Prepared by group No. 2: Natalia Trunova (M ) Domingo Lee (M ) Libby Shun-Chi Chiang (M )

Chapter content Top management role in Organization Direction, Design, and Effectiveness Porter’s Competitive Strategy Miles and Show’s strategy typology Organizational Effectiveness Company’s profile Overview of the company Core competencies External environment Integrative module Horizon Analysis: Miles and Show’s & Porter’s Strategy Effectiveness Influence of structure on company’s design

The primary responsibility of top management is to determine an organization’s goals, strategy, and design, thereby adapting the organization to a changing environment The primary responsibility of top management is to determine an organization’s goals, strategy, and design, thereby adapting the organization to a changing environment

CEO Top management IInternal Situation IInternal Situation SStrategic Intent Effectiveness Outcomes O Organization Design D EExternal Environment EExternal Environment

 Opportunities  Threats  Uncertainty  Resource availability

 Strengths  Weaknesses  Distinctive competence  Leader style  Past performance

 Define mission  Official goals  Select operational goals  Competitive strategies

 Structural form  Learning  Efficiency  Information and control systems  Production technology  Human resource policies, inventives  Organizational culture  Interorganizational linkages

 Goal attainment  Resources  Efficiency  Strategic constituents

Differentiation Focus on Uniqueness Low-Cost Leadership Focus on efficiency

Source: Low CostHigh Cost Broad Overall Cost Leadership Differentiation Narrow Cost Focus Defferentiation Focus Competitive Advantage Competitive Scope

Source:

Source:

Bad strategyGood strategy It fails to define the problem; It is based on weak or fussy objectives; It is mostly fluff. Diagnosis; A guiding policy; Coherent action steps.

Organizational structure and design StrategyEnvironmentTechnologySize / life cycleCulture

Definition  Effectiveness  degree to which an organization realizes its multiple goals.  Efficiency  the amount of resources used to produce outputs. Overall effectiveness is difficult to measure in organizations.

 4 approaches to the measurement of organization effectiveness Goal approach Resource-based approach Internal approach Strategic constituents approach

Resource-based Approach Internal Process Approach Goal Approach Strategic Constituents Approach Resource Input Product and Service Outputs Organization Internal Activities & Processes Employees GovernmentOwners Customers Community Suppliers Creditors Exhibit 3.9

 Consists of identifying an organization’s output goals and assessing how well the organizations has attained those goals.  Activities the organization is really performing. E.g. output, profit, or client satisfaction  Indicators – operative goals – easy to measure

 Evaluates the ability of the organization to obtain valued resources from the environment.  Indicators  bargaining position,  ability to correctly interpret properties of the environment,  ability to use resources to achieve superior performance,  ability to respond to environmental changes.

 An evaluation of human resources and their effectiveness is important.  internal organizational health and efficiency  Indicators  Positive corporate culture and work climate  Confident between employees and management  Operational efficiency  Communication  Growth and development of employees  Coordination among organization’s parts

 measures efficiency by focusing on satisfaction of key stakeholders.  e.g. owners, employees, customers, creditors, community, suppliers, government  Indicators - Criteria of constituents groups  Usefulness - Constituencies have powerful influence on the organization, and it has to respond to demands

 Developed by R. Quinn and J. Rohrbaugh  Tries to balance a concern with various parts of the organization rather than focusing one part.  Combines several indicators into a single framework.  NASA example – different viewpoints

Competing values model

Exhibit 3.10

Case study: Horizon

 Business concept/strategy  Core competencies  Customers  Competitors  Future perspective

 John Lu founded Horizon Yacht in 1987  Horizon has endeavored to create and build yachts that embody each client’s dreams.  Integrated Company Structure.  Horizon Group Management Center functions by supervising the Horizon Group network: delivery center; mold center; human resources center; marketing center and IT center.

Source: Horizon Company’s official presentation materials

 Taiwan  Australia  China  Europe  Greece/Cyprus  Hong Kong  Japan  New Zealand  Russia  Singapore  South Korea  Turkey  United States Source: Horizon Company’s official presentation materials

 Advanced Technology  Sophisticated Craftsmanship  Extraordinary Design  Excellent Engineering  Quality Assurance  State-of-the-art Facilities

 2006 Awarded “Best Asian Super Yacht” Award and “Best Asian Yacht Builder” Award at the Christofle Asia Boating Awards 2006  2007 Awarded “Best Asian Yacht Builder (under 100 feet)” by Christofle Asia Boating Awards 2007  2007 Won the “2007 Taiwan Superior Brand” competition  2010 Horizon E88 motoryacht and SC46 solar power boat won the “Taiwan Excellence 2010” Awards  2011 Awarded “Best Asian Motor Yacht Builder ( 81 feet and up)” by Asia Boating Awards  2012 Awarded “Best Asian Yacht Builder (15-30 meter)” by Asia Boating Awards

Source: Horizon Company’s official presentation materials

Main competitors

 Dedicated to customer satisfaction.  Horizon strives to improve and advance upon every aspect of the boat building process.  Horizon also invests in the future, developing new models and series (focus on environmental friendly designs).

Perception of environment Underlying values unstable stable efficiencyinnovation Prospector Defender Horizon

DimensionsHorizon’s reality Stable market Ability of customization within smooth production process. Yachts of average 100 ft. on European (40%) and Australian (26%) markets. New market Risk diversification, creating more markets. Recently, plans have been made to expand to India. Expand into China through dealership. Emphasis on efficiency Employment of high-quality talent. Ability of group specialization and integration. Strengthen services. Emphasis on innovation CNC (Computer numerical control) milling system SCRIMP (Seemann’s Composites Resin Infusion Molding Process) for producing one -piece yacht hull (longest in the world in 2006). Yachts equipped with solar-power panels.

 The competitive advantage of Horizon is customization.  stability and equilibrium.  Growth and resource acquisition  Productivity, efficiency  Invests in the future, integrated enterprises to Horizon Group Co. - Open Systems Model  Improve process, developed internal communication - Internal Process Model

Horizon Yachts Human Relations Emphasis Internal Process Emphasis Rational Goal Emphasis Open Systems Emphasis STRUCTURE FOCUSFOCUS FLEXIBILITY CONTROL INTERNALEXTERNAL

Horizon Group Horizon Yachts Since: 1987 Employees:340 Atech Composites Since: 2000 Employees: 250 VISION Yachts Since: 2001 Employees: 250 PRIMIER Yachts Since: 2003 Employees: 110 CNC Mold Workshop Since: 2005 Horizon Furniture Since: Yacht Factories Total employees: 1000 Internal Process Emphasis

Horizon Group Horizon Group Customers Customer Service Center Marketing Center Purchasing Dep. Suppliers R & D Financial Dep. Human Resource Center Information Technology Center Knowledge Management Center Yachts Manufacture Factories Professional Task Force Center Market information United Delivery Center joint purchasing joint marketing Yacht information Fast service Order assignment Task assignment Think tank IT platform joint R&D sharing Financial control HR assignment Orders /Need Joint delivering Open Systems Emphasis

 US. → Europe Market  OEM → OBM  80~110ft → 120 ft  Customize (High Value add)  Ex. BMW motor  MIT = Made in Taiwan  Manufactory base – High Quality  Relatively low cost ( vs. Italy) Differentiation Low Cost Competitive Advantage

CEO Top management Internal Situation - Weak of Design - No brand image - Low Cost & High Quality Strategic Intent - Branding - EU market - Customize - Risk diversification Effectiveness Outcomes - Top 10 Brand Organization Design -Efficiency but Flexible External Environment - Decline of US market - OEM limitation - 120ft Yacht