International Analysis of Organization Design
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OTMT608.Session2.pptOTMT 608 SESSION 2 AGENDA
- Team Assignments for Case Analysis Presentation
- Organizational Strategy
- Porter’s Competitive Strategies
- Goal Setting Exercise
- Environmental Sectors of an Organization
- Southwest Airlines Case Study Class Exercise
- What’s Ahead for Week 3
Chapters 2 and 4 of the text
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THREE LEVELS OF STRATEGY IN ORGANIZATIONS
0
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Talk about ebay
Top Management
Sets Corporate
Strategy: PepsiCo
Manufacturing
& Distribution
Human
Resources
Research
& Development
Finance
& Accounting
Strategic
Business Unit 1:
Pepsi Bottling Group
Strategic
Business Unit 2:
Frito-Lay
Strategic
Business Unit 3:
Fast Food Restaurants
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COMMON ORGANIZATIONAL TERMS
Mission: The Organization’s Reason for Existence
Best Mission Statements: “To Do X, So That Y”
- Machias Savings Bank Mission Statement: “To be exceptional in every relationship, in every product developed, in every service rendered and every promise made.”
- Machias Savings Bank Vision: “To provide the most exceptional banking experience in the state of Maine.”
Objectives: What Do We Need to Do?
Strategies: How Will We Do It?
PORTER’S COMPETITIVE STRATEGIES
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Industry Analysis: Porter’s Five Forces
- Which competitive strategy is appropriate?
- Five competitive forces determine industry attractiveness and profitability
- Threat of new entrants and barriers to entry
- Threat of substitutes
- Bargaining power of buyers
- Bargaining power of suppliers
- Existing rivalry
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SETTING GOALS
PROPER GOAL SETTING
- Make Them Attainable With a Reach
- Repeat The Desired Outcome
- Be Very Specific
- Provide a Time Period for Completion
- Make Them Meaningful, Measurable and Public
- Have Feedback Systems in Place
- Set Up for Short Term Wins When Possible
- Analyze Results for Greater Future Success
BUSINESS-LEVEL STRATEGY
The role of competitive advantage
- How should a corporation compete in each of its businesses?
- Competitive advantage sets a business apart from its competitors based on core competencies
- Major value-creating skills and core capabilities
- Marketing abilities (Nike)
- Process engineering skills (Frito-Lay)
- Strong basic research (3M)
- Direct selling distribution channel (Dell)
- Superior HRM systems (Southwest Airlines)
- Superior assets or resources
- Information systems (Wal-Mart)
- Sustained capital investment and access to capital (Microsoft)
- Amenities to attract highly skilled employees (Deliotte-Touche)
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MILES AND SNOW TYPOLOGY
- Prospector – Innovate, Take Risks, Seek Opportunities and Grow
- Defender – Desires Stability, Wants to Hold on to Status Quo. Wants Internal Efficiency to Produce Reliable, High Quality Products for Steady Customers
- Analyzer – Blends Efficient Production of Current Product With Creative Development of New Product Lines
- Reactor – Respond to Environmental Threats and Opportunities ad hoc.
ASSESSING ORGANIZATIONAL EFFECTIVENESS
- Goal Approach
- Resource Based Approach
- Internal Process Approach
- Strategic Constituents Approach
IS YOUR STRATEGY WORKING?
Three Elements of Good Strategy
- Strong Diagnosis of Existing Critical Issues in Organization's Environment
- A Guiding Policy for How the Organization Will Cope With Environment
- Coherent Action Steps, Specifies How Organization Will Achieve Strategic Goals
Three Elements of Bad Strategy
- Fails to Define the Problem
- Based on Weak/Fuzzy Objectives
- Superficial Observations and Use of Tired Buzzwords
Source: “Good Strategy, Bad Strategy: The Difference and Why It Matters.” Richard Rumult
Identify Current
Mission, Objectives
& Strategy
The Strategic
Management Process
Formulate
Strategies
Implement
Strategies
Evaluate
Results
1
Analyze
Resources
Note
Weaknesses
and Strengths
Analyze
Environment
Note
Threats and
Opportunities
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3
4
5
6
7
8
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