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Organizational Design, Diagnosis, and Development

Organizational Design, Diagnosis, and Development. Session 7 Departmentation, II. Objectives. To examine mixed and multinational structures To consider design from an enterprise perspective To consider design from an operational perspective. Mixed Structure. Hybrid of functional & product.

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Organizational Design, Diagnosis, and Development

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  1. Organizational Design, Diagnosis, and Development Session 7 Departmentation, II

  2. Objectives • To examine mixed and multinational structures • To consider design from an enterprise perspective • To consider design from an operational perspective

  3. Mixed Structure Hybrid of functional & product

  4. Value of Mixed Design • Advantage • Uses divisional to be responsive to core enterprises and functional for staff areas which need to allow expertise to develop • Disadvantage • Conflicts can erupt between divisional units and centralized ones due to different perspectives and needs.

  5. International Structure A hybrid between functional & product

  6. Emerging Enterprise Designs Independent Business Units Integrated Business units Interdependent Business Units Leveraged Business Groups Organizational Networks Functional Groupings

  7. Michael Porter’s “Value Chain” Front: (Customer) Back: (Core Technologies) Conceive Support Distribute Design Market Develop Produce Sales

  8. Focus & Leverage • Focus: • “zoomed” : a close-up perspective on a segment of the process (traditional) • “telephotoed” or long range perspective on the entire process (emerging) • Leverage: the ability of the company to take advantage of economies of scale by using common resources

  9. Leveraged Front Design Leveraged Front Focused Back Product A Common Sales Force Product B Product C

  10. Leveraged Back Design Focused Front Leveraged Back Customer Business unit A Common Development & Production Customer Business unit B Customer Business unit C

  11. Leveraged Middle Design Leveraged Middle Services Common Information Services Common Distribution Focused Front Focused Back Product A Manufacturing Product A Sales Product B Sales Product B Manufacturing

  12. Strategic Alliance • Two independent companies come together to plan the product and its delivery. • MSNBC is the joint venture of Microsoft & GE. • Requirements: • clear objectives • compatible cultures • commitment

  13. Socio-Technical Systems • Organization’s social system should match the technical systems • Design roles and tasks to complement social and technical needs • Build ability redundancy into the system • Utilize autonomous work groups with members who are cross-trained.

  14. Design the process starting with customer Design work around autonomous work groups Provide clear goals and performance standards Provide quality control at the source Align all systems Provide information freely Provide enriched jobs HR practices which are aligned with HPWS Management & culture must support HPWS There needs to be flexibility built in High Performance Work Systems

  15. Backwards & Forwards • Summing up: Today we reviewed mixed and multinational structures. Then we explored some strategic issues for designs using Nadler and Tushman’s concepts of focus and leverage. This gave the opportunity to explore designs with areas of focus and leverage. Finally we looked at redesign at the operational level using notions of socio-technical systems and high performance work systems. • Looking ahead: Next time we conclude our module on design by looking at team organizations and virtual organizations.

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