1. Organization Designing and Leadership for Strategy and Success

2. Organization Structure
Organization Design, Leadership and Strategy
Organization Design
Organization Structure
Formal System of task and
authority relationship
Mechanism for control and
Coordination
Response mechanism to
environment
Organization Culture
Shared Norms and Values
Rituals and Conventions
Shared views about nature of business
Leadership
Strategy: The Pathway to Achieve Business Objectives

3. HOW IT IS USEFUL FOR AN ENTREPRENEUR TO KNOW ALL THIS?

4. Organization design Era 1: Self Contained Organization Design
(Functional, Divisional and Matrix)
Era 2: Horizontal Organization Design with Team – and Process Based Emphasis
(Ex. Engineering and design connection, Handling entire claim, )
Organize around complete workflow processes
Flatten hierarchy and use of teams
Appoint process team leaders
Provide expertise from outside the team
Enhances interaction with customers and suppliers
Works best when internal coordination, flexibility and responsiveness can greatly enhance customer value

5. Era 3: Organizational Boundaries Open Up
Hollow: Outsourcing the processes (PMC, Citec, MphasiS, BenQ)
Modular: Outsourcing the product parts (Bombardier, DaimlerChrysler Smart Car)
Virtual: Showing if there is more than actually present (M&S and PerUna, Symbian Ltd., Reflect.com)

6. New Demand on ENTREPRENEURS and VENTURES
Get the Right Partner on the Bus (Collaborative role, Partnership)
Select People With Lateral Organizing Skills (more of soft skills, appreciation for multidisciplinary approach)
Seek Clarity, Not Control (Co creation, Good contract)
Design Coordination Mechanism (Governance boards, Clear matrices, Periodic reviews)

7. Generic Strategies
Low-cost leadership
Differentiation
Focus

8. LEADERSHIP
Force
Mass * Acceleration =

9. Design Challenge

10. Design Challenge (cont.)

11. Design Challenge (cont.)

12. Design Challenge (cont.)

13. ENTREPRENEURSHIP IS A BALANCING GAME
Growth
Profit
Control

14. Organization Design, Growth and Leadership
Applying frameworks to understand different organization design and practices for both large and small businesses along the venture life cycle
Greiner’s Evolution and Revolution as Organizations grow, HBR , 1998
Assessing the different approaches appropriate to each stage of growth – managerial style, leadership, functional delegation, organizational structure and goals and entrepreneur’s involvement

15. Key Dimensions of Organization Development
Age of the organization
Size of the organization
Stages of the evolution
Stages of revolution
Growth rate of the industry

16. ORGANIZATIONS FOLLOW AN EVOLUTIONARY TRAJECTORY
Future of an organization may be less determined by outside forces than it is by the organization’s history.
It is similar to the tenet of psychologist that individual behavior is determined primarily by previous events and experiences, not by what lies ahead.

17. Greiner’s Five Phases of Growth
Large
Collaboration
Coordination
Size
“ ? “
Delegation
Direction
red tape
control
Creativity
autonomy
leadership
Small
Young
Age of the Organization
Mature

18. How Organizations Grow
Evolution
Revolution
Steady or prolonged growth and Stability
Substantial organizational change
Quiet periods
Turbulent Times
No major economic setback or internal disruption
Serious upheaval of management practices
Modest adjustments to maintain growth
Eg: Centralized Practices
New sets practices for evolutionary stage
Eg : Demands for Decentralization
Source: Greiner’s Evolution and Revolution as Organizations grow, HBR , 1998

19. PHASES OF GROWTH
Phase 1: Creativity Initiating the entrepreneurial venture Frequent and informal communication Long hour of work Control through immediate marketplace feedback & the leadership crisis

20. CONT… Phase 2: Direction
Functional organization structure is introduced
Accounting system for inventory and purchasing
More formal communication
The new manager and key supervisor take most responsibility, Lower level employees feel restricted
& the autonomy crisis (combined with concern on decision making ability)

21. CONT….
Phase 3: Delegation Greater responsibility to managers Profit centers and bonuses used for motivation Periodic reporting becomes major control tool Efforts in new acquisitions Infrequent communication from the top, brief visits & the control crisis

22. CONT….
Phase 4: Coordination Rise of formal system to achieve greater coordination Product groups are formed from decentralized units Formal planning and intensive reviews Hiring at headquarters to initiate companywide programs Formation of SBUs & the red tape crisis

23. CONT….
Phase 5: Collaboration Emphasis on greater spontaneity in management action through teams Social control and self discipline take over from formal control Quick problem solving through teams Headquarter staff experts are reduced in number Matrix-type structure is used frequently Use of conferences, educational programs etc. & Psychological Saturation

24. Organizational Design Challenges

25. HOW GREINER’S MODEL IS USEFUL FOR BUSINESS LEADERS
Knowing where the firm is in the developmental sequence
Recognize the range of solutions
Realize that solutions breed new problems

26. Factors for Survival and Growth (Company)
Financial resources
Personnel resources
Systems resources
Business resources

27. Factors for Survival and Growth (Entrepreneur)
Goals
Operational abilities
Managerial ability
Strategic abilities

28. Organization Design, Growth and Leadership
Applying frameworks to understand different organization design and practices for both large and small businesses along the venture life cycle
Greiner’s Evolution and Revolution as Organizations grow, HBR , 1998
Assessing the different approaches appropriate to each stage of growth – managerial style, leadership, functional delegation, organizational structure and goals and entrepreneur’s involvement

29. Greiner’s Five Phases of Growth
Large
Collaboration
Coordination
Size
“ ? “
Delegation
Direction
red tape
control
Creativity
autonomy
leadership
Small
Young
Age of the Organization
Mature

30. Organizational Practices and Phases of Growth
Category
Phase I
Phase II
Phase III
Phase IV
Phase V
Management Focus
Make and Sell
Efficiency of operations
Expansion of market
Consolidation of Organisations
Problem Solving and Innovation
Organisation Structure
Informal
Centralized and Functional
Decentralized and Geographical
Line Staff and Product Groups
Matrix of Teams
Top Management Style
Individualistic and Entrepreneurial
Directive
Delegative
Watch Dog
Participative
Control system
Market Results
Standards and Cost Centers
Reports and Profit Centers
Plans and Investment Centers
Mutual Goal Setting
Management Reward Emphasis
Ownership
Salary and Merit Increases
Individual Bonus
Profit Sharing and Stock Options
Team Bonus