Lecture 3-Strategic DesignPPT

8/12/2019 Lecture 3-Strategic DesignPPT

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Module 2

Three Lenses on OrganizationalAnalysis and Action

Instructor :Amna Yameen


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Managers can make their

organization successful

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Strategic Grouping (differentiation)

Drawing boundaries around clusters of tasks or activities to define

job, departments or processes

Strategic Linking (integration)

Creating links across boundaries

Alignment

Aligning other elements of the organization (e.g.

incentives/rewards) to provide access to the resources and the

incentives to do the tasks assigned

Relevant at every level of the organization

from design of teams or departments to design of

organization 5


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1. Complexity

Extent to which activity can bespecified or programmed

Simple tasks are routine but

complex task can also be

routinized

Task2. Routinization

The smallest unit of act iv i ty that

needs to be perform ed

Tasks vary in:

Degree to which extent tasks are

independent of other tasks

Most tasks in an organization

involve some level of

3.Interdependence

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Types of Interdependence

O Sequential Interdependence

O When one task is completed and handed off for

next stage

O Pooled Interdependence

O When interdependent tasks are taken at the

same time, and the final results are put together

or pooled

O Reciprocal Interdependence

O When tasks are completed with repeated

interaction with each other

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Pooled

Sequential

Reciprocal

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1. Strategic Grouping

Grouping gathers together some tasks, functions, or

disciplines, and separates them from others

Fundamental assumption

Coordination and communication are easier and denser within aunit than across units

Sharing information and building and adding to a common

knowledge base are easier within than across units

Most important areas of interdependence should be under a

unified reporting structure

Focuses on how to cluster tasks and activities?

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Basic Structures

Grouping by Expertise/ Function

Functional Grouping Structure

Brings together individuals who share similarfunctions, disciplines, skills and work

processes

Grouping by Product

Business/Product Division Structure

People within a group perform variety ofdifferent tasks/activities but they are all

contributors to same final output

Grouping by Market (Geography or

Customer)

Gathers together people who perform different

activities and tasks and produce different

outputs but who serve the same customers or

market segments

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2. Strategic Linking

involves designing formal and informal structures and processes toconnect and coordinate organizational units and subunits whose tasks

are interdependent but have been separated by strategic grouping

The level of interdependence across groups depends in part on the

tasks they perform

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Linking MechanismsHierarchy

Organization chart not only shows map of strategic grouping but

also explains who must keep whom informed and who has

responsibility for linking which activities

Dotted Line Hierarchical Relationship

lower ranking person is formally responsible for supplying all

relevant information to the higher ranked person

the higher ranked person has no formal authority over the lowerranked person beyond the information flow

Liaison Roles

Individuals who have the responsibility for coordinating across

groupsRole is information focused, dont have authority to impose

decisions on others

Integrator Roles

Coordinates activities and decision processes

Has some carrots and sticks to reinforce the rule14


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Permanent Cross Unit Groups

Brings together representatives of different

workgroups. Membership on these groups is often

combined with other activities and is often not a

full time assignment Temporary Cross Unit Groups

Represent permanent cross unit groups in their

composition. Problem focused. Exist only until

particular problem is solved or assigned task is

accomplished. More often a full time assignment

Information Technology Systems

Allow to push back time and distance constraints,

disseminate information more broadly &quickly

and facilitate collaboration and teamwork e.g.

networks, email, digital scanning/printing, videoconferencing etc.

Planning Processes

Brings people together from different groups to

identify major challenges and develop jointly a set

of goals for a certain time horizon 15


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design appropriate pattern of linkages that willcreate the clearest channels of information with

minimum commitment of people, time, money,

and other organizational resources

Challenge

construct linking

mechanisms that are both

effective and efficient

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Alignment

Ensuring that units and individuals

assigned certain tasks and activities bythe grouping and linking patterns have the

resources and motivation to carry them

Failure of redesign efforts lack of

organizational congruence

Includes: Organizational performance

measurement systems

Individual rewards and incentives

Resource allocation

Human resource development

Informal systems and processes

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Alignment

Organizational Performance Measurement Systems Align the performance measurement systems with the strategic

intent

Helps the leaders to understand that the strategic intent

underlying the grouping and linking patterns is being realized

Also align measurement systems for different strategic grouping

Individual rewards and incentives

align rewards with strategic grouping and linking patterns

Traditional org: bonuses, raises, promotions

Flatter org: project assignment, training opp., choice in

assignments

Resources

Include: people, money, things, information expertise etc

Ensure units created by strategic grouping process have the

resources to achieve their goals Ensure linking mechanisms accompanied by adequate allocation19


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Alignment(continued..)

Human Resource Development Change in design often needs a change in the way careers are

designed

Align human resources, skills and expertise with the new design

Training, personnel transfers and career planning are among the

key alignment mechanisms

Informal Systems and Processes

The most elusive and challenging element of alignment

These systems emerge over time as people adapt to the

organization and to the demand of their jobs and environment

Structured through various alignment mechanisms arenas which facilitate formation of new networks, discusiion

of problems, formation of new patterns

can be designed into training programs

incorporating into linking mechanisms

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Strategic Organizational Design Process

Process of design involves costs:

Disruption of normal flow of business

Risk to long-term relationships with key customers and

suppliersStress and anxiety

Reasons for organization redesign:

Response to growth of organization

Management succession stimulates change

Required as a result of internal problems

Current design no longer fits external environment

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o be continued

Lecture 3-Strategic DesignPPT

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