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Chapter 7

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Queen's University
COMM 103
Gary Bisonnette

Chapter 7 – Developing Your Business Structure and Culture Business System Design : 1. Organizational Structure, Culture and Management Approach -formal framework around which the business system is designed -directs and influences: • collaboration • exchange of knowledge • the communication of and sharing of ideas • the work environment surrounding the accomplishment of tasks • meeting of responsibilities 2. Control Systems to Manage Strategic Intent - Managerial evaluation and control processes utilized to determine success of organization in meeting its strategic and operational goals and objectives • Financial management systems • Establishment of key success metrics relating to productivity, market share growth, and asset performance - Formalized communication tools used to distribute critical info up, down, and across the organization - Control systems designed to guide managers & employees during integration of business level strategies in support of the overall corporate level vision and mission 3. Mechanisms for Effective Talent Management - Decision-making hierarchy - Delegated span of control within an organization - Allocation of position power within it 4. Operational Processes and Market Support & Alignment - Focuses on the processes and initiatives needed to support and direct: • Product/service transformation process within the organization • Distribution, marketing, sales and service in support of these products/services • These operational/market support processes = VALUE CHAIN *An organization’s business system needs to be designed and developed in a way which ensures that the organization functions, on a day-to-day basis, in a manner which maintains solid alignment between the strategic intent of the organization and the activities which are taking place in support of this intent. Developing the Organizational Framework : 1. STRUCTURE - Formal framework around which tasks are organized and responsibilities allocated within organization - Customer “touch points” (when designing structure, we need to think about how we interact w/ customers and design framework in a way which best facilitates these interactionsensures the highest level of responsiveness to meeting the needs of the individuals/businesses who buy and use our products - Requires ongoing monitoring to ensure that it continues to meet the needs of org as it grows/contracts; not static - Assessed against changes in marketplace (ensure they remain pertinent to maintaining our connection w/ target markets, respond to competitive pressures, support stakeholder/shareholder expectations, and meet legal requirements) - Drives efficiency and effectiveness - Types of structures: • Simple structure – owner makes all decisions • Functional structure – organizes around departments (Marketing, HR, Manufacturing, Finance, etc.) • Customer structure – organizes around customers (Individuals, Businesses, Institutions, Charities) • Divisional structure – organizes around divisions (Health & Medical, Small Appliances, Industrial Products, Customer Credit)branch into specific products as org evolves • Geographic Structure – organizes geographically (North America, Europe, Asia, Central America, South America) • Matrix Structure – need for employees from various departments to work jointly in cross- functional environment, on a project/specific initiative for a defined period of time (ex. engineering firms, construction companies) - Ability to create more efficient/effective structure & create stronger customer relationships = competitive advantage - Structural building blocks: • Customer Intimacy: 1) Ensure that structure is built on ensuring that interactions & connectivity to customers meet these customer contact, service, and support expectations 2) Supports value proposition 3) Encourages/rewards customers for doing business w/ organization, resulting in repeat business; creates potential barrier to competitors • Work Efficiencies 1) Need to fully analyze the type, number & responsibilities of various positions within org, and align these to the tasks needed to be completed in order to support the design, development, marketing, distribution & sale of products & services efficiently/effectively 2) Purpose is to create sustainable competitive adv • Degree of Departmentalization 1) Dividing org’s work units into defined functional areas 2) Take into consideration specific skill sets needed for employees involved & the tasks/responsibilities which need to be completed 3) Creates synergies within department = max efficiency/effectiveness 4) Ex. Functional structure 5) Adv = shared tasks, economies of scale, ease of managing, greater control over quality of work produced 6) Disadv = decisions made in isolation of other org needs, reduced cross-org communication, loss of org’s big picture, tendency to focus on internal priorities vs. external customer, market & stakeholder needs 2. CULTURE & ENVIRONMENT - Defines how individuals within the org behave & how the org, as a whole, will react to internal & external challenges & stimuli (manner in which all layers of org interact with each other) - Reflects behavioural aspect of internal processes & procedures used to facilitate completion of tasks & mgmt. of outcomes - Underlying values, attitudes & interactive relationships which govern how work is to be accomplished - Cultural Interconnectivity • Organizational Dynamics • Divisional Dynamics • Departmental Dynamics • Team Dynamics • Individual Position Dynamics - Cultural Dimensions Model: outlines 5 key dimensions which managers need to assess as they evaluate impact of cultural interaction both within and outside of org - Zones of Cultural
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