1. Chapter 11 The Organizational Context
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

2. © 2014, Cengage Learning EMEA, ISBN 97814082683
Contents
Introduction
The issue of organizational development
The paradox of control and chaos
Perspectives on the organizational context
Managing the paradox of control and chaos
The organizational context in international perspective
Readings and Case 11
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

3. © 2014, Cengage Learning EMEA, ISBN 97814082683
Introduction
As with families, organizations inherit organizational culture, organizational processes, internal and external relationships, rivalries, brands, competences and other key resources
What is the role of managers in achieving a new alignment with the environment and what input can be garnered from other organizational members? (organizational development)
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

4. The issue of organizational development
Sources of leadership influence
Legitimate power – e.g. formal authority to assign work, spend money
Coercive power – capability to punish or withhold rewards e.g. giving a poor performance review
Reward power – e.g. awarding salary increases
Referent power – when organizational members let themselves be influenced by a person’s charismatic appeal
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

5. The issue of organizational development
Levers of leadership influence
There are 3 ways for leaders to seek influence:
Throughput control – focus attention on actions being taken by others in the organization
Output control – set objectives that should be met
Input control – influence the general conditions under which activities are carried out
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

6. The issue of organizational development
Arenas of leadership influence
The political arena – managers need political support to push through significant changes and ensure acceptance and compliance during the period of implementation
The cultural arena – leaders must be capable of questioning the shared values, ideas and habits prevalent in the organization and offer a set of behaviors
The psychological arena – leaders must win the hearts and minds of the members of the
organization
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

7. Paradox of control and chaos
Managers want to control the development of the organization but understand that letting go of control is often beneficial
Need for top-down imposition and bottom-up initiative
Demand for top management control – top managers need to be able to direct developments in the organization and to have the power to make the necessary changes. They need strategic
control.
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

8. Paradox of control and chaos
Demand for organizational chaos – a period of disorder is often a prerequisite for strategic renewal, allows experimentation, pilot projects, encourages self-organization and frees the way for bottom-up ventures
Read carefully Exhibit 11.1 Gazprom: Built to dream
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

9. Perspectives on the organizational context
The organizational leadership perspective
Top management should take charge of the organization
A lack of control will cause strategic drift
To be successful managers need considerable personal power, must be trusted, admired and respected
Finding and developing new leaders is a high priority for top management
Ideas can come from anywhere in the organization but leaders are responsible for leading the organization in a certain direction and achieving results
Read carefully Exhibit 11.2 Leading by Italian
example at Chrysler
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

10. Perspectives on the organizational context
The organizational dynamics perspective
Strong leaders are the exception not the norm
Political, cultural and learning dynamics leave top managers with little direct power
Organizational chaos can create conditions for development – managers’ most important task is to ensure that ‘self-organization’ functions properly
Read carefully Exhibit 11.3 Migros:
By and for the people
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

11. Managing the paradox of control and chaos
Balancing – demand for top management control is higher in production units than in a professional services firm, demand for organizational chaos prevails in business development units
Juxtaposing – Strategizing managers may use different leadership styles for different areas
Embracing – contrary individuals brought together bring creativity and opportunity – ‘dynamic duos’
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

12. Managing strategy paradoxes
A paradox has no answer or set of answers
Six different ways of dealing with a paradox
Navigating – focus on one contrary element at a time
Parallel processing – separate the contrary demands in different internal or external organizational units
Balancing – trade off elements of the opposing demands
Juxtaposing – manage opposite demands
Resolving – develop a new synthesis between competing demands
Embracing – embrace and actively use the
tension as a source of creativity and
opportunity
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

13. Managing strategy paradoxes
Organizational leadership versus organizational dynamics perspective
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

14. The organizational context in international perspective
Different leadership styles among European executives
Sweden and Finland consensus’ style (lower power distance, low masculinity)
Germany and Austria ‘working towards a common goal’ (specialists working together within a rule-bound structure)
France ‘managing from a distance’ (focus on planning, high power distance)
UK, Ireland and Spain ‘leading from the
front’
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN

15. The organizational context in international perspective
Locus of control
People with an internal locus of control believe that they can shape events and have an impact on their environment
People with an external locus of control believe that they are caught up in events that they can hardly influence
Cultures differently with regard to the perceived locus of control
Level of uncertainty avoidance
Some countries have a preference for order and structure – uncertainty avoidance
There is a preference for the organizational leadership perspective in countries that score high on uncertainty avoidance
Prevalence of mechanistic organizations
People taking a mechanistic view see leaders as mechanics – the organizational system can be redesigned and restructured to pursue another course of action where necessary
People taking an organic view see a leader as the head of the clan, bound by tradition and loyalty but able to count on the emotional commitment of the members
Only to be used with Strategy : An International Perspective 5th edn by Bob de Wit
© 2014, Cengage Learning EMEA, ISBN