STRATEGIC MANAGEMENT - II

Organizational STRUCTURE

PGP I TERM III

1st March 2018
 THE STRUCTURE – CONDUCT – PERFORMANCE (SCP) PARADIGM

The structuralist approach is that a firm’s performance depends on its conduct, which
in turn depends on basic structural factors in the environment. It is a deterministic
worldview in which causality flows from external conditions down to corporate
decisions that seek to exploit these conditions.

BLUE OCEAN STRATEGY

The reconstructionist approach states that ideas and actions of individual players can
shape the economic and industrial landscape. Companies can systematically
reconstruct their industries and reverse the SCP sequence in their favour.
 THE ADAPTIVE CYCLE
The Entrepreneurial Problem
In a new organization, an entrepreneurial insight, perhaps only vaguely defined at first, must be
developed into a concrete definition of an organizational domain: a specific good or service and
a target market or market segment. In an ongoing organization, the entrepreneurial problem has an
added dimension. Because the organization has already obtained a set of "solutions“ to its engineering
and administrative problems, its next attempt at an entrepreneurial "thrust" may be difficult.

The Engineering Problem

The engineering problem involves the creation of a system which operationalizes management's
solution to the entrepreneurial problem. Such a system requires management to select an appropriate
technology (input-transformation- output process) for producing and distributing chosen products or
services and to form new information, communication, and control linkages (or modify existing linkages)
to ensure proper operation of the technology.

The Administrative Problem

The administrative problem, as described by most theories of management, is primarily that of reducing
uncertainty within the organizational system, or, in terms of the present model, of rationalizing and
stabilizing those activities which successfully solved problems faced by the organization during the
entrepreneurial and engineering phases.
Source: Miles, R.E, Snow, C.S, Meyer, A.D., & Coleman Jr., H.J. (1978). Organizational Strategy, Structure, and Process. Academy of Management Review, 3(3): 546-562
 THE STRATEGIC MINDSET

Source: Miles, R.E., Snow, C.S., & Meyer, A.D. (1978). Organizational Strategy, Structure, and Process. Academy of Management Review, 3(3): 546-562.
ENTREPRENEURIAL STRUCTURE
 FUNCTIONAL STRUCTURE

When a business organization is divided into specific departments each performing a

specific function – personnel, purchasing, production, sales, finance, distribution –
this is known as a functional approach.
 DIVISIONAL STRUCTURE

A divisional structure has work divided on the basis of product lines, type of customers
served or geographic area covered. Within divisions, the functional structure may still
operate.
 MATRIX STRUCTURE

The matrix structure is an organizational design that groups employees by both function and product.
NETWORK STRUCTURE
 THE HYBRID ORGANIZATION
In order to cut costs while increasing customer responsiveness, some corporations are integrating
the competitive features of small companies with the resources of large corporations. They are
adopting a hybrid type of organization by decentralizing decision making to the business units
and centralizing administrative functions at the corporate level.

Source: Lentz, Sydney S. (1996). Hybrid Organization Structures: A Path to Cost Savings and Customer Responsiveness. Human Resource Management 35(4): 453-469
 THE HYBRID ORGANIZATION –
A COMPARISON OF DIFFERENT STAFF ROLES
 HOLACRACY
Holacracy is the most widely adopted system of self-management.

Authority and decision making are distributed among fluid “circles” throughout the
organization, and governance is spelled out in a complex constitution.

Teams are the structure

Teams design and govern themselves

Leadership is contextual

Decisions are made closer to the work

Roles are designed that match individual capabilities with organizational goals.
( Zappos has started a system of “badges” that let employees convey at a glance the skills they have
to offer)
 HOLACRACY
These visuals of
Zappos’s structure
may give you a
clearer sense of
what holacracy
looks like in
practice. Think of
them as
snapshots—they’ll
change shape
over time, as the
work evolves.

The example of zappos

 BADGING SYSTEM IN A HOLACRACY
Awarding skill badges is one facet of that self-
organizing work. The various roles in this circle are
meant to support and connect learning
environments, motivate growth, recognize
achievements, and drive employees to develop
personally and professionally.
INTERNATIONAL STRUCTURAL STAGES MODEL
ORGANIZATIONAL CONFIGURATION MODELS