successful strategy 3 parts
1. attractive market opportunity; 2. resources and capabilities to serve the market better than competitors can; 3. execution/ implementation a. motivation b. organization c. leadership
organization structure
specifies the firm's formal reporting relationships, procedures, controls, authority, decision-making processes to implement strategy
goal of organizational structure
whole organization can produce more than sum of the individuals separately
division of labor
different roles to increase specialization and expertise
coordination mechanism
integration of independent activities (supervision, rules, procedures, committees, etc.) across departments
distribution of decision rights
based on info --> decisions should be made by whoever has the most info: vertical distribution (centralization vs. decentralization), horizontal distribution (by departments)
organizational boundaries
what is done internally vs. externally
types of organizational structure
functional, divisional, matrix, network
functional organizational structure
unitary form, units are divided by type of tasks; efficient in a relatively stable environment, economies of scale, or for small or medium size enterprises
divisional organizational structure
multi-divisional form; units are divided by product or market; each division held fully accountable; responsive and adapt quickly to environmental uncertainty; mid-large firms
matrix form organizational structure
best of both worlds for large corporations BUT role ambiguity, lack of jurisdictional clarity, challenging to implement
network organizational structure
emerging organizational structure; startups, knowledgeable workers, fast and responsive to rapidly changing environments; people come together on a project-by-project basis
7s's
strategy, structure, systems, staffing, style, skills, shared values
corporate governance
the set of mechanisms used to manage the relationship among stakeholders and to determine and control the strategic direction and performance of organization; concerned with identifying ways to ensure that strategic decisions are made and implemented effe
effective ways to ensure strategy implementation (3 ways)
organization structure, corporate governance, incentive and control systems