6.
A strategy is a plan for interacting with the competitive environment
Managers must select specific strategy design
Models exist to aid in formulating strategy:
Porter’s Five Forces
Miles and Snow’s Strategy Typology
7
Selecting Strategy and Design
8.
9
Porter’s Competitive Strategies
Differentiation strategy – to distinguish products or
services from others in the industry
Low-Cost Leadership – increase market share by keeping
costs low compared to competitors
Organizations may choose to focus broad or narrow in
reaching multiple markets.
11.
Prospector
Learning orientation; flexible, fluid, decentralized structure
Values creativity, risk-taking, and innovation
Defender
Efficiency orientation; centralized authority and tight cost control
Emphasis on production efficiency, low overhead
Analyzer
Balances efficiency and learning; tight cost control with flexibility and adaptability
Emphasis on creativity, research, risk-taking for innovation
Reactor
No clear organizational approach; design characteristics may shift abruptly depending on
current needs
12
Miles and Snow’s Strategy Typology
Managers should seek to formulate strategy that matches the demands of the
external environment
12.
Managers must design the organization
to support the firm’s competitive strategy
13
How Strategy Affects
Organization Design
Strategy impacts internal
organization characteristics
15.
Measuring Effectiveness:
→ The Goal Approach
→ The Resource-Based Approach
→ The Internal Process Approach
→ The Strategic Constituents Approach
16
Assessing Organizational Effectiveness
Effectiveness takes into consideration a range of variables at both
the organizational and departmental levels.
Efficiency relates to the working of the organization and amount
of resources used to produce output.
16.
Profitability—the positive gain from business operations or investments after
expenses are subtracted
Market share—the proportion of the market the firm is able to capture relative to
competitors
Growth—the ability of the organization to increase its sales, profits, or client base
over time
Social responsibility—how well the organization serves the interests of society as
well as itself
Product quality—the ability of the organization to achieve high quality in its
products or services
The Goal Approach
17.
The resource-based approach looks at the input side of the transformation
process .
It assumes organizations must be successful in obtaining and managing valued
resources in order to be effective.
From a resource-based perspective, organizational effectiveness is defined as
the ability of the organization, in either absolute or relative terms, to obtain
scarce and valued resources and successfully integrate and manage them.
The resource-based approach is valuable when other indicators of performance
are difficult to obtain.
(Non profit and Social Sector)
The Resource-Based Approach
18.
Bargaining position—the ability of the organization to obtain from its
environment scarce and valued resources, including financial resources, raw
materials, human resources, knowledge, and technology
The abilities of the organization’s decision makers to perceive and correctly
interpret the real properties of the external environment
The abilities of managers to use tangible (e.g., supplies, people) and intangible
(e.g., knowledge, corporate culture) resources in day-to-day organizational
activities to achieve superior performance
The ability of the organization to respond to changes in the environment
The Resource-Based Approach
19.
In the internal process approach (HRM), effectiveness is measured as
internal organizational health and efficiency.
An effective organization has a smooth, well-oiled internal process.
Employees are happy and satisfied. Department activities mesh with
one another to ensure high productivity.
This approach does not consider the external environment.
The important element in effectiveness is what the organization does
with the resources it has, as reflected in internal health and efficiency.
The Internal Process Approach
20.
Internal process indicators include:
A strong, adaptive corporate culture and positive work climate
Operational efficiency, such as using minimal resources to
achieve outcomes
Undistorted horizontal and vertical communication
Growth and development of employees
The Internal Process Approach
21.
Combines several indicators of effectiveness into a single
framework, balancing traditional financial measures with
operational measures relating to a company’s critical success
factors.
The Strategic Constituents Approach
24.
Competing values model tries to balance concern
with various parts of the organization
The human relations emphasis incorporates the
values of an internal focus and flexible structure
25
An Integrated Effectiveness Model
27.
Organization exist for a purpose
Strategic intent includes competitive advantage and core
competence
Strategies may include many techniques
There are models to aid in the development of strategy
Organizational effectiveness must be assessed
No approach is suitable for every organization
28
Design Essentials
Notes de l'éditeur
Competitive advantage refers to what sets the organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the marketplace.
Core competence is something the organization does especially well in comparison to its competitors.
Goal Approach: Profitability ,Market share, Growth ,Social responsibility, Product quality
The Resource-Based Approach: Bargaining position, The abilities of the organization’s decision makers to interpret environment, The abilities of managers to use tangible and intangible resources, The ability to respond to changes in the environment.
The Internal Process Approach: strong, adaptive corporate culture and positive work climate, Operational efficiency, Undistorted horizontal and vertical communication, Growth and development of employees
