Description
Capability management is a high-level integrative management function, with particular application in the context of defence.
Building Resource Strengths and Organizational Capabilities
11-1 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Crafting vs. Executing Strategy
Crafting the Strategy ? Primarily a market-driven activity ? Successful strategy making depends on
? ?
Executing the Strategy ? Primarily an operations-driven activity ? Successful strategy execution depends on
?
?
?
?
Business vision Perceptive analysis of market conditions and company resources and capabilities Attracting and pleasing customers Outcompeting rivals Using company resources and capabilities to forge a competitive advantage
Good organization-building and people management ? Creating a strategysupportive culture ? Continuous improvement ? Getting things done and delivering good results
11-2 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Executing the Strategy
? An action-oriented, make-things happen task involving
management’s ability to
? Direct ? Achieve
organizational change
Implementation involves . . .
continuous improvement in operations and business processes
? Move toward operating excellence
? Create
and nurture a strategy-supportive culture meet or beat performance targets
? Consistently
? Tougher and more time-consuming than crafting strategy
11-3 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Why Executing Strategy Is a Tough Management Job
? The demanding variety of managerial
activities to be performed
? Numerous ways to tackle each activity ? Requires good people management skills ? Requires launching and managing
a variety of initiatives simultaneously
? Number of bedeviling issues to be worked out ? Battling resistance to change
? Hard to integrate efforts of many different work groups
into a smoothly-functioning whole
11-4 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Implementing a Newly Chosen Strategy Requires Adept Leadership
? Implementing a new strategy
takes adept leadership to
? Convincingly
communicate reasons for the new strategy pockets of doubt
? Overcome
? Build
consensus and enthusiasm
commitment of concerned parties
? Secure
? Get
11-5 McGraw-Hill/Irwin
all implementation pieces in place and coordinated
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Who Are the Strategy Implementers?
? Implementing and executing strategy involves a
company’s whole management team and all employees
? Just
as every part of a watch plays a role in making the watch function properly, it takes all pieces of an organization working cohesively for a strategy to be well-executed
? Top-level managers must lead the process
and orchestrate major initiatives
? But they must rely on the cooperation of ? Middle and lower-level managers to see that things go
well in the various parts of the organization and ? Employees to perform their roles competently on a daily basis
11-6 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
What Are the Goals of the Strategy Implementing-Executing Process?
? Unite total organization behind strategy ? See that activities are done in a manner that is conducive
to first-rate strategy execution
? Generate commitment so an enthusiastic
crusade emerges to carry out strategy
? Fit how organization conducts its
operations to requirements of strategy
11-7 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Characteristics of the Strategy Implementation Process
? Every manager has an active role ? No proven “formula” for implementing
particular types of strategies
? There are guidelines, but no
absolute rules and “must do it this way” rules
? Many ways to proceed that are
capable of working
? Cuts across many aspects of “how to manage”
11-8 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Fig. 11.1: The Eight Actions of Implementing and Executing Strategy
11-9 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
BUILDING A CAPABLE ORGANIZATION — WHAT IS INVOLVED?
McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Putting Together a Strong Management Team
? Assembling a capable management team is a cornerstone
of the organization-building task
? Find the right people to fill each slot
? Existing
management team may be suitable
? Core
executive group may need strengthening
? Promote from within ? Bring in skilled outsiders
11-11 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Selecting the Management Team: Key Considerations
? Determine mix of
? Backgrounds ? Experiences ? Beliefs ? Styles
and know-how
and values
of managing and personalities
? Personal chemistry must be right
? Talent base needs to be appropriate ? Picking a solid management team needs to be acted on
early in implementation process
11-12 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Building Core Competences and Competitive Capabilities
? Crafting the strategy involves
? Identifying
the desired competences and capabilities to build into the strategy and help achieve competitive advantage
? Good strategy execution requires
? Putting
desired competences and capabilities in place,
? Upgrading ? Modifying
them as needed, and
them as market conditions evolve
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
11-13 McGraw-Hill/Irwin
Three-Stage Process of Developing Competences and Capabilities
1. Develop ability to do something 2. As experience builds, ability can translate into a competence or capability 3. If ability continues to be polished and refined, it can become a distinctive competence, providing a potential competitive advantage!
