Organizational Dynamics.pdf 4k1j5g

ORGANIZATIONAL PRACTICES IN THE FIVE PHASES OF GROWTH

Category Management Focus

Phase 1 Make and Sell

Organizational Structure Top-Management Style Control System

Informal Individualistic and entrepreneurial Market results

Management Reward Ownership Emphasis

Phase 2 Efficiency of operations Centralized and functional Directive

Phase 3 Expansion of market

Standards and cost centers Salary and merit increases

Reports and profit centers Individual bonus

Decentralized and geographical Delegative

Phase 4 Consolidation of organisation Line staff and product groups Watchdog

Phase 5 Problem solving and innovation Matrix of teams Participative

Plans and investment Mutual goal setting centers Profit sharing and Team bonus stock options

“Doing different things” = ?? and “Doing things differently” = ??

The following were the vision statements of which three companies? “one day the camera would be small enough so everyone would carry one in shirt pocket” “one day we all would be connected without wires” “voice, data, and images would extend to every person and device in the world”

The root causes of organizational decline INTERNAL • • • • • • • • • • • •

position captivity Innovation breakdown Core business abandoned prematurely Failed acquisition Key customer dependency Strategic diffusion or conglomeration Adjacency failures Voluntary growth slowdown Talent shortfall Board inaction Organization structure Incorrect performance metrics

EXTERNAL -----

Regulatory action Economic downturn Geopolitical changes National labour market

Weitzel and Jonssson (1989)

The Paradox of Organizational Failures • Strategic Frames (the set of assumptions that determine how managers view the business) – “BLINDERS” • Processes (the way things are done) – “ROUTINES” • Relationships (the ties to employees, customers, suppliers, distributors, shareholders) – “SHACKLES” • Values (the set of shared beliefs that determine corporate culture) – “Dogmas”

Responding to Challenges during Organizational Decline • Pay attention to the attributions that make about the causes of decline

organizational

• Promote diffused power for ideating innovative solutions, combined with concentrated power at the decision implementation stages • Firm’s slack resources should not be overstretched during good times • To maximize the chances of innovation, top managers should take an active role in creating or redefining the firm’s mission