9: Executing Strategy through Organizational Design
- Page ID
- 10969
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- This page examines organizational structure and control in businesses, focusing on General Electric (GE) as a case study. It covers the fundamental elements of organizational structure, their types, advantages, and disadvantages. The importance of control and its different forms is highlighted, as well as how legal business forms influence organizational structure.
- 9.2: The Basic Building Blocks of Organizational Structure
- This page covers organizational structure's key components: division of labor, vertical and horizontal linkages, and informal relationships. It explains how task specialization boosts productivity through historical and modern examples. Vertical linkages clarify reporting relationships, while horizontal linkages promote peer collaboration. Informal relationships influence workplace dynamics. Grasping these elements helps managers improve organizational efficiency and effectiveness.
- 9.3: Creating an Organizational Structure
- This page explores various organizational structures, including simple, functional, multidivisional, and matrix forms, each tailored to align with a firm's strategy. It examines how smaller firms use simple structures, while larger ones may adopt functional or multidivisional structures for efficiency and adaptability. The matrix structure promotes collaboration but can lead to confusion. Additionally, it discusses boundaryless organizations, exemplified by W.L.
- 9.4: Creating Organizational Control Systems
- This page examines three organizational control types essential for strategy execution: output control, focusing on performance metrics; behavioral control, guiding actions through rules; and clan control, encouraging shared values. It highlights innovative practices at Google that enhance creativity, and the influence of management fads, stressing the need for a balanced approach to control systems.
- 9.5: Legal Forms of Business
- This page discusses the main legal forms of business: sole proprietorships, partnerships, and corporations, as well as specialized types like S corporations and LLCs. Sole proprietorships allow full profit ownership with personal liability, while partnerships share profits and require trust. Corporations provide separation between ownership and management but face double taxation.
- 9.6: Conclusion
- This page discusses essential aspects of organizational design vital for executing strategies. It emphasizes the importance of authority delegation and labor division for efficiency, leading to formal organizational charts, particularly in larger firms with complex structures. The chapter also highlights the role of various organizational control systems and notes that a business's legal form impacts its organizational structure.