EXPLORING STRATEGY

Strategy in Action
4: Organising for Success

Learning Outcomes
Identify key challenges in organising for success
Analyse structural types of organisations in
terms of strengths and weaknesses
Recognise how important organisational
processes need to be designed to fit their
circumstances
Appreciate how internal and external
relationships can integrate knowledge and
resources

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1. What is Configuration?
An organisations configuration
consists of the structures, processes
and relationships through which the
organisation operates.

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Organisational Configurations

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Key Challenges for

Organisations
The speed of change and the
increased levels of uncertainty in
the business environment
The importance of knowledge
creation and knowledge sharing
The rise of internationalisation

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2. Structural Types

Functional

Multidivisional

Matrix

Transnational

Project-based

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2.1. Functional Structure

Is based on the primary activities that
have to be undertaken by an
organisation such as production,
finance and accounting, marketing,
human resources and research
development

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2.1. Functional Structure

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Functional Structures
Advantages
CEO in touch with all
operations
Reduces/simplifies
control mechanisms
Clear definition of
responsibilities
Specialists at senior
and middle
management

Disadvantages
Overburdened with
routine issues
Neglect strategic
issues
Difficulty coping with
diversity
Coordination between
functions
Failure to adapt

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2.2.Multidivisional Structures
Is built up of separate divisions on the basis of
products, services or geographic areas

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A Multidivisional Structure

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Multidivisional Structures
Advantages

Disadvantages

Flexible

Duplication the
functions and cost of
central

Control from distance by

monitoring performance
Ownership of strategy
Specialisation of
competences
Training in strategic
view

Fragmentation and
non-cooperation
Danger of loss of
central control

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2.3. Matrix Structure

Is a combination of structures which could take the

form of product and geographical divisions or
functional and divisional structure

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A Matrix Structure

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Matrix Structures
Advantages

Disadvantages

Integrated knowledge

Length of time required

for decision making

Flexible
Allows for dual
dimensions

Unclear job and task

responsibilities
Unclear cost and profit
responsibilities
High degrees of conflict

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2.4. Transnational Structures

Combines the local responsiveness of the

international subsidiary with the coordination
advantages found in global product companies

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Transnational Structures

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2.5. Project-Based Structure

A project-based structure is one
where teams are created, undertake
the work, and then are dissolved.

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Comparison of Structures

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Design Tests for

Checking Structural Solutions
Market-Advantage

Difficult Links

Parenting
Advantage

Redundant
Hierarchy

People

Accountability

Feasibility

Flexibility

Specialised
Cultures
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3.5 Types of
Control Processes

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What is a
Balanced Scorecard?
Balanced scorecards combine both
qualitative and quantitative measures,
acknowledge the expectations of
different stakeholders and relate an
assessment of performance
to choice of strategy.

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An Example
of the Balanced Scorecard

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4. Relationship
Relating Internally and Externally

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4.1. Relating internally

4.1.1. Relating to centre
Devolution concerns the extent to
which the centre of an organisation
delegates decision making to units
and managers lower down
in the hierarchy.

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Strategy Styles for

Division of Responsibility
Strategic planning style
Financial control style
Strategic control style

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Strategic Planning Style

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Financial Control

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Strategic Control

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4.1.2. Methods of
Relating Externally

Outsourcing

Strategic Alliances

Networks

Virtual organisations

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Chapter Summary (1)

Organising for success is about an
organisations configuration, built on three
related strands: structures, processes, and
relationships
Successful organising means responding
to the key challenges facing the
organisation: control, change, knowledge
and internationalisation
There are many structural types, each with
its own strengths and weaknesses
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Chapter Summary (2)

There are a range of different
organisational processes, direct or indirect
and focused on input or outputs, to
facilitate strategy
Relationships are important for success
Separate organisational strands should
come together to form a coherent
reinforcing cycle

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Case Example: Hurricane Katrina

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Case Example: Hurricane Katrina

What was the strategy of the Department
of Homeland Security in the period
immediately before Hurricane Katrina?
In the light of this strategy, what if any
changes should be made to the
Departments organisational structure?
Who was responsible for the
organisational failures surrounding the
response to Katrina?
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