11-14 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Competitive Advantage Potential of Competences and Capabilities
When it is difficult to outstrategize rivals with a superior strategy . . . . . . Best avenue to industry leadership is to out-compete rivals with superior strategy execution!
Building competences and capabilities rivals can’t match is one of the best ways to out-compete them!
11-15 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Strategic Role of Employee Training
? Training plays a critical role in implementation when a
firm shifts to a strategy requiring different
? Skills
or core competences ? Competitive capabilities ? Managerial approaches ? Operating methods
? Types of training approaches
? Internal
“universities” ? Orientation sessions for new employees ? Tuition reimbursement programs ? Online training courses
11-16 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Pinpointing Strategy-Critical Activities: Ask 2 Questions
1. What functions or business processes have to be performed extra well or in timely fashion to achieve competitive advantage?
2. In what value-chain activities would poor execution seriously impair strategic success?
11-17 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Potential Advantages of Outsourcing Non-Critical Activities
? Decrease internal bureaucracies ? Flatten organization structure ? Speed decision-making ? Provide firm with heightened strategic focus ? Improve a firm’s innovative capacity
? Increase competitive responsiveness
Outsourcing makes strategic sense when an outsider can perform an activity cheaper or better.
11-18 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Appeal of Outsourcing
? Outsourcing non-critical activities allows a firm to
concentrate its energies and resources on those valuechain activities where it
? Can ? Can
create unique value be best in the industry
? Needs
direct control to
? Build core competences ? Achieve competitive advantage ? Manage key customer-supplier-distributor relationships
11-19 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Potential Advantages of Partnering
? By building, improving, and then leveraging
partnerships, a firm enhances its overall capabilities and builds resource strengths that
? Deliver
? Rivals
value to customers
can’t quite match
? Consequently
pave the way for competitive success
Partnering makes strategic sense when the result is to enhance a company’s competences and competitive capabilities.
11-20 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Dangers of Outsourcing
? A company must guard against hollowing out its
knowledge base and capabilities
? Way to guard against pitfalls of outsourcing
? Avoid ? Use
sourcing key components from a single supplier
two or three suppliers to minimize dependence on any one supplier evaluate suppliers
? Regularly ? Work
11-21 McGraw-Hill/Irwin
closely with key suppliers
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Step 2: Make Strategy-Critical Activities the Main Building Blocks
? Assign managers of strategy-critical activities a visible,
influential position
? Avoid fragmenting responsibility for strategy-critical
activities across many departments
? Provide coordinating linkages
Assign managers key roles
between related work groups
? Meld
Primary activities
Support functions
into a valuable competitive capability
Strategic relationships
Coordination
Valuable capability
11-22 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Why Structure Follows Strategy
? Changes in strategy typically require a new or modified
organization structure
?A
new strategy often involves different skills, different key activities, and different staffing and organizational requirements a new strategy signals a need to reassess and often modify the organization structure
? Hence,
? How work is structured is a means to an end –
not an end in itself!
