MGT 4153
Dr. Jimmy Richardson
Tid-bits from Chapter 2
 What do you wish to do?
 Why?
 Write a “future” mission statement.
 Write a vision.
 Develop a strategy.
 Develop goals to actionize strategy. (strategic direction)
 Strategic direction: (opportunities, threats, uncertainty,
resource availability, strengths, distinctive competence,
leader style, past performance)
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 Do you have a competitive advantage?
 Core competencies?
 Formulating strategies: Porter model and Miles and Snow
strategy typology
 Porter: Differentiation vs low-cost leadership
 Miles and Snow: Prospector, Defender, Analyzer, Reactor
 Four Effectiveness Approaches: Goal approach, Resourcebased approach, Internal process approach, Strategic
constituents approach
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MGT 4153
Dr. Jimmy Richardson
What is Structure?
 Designates formal reporting relationships
 Identifies grouping of individuals into units and units
into the organization
 Includes design of systems to ensure communication,
coordination and integration of effort
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Designed for efficiency: Centralized
Designed for learning: Decentralized
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Information-sharing Perspective on
Structure
Design: Provide both vertical and horizontal information flow
to accomplish organizational goals. If structure doesn’t fit,
people will have either too little information or spend time
processing information not vital to their tasks.
Vertical linkages are designed primarily for control. Horizontal
linkages are designed for coordination and collaboration, which
usually means reducing control.
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Design Options for Grouping Employees
into Departments
Functional
Grouping
CEO
Engineering
Marketing
Divisional
Grouping
CEO
Division A
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Manufacturing
Division B
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Division C
Defined as all elements that exist outside the boundary of the organization and have the potential to
affect all or part of the organization.
Domain – Chosen environmental field of action.
Eleven Sectors can be identified for most organizations.
Sectors are usually divided into two subdivisions: Task and General
Task – the industry, raw materials, market sectors, and perhaps HR and international sectors.
General – Financial, Technology, Economic conditions, Government, Sociocultural
An Organization’s Environment
(Task & General)
(a) Competitors, industry size and
competitiveness, related issues
(b) Suppliers,
manufacturers, real
estate, services
(i)
(c) Labor market,
Sociocultural
Sector
employment agencies,
universities, training
schools, employees
(h)
in other companies,
Government
unionization
Sector
(d) Customers, clients,
potential users of products
(g)
and services
Economic
Conditions
(e) Stock markets, banks,
Sector
S&L, private investors
(f) Techniques of production, science,
computers, information technology
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(g) Recession, unemployment rate,
inflation rate, rate of investment,
(j)
(a)
economics, growth
International
Industry
(h) City, state, federal laws
Sector
Sector
and regulations, taxes,
(b)
services, court system,
DOMAIN
Raw Materials
political processes
Sector
(i) Age, values, beliefs,
education, religion,
(c)
work ethic, consumer
Human
Resources
and green
ORGANIZATION
Sector
movements
(j) Competition from
(d)
and acquisition by
Market
foreign firms,
Sector
entry into overseas
(e)
(f)
Financial
markets, foreign
Technology
Sector
Sector
customs, regulations,
exchange rates
The Changing Environment (pg 147)
Complexity: heterogeneity (# and dissimilarity of external
elements.)
Dynamism: Is the environment in which the organization
operates stable or unstable?
Financial Resources (Abundance to Scarcity)
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Simple-complex and stable-unstable dimensions, pg. 151
Low Uncertainty
STABLE
ENVIRONMENTAL
CHANGE
1. Small number of elements, and
elements are similar
2. Elements remain the same or change
slowly
1. Large number of elements, and elements
are dissimilar
2. Elements remain the same or change
slowly
Examples: Bottlers, distributors, container
mfrs, food processors
Examples: Universities, appliance mfrs,
chemicals, insurance
High-Moderate Uncertainty
UNSTABLE
Low-Moderate Uncertainty
1. Small number of elements, and
elements are similar
2. Elements change frequently and
unpredictably
Examples: E-commerce, fashion, music,
toys
High Uncertainty
1. Large number of elements, and
elements are dissimilar
2. Elements change frequently and
unpredictably
Examples: Computer firms, aerospace,
telecomms, airlines
COMPLEX
SIMPLE
ENVIRONMENTAL COMPLEXITY
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Adapting to Uncertainty
Positions and Departments
Buffering and Boundary Spanning
Differentiation and Integration
Organic versus Mechanistic
Planning and Forecasting
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Adding to Complexity and Dynamism
Adding positions and departments
Building relationships
Buffering roles – Purpose is to absorb uncertainty from the environment.
Boundary spanning roles – Link and coordinate an organization with key
elements in the external environment. (Computer chip mfg. must know the
newest technology )
Differentiation and integration (quality of collaboration among departments)
Organic vs mechanistic management processes
Planning, forecasting and responsiveness
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Organic vs mechanistic management processes. (p 159)
Low Uncertainty
1. Mechanistic structure; formal,
centralized
2. Few departments
1. Mechanistic structure; formal,
centralized
2. Many departments, some boundary
spanning
3. Few integrating roles
4. Some planning; moderate speed
response
STABLE
3. No integrating roles
ENVIRONMENTAL
CHANGE
UNSTABLE
Low-Moderate Uncertainty
4. Current operations orientation;
low speed response
High-Moderate Uncertainty
1. Organic structure, teamwork;
participative, decentralized
2. Few departments, much boundary
spanning
3. Few integrating roles
4. Planning orientation; fast
response
High Uncertainty
1. Organic structure, teamwork;
participative, decentralized
2. Many departments differentiated,
extensive boundary spanning
3. Many integrating roles
4. Extensive planning, forecasting;
high speed response
COMPLEX
SIMPLE
ENVIRONMENTAL COMPLEXITY
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Controlling Environmental Resources
(financial)
 Establishing Inter-
organizational
Linkages:
Environmental Domain:
 Ownership
 Political activity, regulation
 Contracts, joint ventures
 Trade associations
 Cooptation, interlocking
 Illegitimate activities
directorates
 Executive recruitment
 Advertising, public relations
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 Controlling the
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 Change of domain
Cooptation (p 162)
Interlocking directorate (p 163)
See Exhibit 4.9, p 167)
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