Advantages And Disadvantages Of Centralized Organizational Structure – Chapter 10 Building an Organization with the Ability to Execute Good Strategy, People, Talent, and Structure Copyright 2012 The McGraw-Hill Companies, McGraw-Hill/Irvine.
Why hiring, training and retaining the right people are key elements of the strategy execution process. Implementing a good strategy requires continuously building and updating your organization’s resources and capabilities. Receive instruction on issues to consider in creating an organizational structure that supports strategy and aligns the workforce. Recognize the advantages and disadvantages of centralized and decentralized decision-making in implementing a chosen strategy.
Advantages And Disadvantages Of Centralized Organizational Structure
Operations related to managing both people and business processes. This is a job for the entire management team. Not just a few senior managers. It can take years to develop into a true talent rather than a strategy. Change requires a strong commitment to execution and effectiveness.
Centralized & Decentralized Organizational Structure
Strategy Execution Task: This involves identifying the specific techniques, actions, and behaviors needed to execute the strategy smoothly. Complete Results Getting things done (Leadership) and getting it right (Management)
10.1 The 10 Key Tasks of the Strategy Implementation Process Agenda for Strategy Implementation Chapter 10 Chapter 11 Chapter 12
Those who work in organizations with managers and employees who can execute strategies well. Develop the organizational competencies necessary to successfully execute the strategy. Create an organizational structure that supports the strategy. Allocate sufficient budget (and other) resources to implement the strategy. Establish policies and procedures that facilitate the implementation of the strategy. Implement best practices and business processes that continuously improve strategic execution activities. Equip people with information and operational systems that enable them to perform strategic roles. Link rewards and incentives to achieving strategic and financial goals. Develop a corporate culture that supports good strategy execution. Use the necessary internal leadership to drive strategy execution.
What Is Centralization? Definition, & Pros/cons
Build a strong management team and talented staff. Update, upgrade, and modify resources and capabilities to match the chosen strategy. Create an organizational structure that supports the strategy.
Build a strong executive team: A planner who asks the tough questions and an operator who selects, manages and brings in the right people. Operators who transform decision-making into action that produces sustainable competitive advantages. The bottom line: a large group of talented activist managers.
Why don’t you want to work as a manager for General Electric? If you are a GE manager overseeing a sustainability manager. How do you rate them as a “C” player?
Centralized Vs Decentralized Purchasing: What Is Best?
Intensively screens and evaluates candidates to ensure the best and most suitable candidates are selected. Provide training programs throughout the employee’s career. Circulate promising candidates through challenging and skill-building international assignments. Create an exciting and engaging work environment. Making the company a great place to work. Use financial incentives and other incentives to retain employees Skills Coach middle performers to develop their skills and abilities. while eliminating low performance
Building guidelines Building competencies and capabilities Developing internal talent Recruiting talent through mergers and acquisitions. Recruiting talent through collaborative partnerships
Management measures to develop competencies and capabilities. Strengthening the company’s skill base, knowledge and intelligence. Coordinating and unifying the efforts of various groups and departments.
Organic Vs Mechanistic Organizational Structure
14 What is it about the Toyota Production System (TPS) that makes it difficult for competitors to imitate? What is the relationship between continuous improvement and performance in TPS? Why is the Ishikawa (Fishbone) diagram useful for solving TPS problems?
Think strategically about your company’s knowledge base and skills. Set a long-term goal to improve your organization’s ability to perform well. Developing a competency into a competency or capability at a good and reasonable cost Think strategically about the company’s opportunities and challenges, and innovate, update, and renew competencies and capabilities as needed to gain and maintain a competitive advantage.
Questions about market opportunities If market opportunities outpace the required competencies. Questions about competitive necessity Industry, technological or competitive conditions are moving rapidly at critical moments. Challenges to Successful Integration Incomplete knowledge and complex behaviors may not be easily transferred from one organizational unit to another.