11-23 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Examples of Fragmented Strategy-Critical Activities
? Filling customer orders ? Speeding new products to market ? Improving product quality ? Supply chain management ? Building capability to conduct business via the Internet ? Obtaining feedback from customers, making product
modifications to meet their needs
11-24 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Advantages of a Decentralized Structure
? Creates a more horizontal structure with fewer management layers ? Managers and employees develop their own answers and action plans
? Make
decisions in their areas of responsibility ? Held accountable for results
? Shortens organizational response times and spurs
? New
ideas ? Creative thinking and innovation ? Greater involvement of managers and employees
? Jobs can be defined more broadly ? Fewer managers are needed ? Electronic communication systems provide quick, direct access to
data ? Genuine gains in morale and productivity
11-25 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Step 4: Provide for Internal Cross-Unit Coordination
? Classic method of coordinating activities – Have related
units report to single manager
? Upper-level
managers have clout to coordinate efforts of their units
? Support activities should be
woven into structure to
? Maximize ? Contain
performance of primary activities
costs of support activities
? Formal reporting relationships often need to be
supplemented to facilitate coordination
11-26 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Coordinating Mechanisms to Supplement the Basic Organization Structure
? Cross-functional task forces ? Dual reporting relationships
? Informal networking
? Voluntary cooperation
? Incentive compensation tied
to group performance
? Teamwork and cross-
departmental cooperation
11-27 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Step 5: Provide for Collaboration With Outsiders
? Need multiple ties at multiple levels to ensure
? Communication
? Coordination
and control
? Find ways to produce collaborative efforts to
enhance firm’s capabilities and resource strengths
? While collaborative relationships present opportunities,
nothing valuable is realized until the relationship develops into an engine for better organizational performance
11-28 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Roles of Relationship Managers With Strategic Partners
? Get right people together ? Promote good rapport
? See plans for specific activities
are developed and implemented
? Help adjust internal procedures
and communication systems to
? Iron
out operating dissimilarities
? Nurture
11-29 McGraw-Hill/Irwin
interpersonal ties
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Perspectives on Organizing
? All basic organization designs have strategy-related
strengths and weaknesses
? No ideal organization design exists ? To do a good job of matching
structure to strategy
? Pick
a basic design
as needed
? Modify
? Supplement
with appropriate coordinating, networking, and communication mechanisms to support effective execution of the strategy
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
11-30 McGraw-Hill/Irwin
Drawbacks of Centralized Authoritarian Structures
? Centralized or authoritarian structures have often
turned out to be a liability where
? Customer ? Product ? Flexible
preferences shift from standardized to customized products life-cycles grow shorter manufacturing replaces mass production want to be treated as individuals of technological change accelerates conditions are fluid
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
? Customers ? Pace
? Market
11-31 McGraw-Hill/Irwin
Characteristics of Organizations of the Future
? Fewer barriers between
? Different
vertical ranks ? Functions and disciplines ? Units in different geographic locations ? Company and its suppliers, distributors, strategic allies, and customers
? Capacity for change and rapid learning
Change & Learning
? Collaborative efforts among people in different
functions and geographic locations ? Extensive use of Internet technology and e-commerce business practices
11-32 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
doc_396726044.ppt
Capability management is a high-level integrative management function, with particular application in the context of defence.
Building Resource Strengths and Organizational Capabilities
11-1 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Crafting vs. Executing Strategy
Crafting the Strategy ? Primarily a market-driven activity ? Successful strategy making depends on
? ?
Executing the Strategy ? Primarily an operations-driven activity ? Successful strategy execution depends on
?
?
?
?
Business vision Perceptive analysis of market conditions and company resources and capabilities Attracting and pleasing customers Outcompeting rivals Using company resources and capabilities to forge a competitive advantage
Good organization-building and people management ? Creating a strategysupportive culture ? Continuous improvement ? Getting things done and delivering good results
11-2 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Executing the Strategy
? An action-oriented, make-things happen task involving
management’s ability to
? Direct ? Achieve
organizational change
Implementation involves . . .
continuous improvement in operations and business processes
? Move toward operating excellence
? Create
and nurture a strategy-supportive culture meet or beat performance targets
? Consistently
? Tougher and more time-consuming than crafting strategy
11-3 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Why Executing Strategy Is a Tough Management Job
? The demanding variety of managerial
activities to be performed
? Numerous ways to tackle each activity ? Requires good people management skills ? Requires launching and managing
a variety of initiatives simultaneously
? Number of bedeviling issues to be worked out ? Battling resistance to change
? Hard to integrate efforts of many different work groups
into a smoothly-functioning whole
11-4 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Implementing a Newly Chosen Strategy Requires Adept Leadership
? Implementing a new strategy
takes adept leadership to
? Convincingly
communicate reasons for the new strategy pockets of doubt
? Overcome
? Build
consensus and enthusiasm
commitment of concerned parties
? Secure
? Get
11-5 McGraw-Hill/Irwin
all implementation pieces in place and coordinated
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Who Are the Strategy Implementers?
? Implementing and executing strategy involves a
company’s whole management team and all employees
? Just
as every part of a watch plays a role in making the watch function properly, it takes all pieces of an organization working cohesively for a strategy to be well-executed
? Top-level managers must lead the process
and orchestrate major initiatives
? But they must rely on the cooperation of ? Middle and lower-level managers to see that things go
well in the various parts of the organization and ? Employees to perform their roles competently on a daily basis
11-6 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
What Are the Goals of the Strategy Implementing-Executing Process?
