Strategy Implementation. HCAD 5390. Organizational Structure. Organizational design Selecting the structure and control systems that are most strategically effective for pursuing sustainable competitive advantage. The role of structure and control To coordinate strategy implementation.
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Reduced information overload on upper managers.
Increased motivation and accountability throughout organization.
Fewer managers; lower bureaucratic costs.
Advantages of centralization
Easier coordination of organizational activities.
Decisions fitted to broad organizational objectives.
Exercise of strong leadership in crisis.
Faster decision making and response.Centralization (Structural) Choice?
Task grouping facilitates specialization and productivity.
Better monitoring of work processes, reduced costs.
Greater control over organizational activities.
Functional orientation creates communication problems.
Performance and profitability measurement problems.
Location versus function problems (coordination).
Strategic problems due to structural (vertical and horizontal) mismatches.Functional Structure
Enhanced corporate control by division
Enhanced strategic control of each SBU in portfolio
Growth is easier. New units don’t have to be integrated across organization
Stronger pursuit of internal efficiencies. Performance of individual units is readily measurable.
Establishing the divisional-corporate authority relationship
Distortion of information by divisions
Competition for resources by divisions
Transfer pricing problems between divisions
Short-term research and development focus
Bureaucratic costsMutlitdivisional Structure
Two-boss employeeMatrix Structure
Business Strength/Competitive Position
Dynamic Industry Expert
Cautious Profit Planner
Analytical Portfolio Manager