Creating An Organizational Structure
Approaches to Acquisition Opportunities Outsourcing Outsources functions that require expertise to a primary supplier or other service provider. Partner with companies that have complementary resources and capabilities. Participate in collaborative partnerships to learn how partners work.
Training is essential: practicing skill-based strategies. competition and different ways of working Organizational efforts to develop skill-based competencies. As technology changes rapidly, providing employees with technical knowledge puts companies at risk of losing their competitiveness.
High strategic mobility: a complex social process that is difficult to imitate and takes a long time to develop. Enhance corporate resources and competitiveness to support business models. Reducing costs and enabling companies to deliver more value to customers. This allows the company to react more quickly to market changes. Beat competitors in the market with new products and services. and gained undisputed market dominance.
Difference Between Centralization And Decentralization Of Organization
Ensure the structure is strategic: Which activities in the value chain will be performed internally and which will be performed externally. Adjust the company’s organizational structure in line with the strategy. Determining the delivery force facilitates collaboration with external partners and strategic partners.
Performance-related benefits of outsourcing: It helps outsource competitors in strategy-critical activities. and turning core competencies into prominent competencies, reducing bureaucracy, reducing structure, and speeding up decision-making. and shortening the time to respond to changing market conditions. Strengthen companies and ensure better execution of strategy through partnerships with suppliers and channel partners.
Assignment includes responsibilities, functions, and formal and informal reporting relationships for the Company. Structure aligns with strategy: Design supports customer value. Reduces operational costs, bureaucratic costs and operational efficiency.
Centralized Vs. Decentralized Logistics: Which Is Better?
Simple structure (line and staff) work structure (department or single unit) multi-department structure (department or M-shape) matrix structure (joint or combined) Strategy Implementation Requirements: Selected Strategy Ability and Execution Centralized or Decentralized Control
Centralized decision-making Organizational approach to decision-making Centralized decision-making power is held by senior executives delegated to managers and lower-level employees.
10.1 Centralized Decision-Making Centralized Organizational Structure Decision-Making Basic Principles of Centralized Organizational Structure The most important decisions should be made in the hands of experienced senior managers. Experience and judgment in determining best course of action. Low-level staff lack the knowledge, time, and inclination to properly handle the work. Top-down control is an effective way to coordinate company activities. Decision-making power should be in the hands of the person closest to and familiar with the situation. Decision makers need to be trained to think well. Companies that integrate the intellectual capital of all employees excel at command and control.
The Pros And Cons Of A Dao
10.1 (cont.) Advantages and Disadvantages of Centralized and Decentralized Decision-Making Forming a Centralized Organizational Structure Decentralized Organizational Structure Key Advantages Address accountability through strict top-down control. Eliminate conflicts of interest between people with different views or interests. It enables quick decision-making and strong leadership in critical situations. Employees are encouraged to take initiative and responsibility. Encourage employee motivation and engagement in the business of many companies. Stimulates new ideas and creativity Enables rapid response to market changes May lead to fewer layers of management.
10.1 Forming a centralized organizational structure A centralized organizational structure. A major drawback is increased response time by those closest to market conditions. Because they need permission for their work. Does not promote accountability between lower-level managers and higher-level employees Prevent lower-level managers and lower-level employees from taking any initiative. lack of senior management “Total control” Top managers do not know the performance of authorized personnel under their supervision. If the decision makers make the wrong decision, it puts the organization at risk. This can make interactions worse.
Foster close collaboration between businesses to avoid duplication. Strategic alignment across businesses. Centralize relevant functions that require close organizational coordination.
Building An Organization Capable Of Good Strategy Execution
Strategic alliance outsourcing management joint venture collaboration partner Building a network structure: using “relationship managers” to build and maintain valuable partnership agreements.
Alignment with Strategy Choose a basic organizational design that aligns with strategy. Complement the design with appropriate coordination mechanisms. Create a network of cooperation and communication.
Understanding Organizational Structures
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