Part of a apple case study

Strategic Change

· The movement of a company away from its present state toward some desired future state to increase its competitive advantage and profitability

· Re-engineering (how)

· Restructuring (what)

Portfolio of Core Competencies

· A core competence is a core skill of a company

· Identifying these central value-creating capabilities tells a company which business opportunity to pursue

Strategy Implementation

· Strategies implemented through:

· Internal new ventures

· Acquisitions

· Strategic alliances

Transition to Organizational Design

· Strategy is implemented through organizational design

· Organization Design - Selecting the combination of organizational structure and control system that let the company create and sustain a competitive advantage

· Organizational structure & control increase profits by:

· Economizing on operating costs

· Enhancing the ability of the company's value creation functions

Organizational Structure

· Provides a vehicle through which managers can coordinate the company’s functions, divisions, and business units

· Shapes the way people behave and determines how they will act in the organizational setting

Building Blocks

· Organizational structure is made up of two parts:

· Differentiation – the way in which a company allocates people & resources

· Vertical – distribute decision making authority

· Horizontal – divide people & tasks into functions

· Integration – means by which a company seeks to coordinate people & functions to accomplish organizational tasks.

Vertical Differentiation

· Specifies the reporting relationships that link people, tasks, and functions at all levels of a company

· Minimal chain of command principle

· an organization should choose a hierarchy with the minimum number of levels of authority necessary to achieve its strategy

Horizontal Differentiation

· Decides how to best group organizational tasks and activities to meet the objectives of a company’s strategy

Horizontal Differentiation Structures

· Functional Structures:

· People are arranged on the basis of their common expertise or because they use the same resources

· Product Structures:

· People are arranged based on their product lines

· Geographic Structures:

· People are arranged by region

· Multidivisional Structures:

· People are arranged according to distinct product lines or business units

Integration

· The extent to which an organization coordinates its value creation activities and makes them interdependent

· Complex differentiation = complex integration

Forms of Integration Mechanisms

· Direct Contact

· Occurs when a company sets up a context where managers can work together to solve problems

· Prevents competition between managers from different divisions

· Interdepartmental Liaison Role

· Gives one manager in each division the responsibility for coordinating with the others

· Temporary Task Forces

· One member of each division is assigned to a task force to solve a problem

· S/he then reports back to her/his respective division

· Permanent Teams

· When issues addressed by a task force reoccur, it is sensible to form permanent teams for problems that have a great deal of integration between functions

Differentiation and Integration

· A company needs to operate the simplest structure consistent with implementing its strategy effectively

· Both differentiation and integration are costly and complex

Organizational Culture

1. Culture is a perception – individual perceive the organizational culture on the basis of what they see, hear, or experience within the organization.

2. Culture is shared – even though individuals may have different backgrounds or work at different organizational levels, they tend to describe the organizations culture in similar terms.

3. Culture is a descriptive term. It’s concerned with how members perceive the organization, not with whether they like it. It describes rather than evaluates.

How Employees Learn Culture

· Stories

· Rituals

· Material symbols

· Language

· Past experience

Factors Influencing the Strength of Culture

· Size and age of the organization

· Rate of employee turnover

· Strength of the original culture

· Clarity of cultural values and beliefs

· Consistent application

Subcultures

· Dominant culture – a system of shared meanings that express the core values of a majority of the organization’s members; it gives the organization its distinct personality.

· Subcultures – mini-cultures within an organization, typically defined by department designations and geographical separation.

· Core values – he primary or dominant , values that are accepted throughout the organization.

Impact to Management Cycle

Controlling

Whether to impose external controls or to allow employees to control their own actions

What criteria should be emphasized in employee evaluations & repercussions will result from exceeding ones budget.

Leading

The degree to which managers are concerned with increasing employee job satisfaction

What leadership styles are appropriate

Planning

The degree of risk that plans should contain

Whether plans should be developed by individuals or teams & the degree of environmental scanning in which management will engage

Organizing

How much autonomy should be designed into employees’ job

Whether tasks should be done by individuals or in teams

The degree to which department managers interact with each other

Creating an Innovative Culture

· Challenge and involvement

· Freedom

· Trust and openness

· “Idea” time

· Playfulness/humour

· Conflict resolution

· Debate and Discussion

· Risk-taking: No fear of failure

Creating a Customer-Responsive Culture

· Hire conscientious, caring employees

· Few rigid rules, procedures, and regulations

· Empowerment of employees

· Encourage listening skills

· Role clarity

Motivating Managers and Employees to Think Strategically

· managers and employees can receive training that describes strategic thinking and how to do it.

· an organization can encourage and reward employees who generate new ideas

· a company can actually implement a strategic planning process that incorporates the elements of strategic thinking

Determine obstacles

to change

Manage and

Evaluate Change

Determine the

need for change