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Chapter 7

Chapter 7.docx

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Queen's University
COMM 103
Gregory Libitz

Chapter 7: Developing Your Business Structure and Culture Business System Design  There are four key components of a business system and when properly designed, aligned, and developed, ensure the successful execution of a business strategy  An org’s business system needs to be designed and developed in a way which ensures the org functions in a manner which maintains solid alignment between the strategic intent of the org and the activities which are taking place in support of this intent Organizational Structure, Culture and Management Approach  Relates to the formal framework around which the business system is designed and how structure directs and influences collaboration, the exchange of knowledge, the communication of and sharing of ideas, and the work environment surrounding the accomplishment of tasks and the meeting of responsibilities (Chapter’s focus) Control Systems to Manage Strategic Intent  Defines the managerial evaluation and control processes utilized to determine the success of the org in meeting its strategic and operational goals and objectives o Would include financial mgnt systems, the establishment of key success metrics relating to productivity, market share growth, asset performance, etc.  Also refers to the formalized communication tools used to distribute critical info across the organization  These control systems are designed to guide managers and employees during the integration of business strategies in support of the overall corporate vision and mission Mechanisms for Effective Talent Management  Refers to the decision making hierarchy, and the delegated span of control within an organization, and the allocation of power within it Operational Processes and Market Support Alignment  Focuses on the processes and initiatives needed to support and direct the prod/serv transformation process within the organization, the creation of the value proposition in support of these prod/servs, and the distribution, marketing, sales, and service in support of these prod/servs o These operational and market support processes are commonly referred to as the Value Chain Developing the Organizational Framework  Provides the backbone as to how the organization will facilitate the delivery of operational plan and, ultimately, its vision and mission statement  When developing an org’s framework, manager need to consider three key questions 1. What is the best structure which will develop, connect, and maintain relationships with current/anticipated customer base, & ensure the effective and efficient design, development, and delivery of our prod/servs to the marketplace? 2. What culture/environment is needed to deliver & reinforce the market position which we are striving to achieve, and facilitate the development and maintenance of high performance work units and systems within our org? 3. What management approach do we feel will best support the activities and interactions required within the org in order to successfully achieve the goals and objectives defined in our strategic plan? Structure  Relates to the formal framework around which tasks are organized and responsibilities allocated within an organization  When designing structure, we need to think of the ways in which we interact with our customers, and design the structure in a way which facilitates these interactions and ensures the highest level of responsiveness to meeting the needs of customers  Need to understand that structure is not static – it requires on-going monitoring to ensure that it meets the needs of the organization as it grows (or contracts)  Organizational structures should be thought of as an almost customization of the manner in which an organization perceives it is best able to manage its business system and deliver its products/services to the marketplace Types of Structures  Simple: Entrepreneurs launching a new business, no formal hierarchy of positions  Functional: Organizes around departments  Customer: Organized around specific consumer categories which enable specific teams to focus and specialize on specific consumer groups – Each consumer category will have each function of mgnt (maybe not Finance/HR)  improved connection w. consumers  Divisional: Structure is built around products lines – used when they have multiple lines for different consumers or if they own multiple businesses – each have functions of mgnt  Geographic: Organized based on location of where you sell – used when global since each region has different cultural desires, no region is the same.  Matrix: Managers for each product as well as one for each location (P&G is organized this way)  Leads to the most efficient use of resources, the managers in tandem know all info on the product as well as the location  Project: Teams are made based on individual expertise to complete a project and then dispersed once that project is completed  Virtual: Hire people from around the world when you need to get a job done – there is no full-time staff, also more flexible and carry no/little fixed costs (all variable costs) Building Blocks of Structure Customer Intimacy  Refers to the need to ensure that the structure is built on ensuring that interactions and connectivity to customers meets these customer contact, service and support expectations o As org’s grow, they have the tendency to build the structure more around internal efficiencies and practices vs. around supporting a product’s value proposition Work Efficiencies  Refers to the need of the org to fully analyze the type, number, and responsibilities of the various positions within the org, and align these to the tasks needed to be completed in order to support the design, development, marketing, distribution, and sale of the org’s product/service in the most efficient and effective manner possible  This assessment could include initiatives like re-engineering fabrication/assembly processes, reviewing continuous improvement tactics, assessing packaging and shipping procedures, defining new uses and modifying existing uses of technology, determining HR locations to prod/servs, implementing quality assurance protocols, and redefining specific task requirements and responsibilities on a position-by-position basis  A key outcome of the evaluation is to create core competencies within the org that enable it to compete more effectively and hopefully result in a sustainable competitive advantage Degree of Departmentalization  Refers to dividing the org’s work units into defined functional areas  Takes into consideration the specific skill sets needed for the employees involved and the tasks/responsibilities which need to be completed o Trying to centralize the tasks involved, thereby creating synergies within the department – the end result being a maximization of efficiency and effectiveness  Departmentalization is generally driven by efficiency and effectiveness outcomes  Advg: Sharing of tasks, economies of scale (due to centralization of tasks), ease of managing (due to narrowly-defined focus), greater control over the quality of work  Disadvg: Can lead to “silo mentality” – decisions made in isolation from other org needs, reduced cross-org communication, loss of the org’s corporate vision, tendency to focus on internal priorities versus the external customer, market, and shareholder needs Culture and the Environment  Culture defines how the individuals within the org behave and how the org will react to both internal and external challenges and stimuli  It reflects the behavioural aspect of the internal processes and procedure which the organization uses to facilitate the completion of tasks and the management of outcomes  The underlying values, attitudes, and relationships dictate how work is accomplished  Managers need to take into consideration the environment that employees want to work in and the norms/behaviours they want to reinforce Culture and the Environment  Managers need to recognize that immigration and the interconnectivity of the global marketplace will bring different cultural backgrounds into contact with one another  This cultural diversity not only impacts how individuals interact, but also how individuals perceive authority, how they negotiate solutions, how they view decisions, and how gender influences their perception of authority (pg 223 for Cultural-Dimensions model)  Focusing on internal culture, managers can set the tone and seek to develop a measure of control over the environment within which the org operates daily o Do this by defining the type of culture desired – by defining behavioural norms and/or behavioural boundaries around four zones (cont. below) Employee Interaction  Refers to the level and style of interaction which occurs between employees, and between the work units and their m
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