Organisation Design and Change
Design Options -Strategy
Strategy
Planning mode
A set of guidelines developed and decided in
advance and implemented subsequently
Evolutionary mode
Cannot be prefixed. It evolves over time, and may
change with time.
Goals define where organisations want to go
Strategy decides how to get there
Strategy Stretch
Strategy stretch by design is a sense that top
management has of a relatively clear view of goal line and a broad agenda of the capability building challenges that lie between today and tomorrow
KINDS OF STRATEGIES
Operational Strategy
Corporate Strategy
Business strategy
Corporate strategy
Strategy Structure
Chandler
Miles and Snow
Porter
Chandlers Theory
A new strategy required a new or at least
refashioned structure if the enlarged enterprise was to be operated efficiently. Unless structure follows strategy, inefficiency results
Porter
COMPETITIVE ADVANTAGE
Low cost COMPETITIVE SCOPE
Uniqueness
Broad
Low-cost leadership
Differentiation
Narrow Focused low cost leadership
Focused differentiation
Porter
COMPETITIVE ADVANTAGE
Low cost COMPETITIVE SCOPE
Uniqueness
Broad
Low-cost leadership
BigBazaar (Mechanistic)
Differentiation
Manish Malhotra Apple Scooty
Narrow Focused low cost leadership
ICICI Matrix SW airlines
Focused differentiation
Dell computers Rolls Royce (Organic)
Colour drives two wheeler sales There is a colour revolution brewing in the two wheeler market. Scooterettes and motorcycles have become an accessory that reflects the persona of the rider and colour is playing a key role in influencing purchase. The trend is seen more among women, who constitute 3% of the total two wheeler riding population. But this minority has led to a strong impact among manufacturers. The success of pink TVS Scooty Pep+ a couple of years ago drove in this fact to the market. Sales of Scooty soared and today , the girlie pink version alone contributes 30% to the annual sales of 22,000 units. Last year, Scooty extended their palette to 99 colours and 85% of them, particularly colours centered on reds, violets and blues are doing well.
Miles & Snow
Prospectors
Learning orientation Flexible, fluid, decentralized structure
Defenders
Efficiency orientation Centralized authority and tight cost control Close supervision, low employee empowerment
Analyzer
Balances efficiency and learning Tight cost control with flexibility and adaptability Efficient production for stable product lines Emphasis on creativity, research and innovation
Reactor
No clear organizational approach Design characteristics may shift abruptly depending on current
needs
Defenders
are characterized by the following:
work in a stable environment Deal with limited range of goods and services. Work hard to defend itself from competition by ensuring good quality high price strategy Ignore the environment. Slow to perceive threats and opportunities in the environment Believe in centralized decision making Spend a lot of time in planning Use rules, regulations and procedures as mechanisms of control.
May vertically integrate their operation to reduced dependence on resources available in the environment
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Prospectors
are characterized by the following:
Operate with in a broad product domain. Keep redefining the domain periodically. Focus more on innovation than profitability. Keep on scanning the environment for fresh opportunities. Operate in a flexible structure that is marked by decentralization. Strict adherence to rules and regulations is often missing in these structures.
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Analyzers
are characterized by the following:
Unlike defenders or prospectors, they pursue middle of the road strategy. Generally maintain a stable but limited line of product and service but are quick to adopt to new developments. Though not the first but become the second by carefully analyzing the competitors responses in the new product development. Hence they live by imitation. Since they seek stability and also flexibility, some parts of their structure are standardized while other parts are fluid.
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Reactors
are characterized by the following:
Perform better in regulated industries. They do not have a fixed strategy structure configuration Pursues prospectors strategy with defender structure.
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