? Unite total organization behind strategy ? See that activities are done in a manner that is conducive
to first-rate strategy execution
? Generate commitment so an enthusiastic
crusade emerges to carry out strategy
? Fit how organization conducts its
operations to requirements of strategy
11-7 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Characteristics of the Strategy Implementation Process
? Every manager has an active role ? No proven “formula” for implementing
particular types of strategies
? There are guidelines, but no
absolute rules and “must do it this way” rules
? Many ways to proceed that are
capable of working
? Cuts across many aspects of “how to manage”
11-8 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Fig. 11.1: The Eight Actions of Implementing and Executing Strategy
11-9 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
BUILDING A CAPABLE ORGANIZATION — WHAT IS INVOLVED?
McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Putting Together a Strong Management Team
? Assembling a capable management team is a cornerstone
of the organization-building task
? Find the right people to fill each slot
? Existing
management team may be suitable
? Core
executive group may need strengthening
? Promote from within ? Bring in skilled outsiders
11-11 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Selecting the Management Team: Key Considerations
? Determine mix of
? Backgrounds ? Experiences ? Beliefs ? Styles
and know-how
and values
of managing and personalities
? Personal chemistry must be right
? Talent base needs to be appropriate ? Picking a solid management team needs to be acted on
early in implementation process
11-12 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Building Core Competences and Competitive Capabilities
? Crafting the strategy involves
? Identifying
the desired competences and capabilities to build into the strategy and help achieve competitive advantage
? Good strategy execution requires
? Putting
desired competences and capabilities in place,
? Upgrading ? Modifying
them as needed, and
them as market conditions evolve
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
11-13 McGraw-Hill/Irwin
Three-Stage Process of Developing Competences and Capabilities
1. Develop ability to do something 2. As experience builds, ability can translate into a competence or capability 3. If ability continues to be polished and refined, it can become a distinctive competence, providing a potential competitive advantage!
11-14 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Competitive Advantage Potential of Competences and Capabilities
When it is difficult to outstrategize rivals with a superior strategy . . . . . . Best avenue to industry leadership is to out-compete rivals with superior strategy execution!
Building competences and capabilities rivals can’t match is one of the best ways to out-compete them!
11-15 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Strategic Role of Employee Training
? Training plays a critical role in implementation when a
firm shifts to a strategy requiring different
? Skills
or core competences ? Competitive capabilities ? Managerial approaches ? Operating methods
? Types of training approaches
? Internal
“universities” ? Orientation sessions for new employees ? Tuition reimbursement programs ? Online training courses
11-16 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Pinpointing Strategy-Critical Activities: Ask 2 Questions
1. What functions or business processes have to be performed extra well or in timely fashion to achieve competitive advantage?
2. In what value-chain activities would poor execution seriously impair strategic success?
11-17 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Potential Advantages of Outsourcing Non-Critical Activities
? Decrease internal bureaucracies ? Flatten organization structure ? Speed decision-making ? Provide firm with heightened strategic focus ? Improve a firm’s innovative capacity
? Increase competitive responsiveness
Outsourcing makes strategic sense when an outsider can perform an activity cheaper or better.
11-18 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Appeal of Outsourcing
? Outsourcing non-critical activities allows a firm to
concentrate its energies and resources on those valuechain activities where it
? Can ? Can
create unique value be best in the industry
? Needs
direct control to
? Build core competences ? Achieve competitive advantage ? Manage key customer-supplier-distributor relationships
11-19 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Potential Advantages of Partnering
? By building, improving, and then leveraging
partnerships, a firm enhances its overall capabilities and builds resource strengths that
? Deliver
? Rivals
value to customers
can’t quite match
? Consequently
pave the way for competitive success
Partnering makes strategic sense when the result is to enhance a company’s competences and competitive capabilities.
