Expert answer:Strategy Planning 10
Solved by verified expert:For this Critical Thinking Assignment, you have been asked by IKEA to make a suggestion for an organizational chart that IKEA can consider to better support its international strategy. Let’s assume that some top IKEA executives like and want to keep the current structure. (See: http://www.ikea.com/ms/en_US/this-is-ikea/company-information/index.html#organization for this structure.) However, recently there has been pressure from a few IKEA leaders to consider that the company must become more innovative in its approach to global expansion. To complete the new proposed organization structure, review the IKEA case study from Chapter 8 of your textbook. Then review some additional information about IKEA on the internet. Also, review the organizational design elements in this week’s module lecture. Make sure you fully understand the concepts presented in Chapter 9 of the textbook. Decide what you think would be the best organizational structure for IKEA at this point in time, based on the strategy implementation concepts presented in this course. Be aware that you will need to substantiate your recommended organizational structure changes, or justify your recommendation to keep the current structure. Then use the internet to find a free software program that can be used to develop an organizational chart (or you may choose to develop the organizational chart in Word). https://www.smartdraw.com/downloads/ Include the following elements in a well-written paper: Introduce the thesis of your paper (what you will be presenting). Introduce your organizational chart(s). Discuss and explain how you determined that this structure should be implemented by IKEA. End with a summary statement of the highlights of your paper. Your well-written paper should meet the following requirements: Be 3-4 pages in length, which does not include the required title page or reference page, which are never a part of the content minimum requirements. Use APA style guidelines. Support your submission with course material concepts, principles, and theories from the textbook and at least two scholarly, peer-reviewed journal articles unless the assignment calls for more.
mgt510_ppt_ch09___live_session_05.pptx
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Realizing Strategy
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
1
Learning Objectives
By the time you have completed this topic you will be able to:
• understand how strategic planning links to operational planning,
performance management and resource allocation in implementing
strategy
• appreciate the basic principles that determine the structural
characteristics of complex human organizations
• select the organizational structure best suited to a particular business
context
• recognise how companies have been changing their organizational
structures in recent years and the forces that have been driving these
changes
• understand the role of organizational culture in realizing strategy
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
2
From Strategy to Execution
The Generic Annual Strategic Planning Cycle
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
3
The Organizational Challenge: Reconciling
Specialisation with Coordination and
Cooperation
High productivity requires SPECIALISATION
The efforts of specialised individuals need to be integrated
The need for COOPERATION
The Agency Problem:
Employees’ goals ≠ Owners’ goals
The need for COORDINATION
Managing interdependency
THE ORGANIZATIONAL CHALLENGE
To design structure and systems that:
• Permit specialization
• Create incentives to align individual and firm goals
• Facilitate coordination by grouping individuals and link groups
with systems of communication, decision making and control
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
4
Overcoming the Organizational
Challenges of Managing Cooperation and
Coordination
Mechanisms for aligning goals
• Bureaucratic controls: rules and hierarchies of
authority
• Performance incentives: paying for productivity
• Shared values: commonality of principles and values
among organizational members
Mechanisms for cooperation
• Rules and instructions
• Routines
• Mutual adjustment
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
5
How Hierarchy Economizes on
Coordination
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
6
Defining Organizational Units
Tasks
Organizational
units can be
created around
common tasks—
i.e. grouping
together
employees who
do the same job
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
Products
Geography
Process
Organizational
units can be
based on groups
of products which
form business
units
Where a company
serves a number
of local markets,
organizational
units can be
defined around
these localities
A process is a
sequence of
interlinked activities.
An organization.
The individuals who
undertake a process
need to be within
the same
organizational unit.
Functional
organizations tend
to combine taskbased and processbased grouping
7
A Functionally Structured
Organizations
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
8
A Multi-Divisional Structure:
General Electric in 2009
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
9
A Matrix Organization: The Royal
Dutch Shell Group Before 1996
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
10
Beyond Hierarchy:
Alternative Organizational Forms
• Adhocracies: Flexible, informal organizations with
little formal structure where coordination is through
presence of shared values, shared commitment,
mutual respect and ease of communication
• Team-based and project-based organizations:
Organizations made up on multiple collaborative
teams, often organized around specific projects—
separate work assignments of limited duration
• Networks: Groups of independent but closelyinterdependent specialist firms typically located in
close proximity to one another
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
11
Beyond Hierarchy:
Alternative Organizational Forms
Common characteristics
1. Focus on coordination rather than control
2. Reliance on coordination by mutual
adjustment
3. Individuals occupy multiple organizational
roles
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
12
Corporate vs Organizational Culture
Corporate Culture
The values and ways of thinking and acting
that senior managers encourage within their
organizations
Organizational Culture
The values, ways of thinking and acting that
exist informally within work organizations
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
13
Some Key Questions
Can organizational cultures be managed?
• People are not easily manipulated
• Attempts to change attitudes may be met with
cynicism or resistance
How does culture affect performance?
• It is difficult to measure broad concepts like
culture and performance
• Limited empirical evidence
©2015 Robert M. Grant & Judith Jordan
www.foundationsofstrategy.com
14
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