Organization theory and design: Lecture 4

Lecture 4

Organizational Purpose

1


Strategic Management
• Primary responsibility of top management
is to determine an organization’s goals,
strategy, and design, therein adapting the
organization to a changing environment.
• Organization design is the administration
and execution of the strategic plan.
– External and internal environment

• This is the area where role of organization
theory comes in.
2


Strategic Management
• Internal and External Environment
• SWOT Analysis
• Capability

3


Process of Strategic Management
• Goals/objectives:

– Must be SMART
• Vision
• Mission
• External environmental assessment:
– Opportunities and Threats
– Resources availability
4


Process of Strategic Management
• Internal environmental assessment:
– Strengths and Weaknesses
– Distinctive or core competencies
– Leadership style
– Past performance

• Matching of the two assessments

5


Process of Strategic Management
• Generation of strategies
– Strength threat (ST), strength opportunity
(SO) etc.

• Selection of strategies
• Implementation
• Problems in implementation

6


Strategic Management
• Difference between goals and strategies
• e.g. 15% annual sales growth, through
– Advertising
– Motivated sales force

• Two models of formulating strategies:
• Porter’ model
• Miles and Snow model
7


Porter’s Competitive Strategies
• Differentiation
• Low-cost leadership
• Focus

8


• How companies decide the strategy
• Strategy and structure

9