Organizational Theory and Strategic Design

Organizational Theory

• Organizational types include government, business/corporations, not-for-profits, creative/sharing industries, worker co-ops, charities, unions, NGOs, UN, grassroots orgs, social platforms, and MNCs.

Strategic Design

• Organizations are designed to achieve a specific purpose, such as a product or service.
• The purpose guides the organizational design and management.
• Managers set goals, like the mission and competitive strategy, to shape the design and outcome delivery.
• Environmental factors (internal and external) influence strategic design.
• Examples of strategic methods include SWOT and PEST analysis, examining past performance and resource availability.

Strategic Direction

• Strategic direction considers factors like the external environment (opportunities, threats, uncertainty, resource availability).
• CEO / Top Management Team considerations include aligning official goals, operational goals, competitive strategies , production technology, human resource policies, incentives, and organizational culture.
• Interorganizational linkages are important as well.
• Effectiveness outcomes include resource efficiency, mission alignment, and goal attainment.

Organizational Purpose

• Mission statements define shared vision, values, and beliefs – what the organization stands for.
• Organizational culture and codes of conduct reflect the organization's shared values and practices.
• Operative goals are day-to-day objectives related to performance, resources, market position, employee development, and innovation & adaptability.

Organizational Operative Goals

• Goals are categorized as overall Performance, Resource, Market, Innovation & Change, and Employee Development.
• These areas are interconnected and relevant for operational objectives.

Framework for Selecting Strategy and Design

• A plan for interacting with the competitive environment to achieve organizational goals.
• Lawrence and Lorsch strategy considers stable vs. volatile environments to best match structure for the needs of employees and environment.
• Porter's Competitive Strategy focuses on specific markets (broad or narrow) based on low-cost leadership or differentiation.
• Miles and Snow typology classifies different organizational strategies (defender, prospector, analyzer, reactor) that relate to the external environment, and organizational design structure.
• Blue Ocean strategy involves creating entirely new markets for products and services.
• Contingency factors (strategy, environment, technology, size/life cycle, culture) influence organizational design choices.

Porter's Competitive Strategies

• Porter's competitive strategies are a framework for selecting competitive advantages.
• The framework includes low-cost leadership (broad costs vs. narrow) and differentiation (broad vs. narrow) to illustrate how specific strategies relate to competitive scope.

Miles and Snow Typology

• This typology describes different organizational strategies (defender, prospector, analyzer, reactor), aligning organization structure to a stable vs a dynamic environment.

Framework for Selecting Strategy and Design: Other Factors

• Other important factors affecting organizational design include strategy, environment, technology, size/life cycle, and culture.
• These factors collectively impact the organizational structure, which in turn affects overall goal accomplishment.

Organizational Effectiveness

• Effectiveness is about achieving organizational goals, in terms of overall resources, internal business processes, and setting and achieving goals.
• Different approaches exist—resource-based, internal-process, goals.
• The organization needs to balance the interests of shareholders, employees, customers and other stakeholders, which can sometimes lead to conflicts.

Contingency Effectiveness Approaches: Competing Values

• A framework encompassing different perspectives on organizational effectiveness (e.g., flexible structures, growth & development, profit/efficiency, consistency).
• Four competing values relate to different operational strategies (internal-process, rational-goal, open-systems, & human relations)

The Balanced Scorecard

• A strategic management system that translates an organization's mission and strategy into a set of performance measures.
• It monitors performances, linking short-term activities to long-term goals.
• The balanced scorecard aims at comprehensive goal management through different, interconnected perspectives, such as financial performance, and customer viewpoint.