Ch.2 - Strategy, Organization Design, and Effectiveness

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University of Fraser Valley
Business Administration
BUS 304
Liz Wiebe

Chapter 2 Strategy Organization Design and EffectivenessThe Role of Strategic Direction in Organization DesignTop Management Role in Organization Direction Design and EffectivenessOrganizational PurposeMissionThe organizations reason for existence the overall goal of a companyIt describes the organizations visions its shared values and beliefs and its reason for beingIt is sometimes called the official goals which are the formally stated definitions of business scope and outcomes the organization is trying to achieveThe official goal statement defines business operations and may focus on values markets and customers that distinguish the organizationA mission statement communicates to current and prospective employees customers investors suppliers and competitors what the organization stands for and what it is trying to achieveOperative GoalsDefined descriptions of the ends sought through the actual operating procedures of the organization these explain what the organization is trying to accomplishThey typically pertain to the primary tasks an organization must perform similar to the subsystem activities identified in Chapter 1oOverall performanceProfitability reflects the overall performance in forprofit organizations and can be expressed in terms of net income EPS or ROIOther overall performance goals are growth and output volumeGovernment and nonprofit organizations dont have goals of profitability but they have goals that attempt to specify the delivery of services to people within specified expense levelsoResourcesThese goals pertain to the acquisition of needed material and financial resources from the environmentThey may involve obtaining financing for the construction of new plants finding less expensive sources for raw materials or hiring topquality technology graduatesoMarketThese goals relate to the market share or market standing desired by an organizationMarket goals are the responsibility of marketing sales and advertising departmentsFor example Honda could have a goal of overtaking Toyota Motor Company as the numberone seller of cars in Japanmarket standingdesired position of the company in the futureoEmployee DevelopmentPertains to the training promotion safety and growth of employees and includes both managers and workersFor example Wegmans Food Markets was 1 on Fortune magazines list of 100 best companies to work for because of its motto Employees First Customers SecondoInnovation and ChangeThese goals pertain to internal flexibility and readiness to adapt to unexpected changes in the environmentInnovation goals are often defined with respect to the development of specific new services products or production processesFor example 3M has a goal that 30 of sales come from products that are less than 4 years oldchange readiness
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