case analysis
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3400219OrganizationStructureD.pdf
MGMT 4002: Strategy Implementation
Organization Structure
Bachelor of Management Program
Faculty of Management
Winter 2019
Dr. Ramon Baltazar
© Baltazar 2019
STRATEGIC MANAGEMENT
ORGANIZATION
PERFORMANCE
ORGANIZATION
STRATEGY
ORGANIZATION
CULTURE
ORGANISATIONAL
CHANGE & LEADERSHIP
IMPLEMENTING STRATEGY
© Baltazar 2019
CONTROL
SYSTEMS
ORGANIZATION
STRUCTURE
PEOPLECULTURE
EXTERNAL
ENVIRONMENT
EXTERNAL
ENVIRONMENT
STRATEGY
COMPETITIVE
EMPHASIS
PRODUCT
MARKET SCOPE
GOALS
DESS ET AL. READING
Content and key messages?
ORGANIZATIONAL STRUCTURE
© Baltazar 2019
“Every organized human activity – from making to placing a man on
the moon – gives rise to two fundamental and opposing
requirements: the division of labor into various tasks and the
coordination of these tasks to accomplish the activity.” - Henry Mintzberg
“Organizing is what you do before you do something, so that when you do it, it is not all mixed up.”
- A.A. Milne
“Structure follows strategy.” - Alfred Chandler
STRUCTURE DEFINTION AND
DISCUSSION TOPICS
• Definition: Roles, responsibilities, and reporting
relationships
• Discussion topics
– Characteristics
– Forms
– Caveats
© Baltazar 2019
STRUCTURE CHARACTERISTICS
• Degree of specialization
• Standardization and
formalization
• Centralization of decision-
making
• Span of control and height
• Communication patterns
• Mechanistic or organic
© Baltazar 2019
Upper Mgt
Middle Mgt
Front line
Supervisory
Upper Mgt
Middle Mgt
Front line
Supervisory
Upper Mgt
Middle Mgt
Front line
Supervisory
= locus of decision making authority
HIERARCHY
• Mechanistic structures are
highly hierarchical, organic
structures are not
• Is hierarchy good or bad for
the organization?
© Baltazar 2019
STRUCTURE FORMS
• Organizational structures are normally depicted by organizational charts.
Such charts cluster into three fundamental forms
– Functional
– Self-contained
– Matrix
• The forms are
– Level specific
– Rarely pure in real organizations
– Grounded in a foundational form in the best organizations
© Baltazar 2019
© Baltazar 2019
FUNCTIONAL STRUCTURE (Weber)
General
Manager
Operations
Manager
Marketing
Manager
Finance
Manager
• Organization around specific knowledge areas
• Tends to be mechanistic and hierarchical
• Advantages
– Efficiency through specialization
– Supports professional identity and career paths
– Easier supervision
• Disadvantages
– Emphasizes subunit goals more than organization
goals
– Promotes structural differentiation
– Poorer coordination that requires more controls
– Poorer development of general managers
© Baltazar 2019
SELF CONTAINED STRUCTURE (Sloan)
General
Manager
Western Region
Manager
Central Region
Manager
Eastern Region
Manager
• Divisional organization around geography, products, clients, SBUs
• Tends to be organic and less hierarchical
• Advantages
– Allows tailoring to suit geography, products, clients
– Building block structure accommodates growth
– Allows development of general managers
• Disadvantages
– Low consistency and control
– Duplication
MATRIX STRUCTURE (Galbraith)
• Organization around dual bases of departmentation
– Often a project structure
• Tends to be organic and less hierarchical
• Advantages
– Dual focus provides greater coverage of considerations
– Potential for beneficial knowledge sharing
• Disadvantages
– May result in confusion and contradictory policies
– May dilute accountability
– May trigger turf battles
General Manager
Function1 VP Function2 VP
Unit2 VP
Unit1 VP
Subordinate22
Subordinate12Subordinate11
Subordinate21
© Baltazar 2019
CAVEAT 1:
NATIONAL CULTURE AND STRUCTURE
© Baltazar 2019
Source: Hofstede, 2001
https://www.hofstede-
insights.com/product/compare-countries/
CAVEAT 2 –
STRATEGY AND STRUCTURE
• What structural characteristics and forms are aligned to
which strategies at the
– Corporate level?
– Business level?
– International level? (E.g. P& G)
CAVEAT 3 –
STRUCTURE AND REWARD
SYSTEMS
What types of reward systems are suitable for
various structures, and why?
CAVEAT 4 –
STRUCTURE AND MANAGEMENT
STYLE
Based on what you have learned about
managing people, which management styles
are suitable for which strategies, and why?
