1. Realizing Strategy ©2015 Robert M. Grant & Judith Jordan

2. Learning Objectives
By the time you have completed this topic you will be able to:
understand how strategic planning links to operational planning, performance management and resource allocation in implementing strategy
appreciate the basic principles that determine the structural characteristics of complex human organizations
select the organizational structure best suited to a particular business context
recognise how companies have been changing their organizational structures in recent years and the forces that have been driving these changes
understand the role of organizational culture in realizing strategy
©2015 Robert M. Grant & Judith Jordan

3. From Strategy to Execution The Generic Annual Strategic Planning Cycle
©2015 Robert M. Grant & Judith Jordan

4. The need for COOPERATION The need for COORDINATION
The Organizational Challenge: Reconciling Specialisation with Coordination and Cooperation
High productivity requires SPECIALISATION
The efforts of specialised individuals need to be integrated
The need for COOPERATION
The Agency Problem:
Employees’ goals ≠ Owners’ goals
The need for COORDINATION
Managing interdependency
THE ORGANIZATIONAL CHALLENGE
To design structure and systems that:
Permit specialization
Create incentives to align individual and firm goals
Facilitate coordination by grouping individuals and link groups with systems of communication, decision making and control
©2015 Robert M. Grant & Judith Jordan

5. Overcoming the Organizational Challenges of Managing Cooperation and Coordination
Mechanisms for aligning goals
Bureaucratic controls: rules and hierarchies of authority
Performance incentives: paying for productivity
Shared values: commonality of principles and values among organizational members
Mechanisms for cooperation
Rules and instructions
Routines
Mutual adjustment
©2015 Robert M. Grant & Judith Jordan

6. How Hierarchy Economizes on Coordination
©2015 Robert M. Grant & Judith Jordan

7. Defining Organizational Units
Tasks
Products
Geography
Process
Organizational units can be created around common tasks—i.e. grouping together employees who do the same job
Organizational units can be based on groups of products which form business units
Where a company serves a number of local markets, organizational units can be defined around these localities
A process is a sequence of interlinked activities. An organization. The individuals who undertake a process need to be within the same organizational unit. Functional organizations tend to combine task-based and process-based grouping
©2015 Robert M. Grant & Judith Jordan

8. A Functionally Structured Organizations
©2015 Robert M. Grant & Judith Jordan

9. A Multi-Divisional Structure: General Electric in 2009
©2015 Robert M. Grant & Judith Jordan

10. A Matrix Organization: The Royal Dutch Shell Group Before 1996
©2015 Robert M. Grant & Judith Jordan

11. Beyond Hierarchy: Alternative Organizational Forms
Adhocracies: Flexible, informal organizations with little formal structure where coordination is through presence of shared values, shared commitment, mutual respect and ease of communication
Team-based and project-based organizations: Organizations made up on multiple collaborative teams, often organized around specific projects—separate work assignments of limited duration
Networks: Groups of independent but closely-interdependent specialist firms typically located in close proximity to one another
©2015 Robert M. Grant & Judith Jordan

12. Beyond Hierarchy: Alternative Organizational Forms
Common characteristics
Focus on coordination rather than control
Reliance on coordination by mutual adjustment
Individuals occupy multiple organizational roles
©2015 Robert M. Grant & Judith Jordan

13. Corporate vs Organizational Culture
Corporate Culture
The values and ways of thinking and acting that senior managers encourage within their organizations
Organizational Culture
The values, ways of thinking and acting that exist informally within work organizations
©2015 Robert M. Grant & Judith Jordan

14. Some Key Questions Can organizational cultures be managed?
People are not easily manipulated
Attempts to change attitudes may be met with cynicism or resistance
How does culture affect performance?
It is difficult to measure broad concepts like culture and performance
Limited empirical evidence
©2015 Robert M. Grant & Judith Jordan