11-20 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Dangers of Outsourcing
? A company must guard against hollowing out its
knowledge base and capabilities
? Way to guard against pitfalls of outsourcing
? Avoid ? Use
sourcing key components from a single supplier
two or three suppliers to minimize dependence on any one supplier evaluate suppliers
? Regularly ? Work
11-21 McGraw-Hill/Irwin
closely with key suppliers
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Step 2: Make Strategy-Critical Activities the Main Building Blocks
? Assign managers of strategy-critical activities a visible,
influential position
? Avoid fragmenting responsibility for strategy-critical
activities across many departments
? Provide coordinating linkages
Assign managers key roles
between related work groups
? Meld
Primary activities
Support functions
into a valuable competitive capability
Strategic relationships
Coordination
Valuable capability
11-22 McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Why Structure Follows Strategy
? Changes in strategy typically require a new or modified
organization structure
?A
new strategy often involves different skills, different key activities, and different staffing and organizational requirements a new strategy signals a need to reassess and often modify the organization structure
? Hence,
? How work is structured is a means to an end –
not an end in itself!
11-23 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Examples of Fragmented Strategy-Critical Activities
? Filling customer orders ? Speeding new products to market ? Improving product quality ? Supply chain management ? Building capability to conduct business via the Internet ? Obtaining feedback from customers, making product
modifications to meet their needs
11-24 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Advantages of a Decentralized Structure
? Creates a more horizontal structure with fewer management layers ? Managers and employees develop their own answers and action plans
? Make
decisions in their areas of responsibility ? Held accountable for results
? Shortens organizational response times and spurs
? New
ideas ? Creative thinking and innovation ? Greater involvement of managers and employees
? Jobs can be defined more broadly ? Fewer managers are needed ? Electronic communication systems provide quick, direct access to
data ? Genuine gains in morale and productivity
11-25 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Step 4: Provide for Internal Cross-Unit Coordination
? Classic method of coordinating activities – Have related
units report to single manager
? Upper-level
managers have clout to coordinate efforts of their units
? Support activities should be
woven into structure to
? Maximize ? Contain
performance of primary activities
costs of support activities
? Formal reporting relationships often need to be
supplemented to facilitate coordination
11-26 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Coordinating Mechanisms to Supplement the Basic Organization Structure
? Cross-functional task forces ? Dual reporting relationships
? Informal networking
? Voluntary cooperation
? Incentive compensation tied
to group performance
? Teamwork and cross-
departmental cooperation
11-27 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Step 5: Provide for Collaboration With Outsiders
? Need multiple ties at multiple levels to ensure
? Communication
? Coordination
and control
? Find ways to produce collaborative efforts to
enhance firm’s capabilities and resource strengths
? While collaborative relationships present opportunities,
nothing valuable is realized until the relationship develops into an engine for better organizational performance
11-28 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Roles of Relationship Managers With Strategic Partners
? Get right people together ? Promote good rapport
? See plans for specific activities
are developed and implemented
? Help adjust internal procedures
and communication systems to
? Iron
out operating dissimilarities
? Nurture
11-29 McGraw-Hill/Irwin
interpersonal ties
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
Perspectives on Organizing
? All basic organization designs have strategy-related
strengths and weaknesses
? No ideal organization design exists ? To do a good job of matching
structure to strategy
? Pick
a basic design
as needed
? Modify
? Supplement
with appropriate coordinating, networking, and communication mechanisms to support effective execution of the strategy
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
11-30 McGraw-Hill/Irwin
Drawbacks of Centralized Authoritarian Structures
? Centralized or authoritarian structures have often
turned out to be a liability where
? Customer ? Product ? Flexible
preferences shift from standardized to customized products life-cycles grow shorter manufacturing replaces mass production want to be treated as individuals of technological change accelerates conditions are fluid
© 2005 The McGraw-Hill Companies, Inc. All rights reserved.
? Customers ? Pace
? Market
11-31 McGraw-Hill/Irwin
Characteristics of Organizations of the Future
? Fewer barriers between
? Different
vertical ranks ? Functions and disciplines ? Units in different geographic locations ? Company and its suppliers, distributors, strategic allies, and customers
? Capacity for change and rapid learning
Change & Learning
? Collaborative efforts among people in different
functions and geographic locations ? Extensive use of Internet technology and e-commerce business practices
11-32 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
doc_396726044.ppt