Final Project Part I

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Strategy, Organiza.on Design, and Effec.veness

Organiza(on Theory and Design Twel%h Edi+on Richard L. Da%

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Top Management Role in Organiza+on Direc+on, Design, and Effec+veness

Organiza)onal goal - a desired state of affairs that an organiza+on aCempts to reach

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Organiza+onal Purpose

Strategic intent - organiza+on’s energies and resources are directed toward a focused, unifying, and compelling goal

Opera)ng Goals • Overall Performance • Resources • Market • Employee Development • Innova+on and Change • Produc+vity

• Mission • Compe++ve Advantage • Core Competence

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Mission Statement for CVS Health

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Organiza+onal Opera+ng Goals

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Goals Types and Purposes

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Selec+ng Strategy and Design

•  A strategy is a plan for interac+ng with the compe++ve environment

•  Managers must select specific strategy design

•  Models exist to aid in formula+ng strategy:

– Porter’s Five Forces

– Miles and Snow’s Strategy Typology

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Porter’s Compe++ve Strategies

Differen)a)on strategy – to dis+nguish products or services from others in the industry

Low-Cost Leadership – increase market share by keeping costs low compared to compe+tors

Organiza)ons may choose to focus broad or narrow in reaching mul)ple markets.

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Porter’s Compe++ve Strategies

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Miles and Snow’s Strategy Typology

•  Prospector –  Learning orienta+on; flexible, fluid, decentralized structure –  Values crea+vity, risk-taking, and innova+on

•  Defender –  Efficiency orienta+on; centralized authority and +ght cost control –  Emphasis on produc+on efficiency, low overhead

•  Analyzer –  Balances efficiency and learning; +ght cost control with flexibility and

adaptability –  Emphasis on crea+vity, research, risk-taking for innova+on

•  Reactor –  No clear organiza+onal approach; design characteris+cs may shi%

abruptly depending on current needs

Managers should seek to formulate strategy that matches the demands of the external environment

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How Strategy Affects Organiza+on Design

Managers must design the organiza+on to support the firm’s

compe++ve strategy

Strategy impacts internal organiza)on characteris)cs

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Organiza.on Design

Outcomes of Strategy

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Con+ngency Factors Affec+ng Organiza+on Design

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Assessing Organiza+onal Effec+veness

Measuring Effec)veness: →  The Goal Approach →  The Resource-Based Approach →  The Internal Process Approach →  The Strategic Cons+tuents Approach

Effec)veness takes into considera(on a range of variables at both the organiza(onal and departmental

levels.

Efficiency relates to the working of the organiza(on and amount of resources used to produce output.

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Indicators of Organiza+onal Effec+veness

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Approaches to Measuring Organiza+onal Effec+veness

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An Integrated Effec+veness Model

•  Compe)ng values model tries to balance concern with various parts of the organiza+on

•  The human rela)ons emphasis incorporates the values of an internal focus and flexible structure

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Four Approaches to Effec+veness Values

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Effec+veness Values for Two Organiza+ons

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Design Essen+als

v Strategic intent includes compe++ve advantage and core competence v Strategies may include many techniques

vOrganiza+onal effec+veness must be assessed

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Design Essen+als

v No guaranteed measure provides an unequivocal assessment of performance

v No approach is suitable for every organiza+on

©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21