Org. Theory and Design: Chapter 8 (Matching)

Coordination ability = Organization's ability to coordinate functional and organizational resources to create value Global expansion = Allows an organization to create value by transferring core competences abroad and gaining access to global skills and resources Four levels of strategy = Formulated at functional, business, corporate, and global levels to match the organization's strategy and structure Functional-level strategy = The strategic goal of each function to create a core competence for competitive advantage

Business-level strategy = Focuses on selecting the domain an organization will compete in and positioning the organization to manage its environments Strategies to lower costs or differentiate products = Focuses on low-cost or differentiation business-level strategies to compete with rivals Focus strategy = Specializing in one segment of a market and focusing all resources on that segment Functional-level strategy and structure = Dependent on the organization's structure and culture for development of functional abilities and core competences

Organic structure = Associated with differentiation strategy, permits decentralized, cross-functional team approach to decision-making Mechanistic structure = Associated with low-cost strategy, requires centralized decision-making for close control of functional activities Business-level strategy and structure = Dependent on the type of organizational structure needed for successful implementation of differentiation or low-cost strategies Functional-level strategy and culture = Result of culture that emerges in a function or department, difficult to imitate by competitors

An organization's coordination abilities = A product of its structure and important for effective coordination of functions and departments Development of functional abilities = Dependent not only on skills and resources, but also on the culture that emerges in a function or department Four ways of global expansion = Includes transferring core competences abroad, establishment of a global network, gaining access to global skills and resources, and using global learning to enhance core competences Responsibility of top-management team = Includes formulating business-level strategy and deciding how to position the organization to compete for resources in its environment

Wider range of products = Needs greater control over development, marketing, and production Seeking new customer groups = Needs a structure to serve the needs of customers Pace of new product development increases = Needs a structure that increases coordination among functions Handling different groups of customers = Market structure or geographical structure will best fit the needs

Low-cost strategy = Functional structure Differentiation strategy = Product team structure or matrix structure Culture values of innovation, quality, excellence = Strength for differentiator Developing values of economy and frugality = Values within a low-cost organization

Vertical integration = Strategy where organization takes over and owns its suppliers or distributors Related diversification = Entry into a new domain related to the organization's domain Unrelated diversification = Entry into a new domain not related to the organization's core domain Value creation from top-management team's ability to operate organizations in concert effectively = Related diversification value creation

Multi-domestic strategy = Oriented towards local responsiveness with divisions in each country International strategy = Based on centralized R&D and marketing with decentralized value-creation functions Global strategy = Oriented towards cost reduction with centralized value-creation functions at lowest cost global location Transnational strategy = Focused on achieving local responsiveness and cost reduction

Distributing responsibility and authority between home and abroad managers = Effective control over company's global operations Selecting organizational structure for grouping divisions at home and abroad = Best use of resources and serving needs of foreign customers effectively Selecting integration and control mechanisms and organizational culture = Making overall global structure function effectively Implementing a multi-domestic strategy = Generally operates with a global geographic structure

Strategy = Specific pattern of decisions and actions that managers take to use core competences to achieve a competitive advantage and outperform competitors Core competences = Skills and abilities in value-creation activities such as manufacturing, marketing, or R&D that allow a company to achieve superior efficiency, quality, innovation, or customer responsiveness Functional resources = The skills possessed by an organization’s functional personnel; must be unique and difficult to imitate Organizational resources = Company-specific skills and competences that give an organization a competitive advantage, including the skills of top management team and valuable, scarce resources

Specialized resources = Product of specialized resources and coordination abilities possessed by the organization Functional resources = Skills possessed by an organization’s functional personnel; must be unique and difficult to imitate Organizational resources = Company-specific skills and competences that give an organization a competitive advantage Core competences = Skills and abilities in value-creation activities such as manufacturing, marketing, or R&D

Functional resources = Skills possessed by an organization’s functional personnel Organizational resources = Skills of a company’s top management team, vision of its founder/CEO, possession of valuable and scarce resources Specialized resources = Specialized resources and coordination abilities possessed by the organization Core competences = Skills and abilities in value-creation activities such as manufacturing, marketing, or R&D

Strategy = Specific pattern of decisions and actions that managers take to achieve a competitive advantage and outperform competitors Core competences = Skills and abilities in value-creation activities that allow a company to achieve superior efficiency, quality, innovation, or customer responsiveness Functional resources = Skills possessed by an organization’s functional personnel; must be unique and difficult to imitate Organizational resources = Company-specific skills and competences that give an organization a competitive advantage

Strategy = Specific pattern of decisions and actions used to use core competences to achieve a competitive advantage and outperform competitors Core competences = Skills and abilities in value-creation activities such as manufacturing, marketing, or R&D that allow a company to achieve superior efficiency, quality, innovation, or customer responsiveness Specialized resources = Product of specialized resources and coordination abilities possessed by the organization Organizational resources = Company-specific skills and competences that give an organization a competitive advantage

Core competences = Skills and abilities in value-creation activities such as manufacturing, marketing, or R&D that allow a company to achieve superior efficiency, quality, innovation, or customer responsiveness Functional resources = Skills possessed by an organization’s functional personnel; must be unique and difficult to imitate Organizational resources = Company-specific skills and competences that give an organization a competitive advantage Strategy = Specific pattern of decisions and actions used to use core competences to achieve a competitive advantage and outperform competitors

International strategy = Utilizes a global product group structure Global strategy = Locates manufacturing and value chain activities at global locations Transnational strategy = Employs a global matrix structure Product group structure = Reduces transaction costs involved in managing handoffs across countries

International strategy = Coordination of activities between home and international divisions Global strategy = Increasing efficiency and quality through global locations Transnational strategy = Decentralizing control to overseas managers Product group structure = Organizing all aspects of value creation on a global level

International strategy = Loses benefits of operating globally Global strategy = Weak responsiveness to customers due to centralized control Transnational strategy = Suffers from considerable flexibility for managing local issues Product group structure = Weak in responsiveness to customers due to focus on centralized control

Global product group structure = Reduces transaction costs in managing handoffs across countries and world regions Product group structure = Allows managers to decide how best to pursue global strategy and increase efficiency Global matrix structure = Simultaneously lowers global cost structures and differentiates activities through innovation and responsiveness to customers globally Matrix structure = Decentralizes control to overseas managers and provides flexibility for managing local issues