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Chapter Two

Chapter Two. Strategy, Organization Design, and Effectiveness. ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e. 2-. Top Management Role in Organization Direction, Design, and Effectiveness. External Environment. Organization Design.

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Chapter Two

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  1. Chapter Two Strategy, Organization Design, and Effectiveness ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e 2-

  2. Top Management Role in Organization Direction, Design, and Effectiveness External Environment Organization Design Opportunities Threats Uncertainty Resource Availability Structural Form – learning vs. efficiency Information and control systems Production technology Human resource policies, incentives Organizational culture Interorganizational linkages Effectiveness Outcomes Strategic Management Resources Efficiency Goal attainment Stakeholders Competing values Define mission, official goals Select operational goals, collaborative strategies CEO, Top Management Team Internal Environment Strengths Weaknesses Distinctive competence Leadership Style Past Performance ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e Source: Adapted from Arie Y. Lewin and Carroll U. Stephens, “Individual Properties of the CEO as Determinants of Organization Design,” unpublished manuscript, Duke University, 1990; and Arie Y. Lewin and Carroll U. Stephens, “CEO Attributes as Determinants of Organization Design: An integrated Model,” Organization Studies 15, no. 2 (1994): 183-212

  3. Goal Type and Purpose Type of Goals Purpose of Goals Official Goals, mission: Legitimacy Operative goals: Employee direction and motivation Decision guidelines Standard of performance ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e

  4. Porter’s Competitive Strategies ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e

  5. Miles and Snow’sStrategy Typology • Prospector • Learning orientation; flexible, fluid, decentralized structure • Strong capability in research • Values creativity, risk-taking, and innovation • Defender • Efficiency orientation; centralized authority and tight cost control • Emphasis on production efficiency, low overhead • Close supervision; little employee empowerment Source: Based on Michael Treacy and Fred Wiersema, “How Market Leaders Keep Their Edge,” Fortune February 6, 1995, 88-98; Michael Hitt, R. Duane Ireland, and Robert E. Hoskisson, Strategic Management (St. Paul, Minn.: West, 1995), 100-113; and Raymond E. Miles, Charles c. Snow, Alan D. Meyer, and Henry L. Coleman, Jr., “Organizational Strategy, Structure, and Process,” Academy of Management Review 3 (1978), 546-562 ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e

  6. Miles and Snow’sStrategy Typology (cont’d) • Analyzer • Balances efficiency and learning; tight cost control with flexibility and adaptability • Efficient production for stable product lines; emphasis on creativity, research, risk-taking for innovation • Reactor • No clear organizational approach; design characteristics may shift abruptly depending on current needs Source: Based on Michael Treacy and Fred Wiersema, “How Market Leaders Keep Their Edge,” Fortune February 6, 1995, 88-98; Michael Hitt, R. Duane Ireland, and Robert E. Hoskisson, Strategic Management (St. Paul, Minn.: West, 1995), 100-113; and Raymond E. Miles, Charles c. Snow, Alan D. Meyer, and Henry L. Coleman, Jr., “Organizational Strategy, Structure, and Process,” Academy of Management Review 3 (1978), 546-562 ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e

  7. Strategy Culture Size/ Life Cycle Environment Contingency FactorsAffecting Organization Design Technology Organizational Structure and Design The right mix of design characteristics fit the contingency factors ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e

  8. Contingency Approaches to the Measurement of Organizational Effectiveness External Environment Organization Internal activities and processes Resource Inputs Product and Service Outputs System resource approach Internal process approach Goal approach ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e

  9. Reported Goalsof U.S. Corporations Goal% Corporations Profitability 89 Growth 82 Market Share 66 Social Responsibility 65 Employee welfare 62 Product quality and service 60 Research and development 54 Diversification 51 Efficiency 50 Financial stability 49 Resource conservation 39 Management development 35 ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e Source: Adapted from Y. K. Shetty, “New Look at Corporate Goals,” California Management Review 22, no. 2 (1979), pp. 71-19.

  10. Four Models ofEffectiveness Values STRUCTURE Flexibility Human Relations Model Goal values: human resource development Subgoals: cohesion, morale, training Open Systems Model Goal values: growth, resource acquisition Subgoals: flexibility, readiness, external evaluation F O C U S External Internal Internal Process Model Goal values: stability, equilibrium Subgoals: information management, communication Rational Goal Model Goal values: productivity, efficiency, profit Subgoals: planning, goal setting Control Adapted from Robert E. Quinn and John Rohrbaugh, “A Spatial Model of Effectiveness Criteria: Toward a Competing Values Approach to Organizational Analysis,” Management Science 29 (1983): 363-377; and Robert E. Quinn and Kim Cameron, “Organizational Life Cycles and Shifting Criteria of Effectiveness: Some Preliminary Evidence,” Management Science 29 (1983): 33-51. ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e

  11. ORGANIZATION A ORGANIZATION B Effectiveness Valuesfor Two Organizations STRUCTURE FLEXIBILITY Human Relations Model Open Systems Model F O C U S INTERNAL EXTERNAL Internal Process Model Rational Goal Model CONTROL ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e

  12. Workbook Activity Identifying CompanyGoals and Strategies ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e

  13. Workshop Activity Competing Values andOrganizational Effectiveness ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e

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