Galbraiths Star Model

Presented by GROUP 4:
Kathleen Capagcuan
Jewel Capones
Nikko Dizer
Jinny Kim
Jun Llanza
Chinky Manalansan
December 19, 2009
HUMRES G14

Jay Galbraith
Dr. Jay Galbraith has specialized in organization
design, change, and development with particular
emphasis
on
international
partnering
arrangements including joint ventures and
network organizations
Dr. Galbraith directed his own management
consulting firm prior to joining the faculty of the
University of Southern California. He has also
been a faculty member of the Sloan School of
Management at MIT and the Wharton School at
Pennsylvania University.
He has been consultant to numerous
companies and entities in the United States,
Europe Asia, and South America.

The Star Model

developed as an
organizational design
framework
used design policies
that guide
organizational decision
making and behavior.

Five Categories
1. Strategy = DIRECTION
Determines direction through goals, objectives, values,
and/or missions
Defines the criteria for selecting an organizational structure
The strategy defines the ways of making the best trade-off
between alternatives; drives resource allocation
The first part of the model to be addressed

Five Categories
2. Structure = POWER
Determines the location of decision-making power
Structure policies can be subdivided into:
- Specialization: type and number of job specialities
- Shape: the span of control at each level in the hierarchy

Five Categories
- Distribution of power: the level of centralization versus
decentralization
- Departmentalization: the basis to form departments
a. Functional undifferentiated market
b. Product multiple products for different markets
c. Process new processes
d. Market with significant market segments
e. Geography geographical market segments

Five Categories
3. Processes = INFORMATION
The flow of information and decision processes across the
organization's structure.
Processes can be either vertical or horizontal
- Vertical: through planning and budgeting
- Horizontal: through lateral relationships; cross
functional

Five Categories
4. Reward Systems = MOTIVATION
Influence the motivation of organization members to make
employees' goals in line with the organization's objectives
Rewards must be congruent with other parts of organization
designs

Five Categories
5. People Policies = SKILLS / MINDSETS
Influence and define employee's mindsets and skills through
recruitment, promotion, rotation, training, and development
Must develop organizational capabilities

Five Categories
The five factors must be internally consistent to enable
effective behavior.
Theres a need to match strategy with structure. The structure
depends on the diversity of the business.
Structure is only one aspect of the design. Equal importance
must be given to other categories such as processes, rewards,
and people.

Pros
The Star Model stressed that organizational design is more
than the organizational chart and the allocation of the right
people to the right positions. The model is a descriptive tool that
prevents overlooking important aspects during the design
process.
Galbraith made clear that strategy drives organizational
structure. If the industry's future is murky, an organization must
optimize its lower-level processes, rather than modify its
structure.
Viewing organizations as processors of information and
decision-making to analyze and design organizational structures
has proven useful.

Cons
The model was based on logic and lacked an empirical
foundation.
Galbraith's organizational design process assumed that the
organization is a 'tabula rasa', a blank sheet of paper whose
history is unimportant as input for the design process.
Galbraith limited strategy to the organization's internal rationale
and did not include an external, more economic analysis.

Application
HBC, Inc.
a chain of convenience stores
close to 100 branches
internal inefficiencies and implementation issues

Application
Strategy

Direction was to reverse losing

operations and improve sales

Structure

Assigned a dedicated brandman for BTB

market and principal lines

Processes Planning was executed to set up target

based on objective criteria and not just
based on prior sales
Rewards
System

Paid store personnel bonus based on

revenue target achievement

People
Policies

Aligned hiring criteria to competencies

and behavior needed
Trained store managers to be competent
in local store marketing

Application
RESULTS:
Reversed losing operations
Reached sales budget (1st P1B in 2005)
Psychological rewards:
- High morale of employees
- Feel good Do good culture

End of Presentation

Thank you for

your
attention!