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Structuring the Organization

Structuring the Organization. Strategy and Structure. Cost Leadership Strategy - requires strong specialization of tasks, centralization, and often formalization to foster a low-cost culture.

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Structuring the Organization

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  1. Structuring the Organization

  2. Strategy and Structure • Cost Leadership Strategy - requires strong specialization of tasks, centralization, and often formalization to foster a low-cost culture. • Differentiation Strategy - requires a relatively flat organization with decentralized decision making and little formalization to react quickly to capitalize on emerging trends in key markets. • Focus Strategy - depends upon whether it is a low cost or differentiation focus strategy.

  3. Changing Structural Characteristics of the Modern Corporation Old Organizational Design New Organizational Design One large corporation Mini-business units & cooperative relationships Vertical communication Horizontal communication Centralized top-down decision making Decentralized participative decision making Vertical integration Outsourcing & virtual organizations Work/quality teams Autonomous work teams Functional work teams Cross-functional work teams Minimal training Extensive training Specialized job design focused on individual Value-chain team-focused job design Source: Adapted from B. Macy and H. Izumi, “Organizational Change, Design, and Work Innovation: A Meta-Analysis of 131 North American Field Studies—1961–1991,” Research in Organizational Change and Development, Vol. 7, JAI Press (1993), p. 298. Reprinted with permission.

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