Module 2
Understanding Strategy and Organization
Learning Objectives
Students are expected to:
1. State the importance of understanding (business) strategy for people manager;
2. Explain the each of the components of business strategy;
3. Describe the nature and scope of organization analysis and design
4. Describe the different types of organization charts.
Course Content
BUSINESS STRATEGY
Human resource department contributes in formulating the company’s business strategy
through facilitating the organization’s values, vision and mission. The aforementioned elements
form the core of business strategy, that are defined as follows:
● Values are fundamental and shared beliefs that will guide an organization’s behavior in
meeting its objectives and in dealing with others
● Vision refers to a commonly shared picture of what the organization wants and is
committed to become sometime in the future
● Mission is the purpose of existence of the organization, while mission statement is an
enduring statement that distinguishes itself from other organizations.
A balanced assessment from different perspectives is required in today’s organizations.
These perspectives came from owners, customers, employees, and the organization process.
ORGANIZATION ANALYSIS AND DESIGN
People management requires more than just upgrading job descriptions, salary scales,
and benefit plans. It also involves designing organizational structures.
Organizational analysis and design is done for the purpose of developing a structure:
● By which the objectives and policies of the company can best be realized and the
supporting plans are implemented;
● That is responsive to environmental conditions (competition, regulations, and
technology;
● Which clearly delineates duties, responsibilities, and working relationships of people
Factors to be considered in organizational analysis and design
● Internal company factors such as corporate objectives, philosophy, strategy, policies,
and procedures;
● Leadership style, individual goals, and objectives of top management; and
● External factors such as developments in the industry, government policies and laws
regulating company operations, foreign markets, and relationships with other entities.
What is an organization?
Organizations are social entities that are goal-directed, deliberately structured, with
coordinated activity systems, linked to the external environment. Organizations exist when
people interact with one another to perform essential functions that help them attain common
goals.
Organizational structure
Structure sets a pattern of relationships among the components or parts of the
organization. However, the structure of an organization is not at all visible in the same way as a
biological or mechanical system.
The formal structure is normally defined in terms of:
● Pattern of formal relationships and duties- organization charts plus job descriptions
● Formal rules, operating policies, work procedures, compensation arrangements, and
similar devices adopted by management to guide employee behavior
Formal structures have to satisfy certain formal specifications as follows:
● Clarity
● Efficiency
● Shared vision
● Understanding one’s own task and the common task
● Decision-making
● Stability and adaptability
● continuity
Basic principles of organization
● Objectives
● Division of work
● Functional definition
● Management levels
● Span of control
● Scalar principle
● Unity of command
● Delegation
● Parity authority and responsibility
● Balance
An organization chart’s main purpose is to group functions/tasks within the organization
and identify and show the reporting relationships between and among the units and/or positions
within the organization.
Activity
1. Choose a company or organization and present the following information:
(Please do not include Central Philippine University)
a. Vision
b. Mission
c. Shared values
d. Goals and objectives
e. Organization chart