes
indifference or Success =
to obtain better service hostility learning rules
not making
mistakes
Service not focused
Jobs are boring and on customers’ needs
repetitive; employees
unresponsive Good wages/benefits
high job security
Resentment at inflexibility and
lack of employee initiative; Promotion
and pay
complaints to employees increases based Initiative is
discouraged
on longevity,
lack of mistakes
Source: Schlesinger and Heskett; see Services Marketin
Customer dissatisfaction textbook, page 312, for full source information.
COACHING
NON-DIRECTIVE
PUSH
Solving someone’s
problem
Listening to
Understanding
Reflecting
PULL
DIRECTIVE Helping someone
to solve problems
Coaching, Leading and Mentoring
OUTSOURCING – WHY ?
Advantages of Outsourcing
• It can reduce the cost
• It can reduce the need for capital investment
• Manager’s can focus on mission-critical
activities
• Better control
• Careful selection of partner and improve the
learning
Disadvantages of Outsourcing
• Might result in loss of control and reliance on “outsider”
• Can create future competitors
• Skills important for the outsourced activity is ‘lost’
• May draw negative reaction in market/investors
• Crafting a fool-proof agreement might be difficult
• Organization may get into a longer contract and become
un-competitive
• May get into a ‘underbidding supplier’
• Outsourcing may lead to use of lowly paid staff with no
motivation
Summary: Implementation Steps
1. Select the most appropriate strategy
2. Create the ‘right’ organization structure
3. Define the roles and responsibilities
4. Create the ‘right’ processes
5. Frame the appropriate measurement techniques
6. Create the effective feedback/monitoring
methods
7. Make changes as might be needed to achieve
the Mission/Vision/Objectives