Organizational Design Alignment of Organizational Structure with Strategy

Organizational Design

Alignment of Organizational Structure with Strategy

Humans Organizing

From Caves to Wall Street We still tend to behave the same

Human Need for Structure • Biological • Social • Psychological 5

Protection

E. O. Wilson 7

Sense Making

Weick 9

Psychologic 10

Human Need to Belong and Connect to other Humans 11

Making Sense of Today Shaping Tomorrow

Organizational Design Responding to a changing environment by first creating a strategy and then a structure, in order to focus human activity on accomplishing concrete objectives. Structure involves: delineating responsibilities, roles, control systems and accountability. In addition, structure sets forth decision-making authority and the formal and informal reward system. 13

Structure Options ¡ Loose –Tight (organic) ¡ Matrix ¡ Virtual ¡ Tight (mechanistic) ¡ Control is primary concern ¡ Process Driven ¡ Procedure Driven

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CRITERIA FOR ORGANIZATION DESIGN An organization’s efficiency refers to reducing costs through economics of scale, lower overhead, or increased productivity. Businesses often shuttle back and forth between centralized and decentralized structures as they try to apply these different criteria. High Centralized &/or Functional (Mechanistic) Internal Efficiency Decentralized/ Line of Business (Organic) Low High Responsiveness An organization’s responsiveness is its effectiveness in meeting unique customer needs. Generally, a highly decentralized organization is better able to meet these needs. 17 Gary Richardson on Strategy

The Org 18

Some Thinking at the Edge 8

Strategic Alliances TYPES ¡ Unified Sutter ¡ Joint Ventures ¡ Takeover/Mergers ¡ Equity Investment ¡ Research and Development Partnerships ¡ Technology Transfers ¡ Original Equipment Manufacturer Partnerships ¡ Licensing ¡ Joint Marketing/Distribution 2 0

Strategic Alliances IBM Development Lab Beijing GM Pan Asia Auto Design Center Product

Gillian: The Silo Effect

Silo Busters 23

Organic Perspective

Joint Special Operations Task Force • Tremendously competent for dealing with a world that no longer exists

Actions • • Big picture thinking down to lowest levels in organizations Tear down silos between services and functions Create an organization composed of teams Create transparency