Organizational design is not simply about structure and the resulting organizational chart. It is about the relationships between people, work, formal structures and informal practices and behaviors. It is about the way in which an organization structures and coordinates its people and process so it can benefit from its unique capabilities over the long-term. It determines who makes decisions and how those decisions will be made. It changes the role of the leaders as they become less decision makers and more decision shapers. Through organizational design, leaders become the shapers of the organization’s decision-making process. Organizational design and the resulting capabilities are the last sustainable sources of competitive advantage. Star Model of Organizational Design is a well-known model that has been used for decades to identify the key elements of an organization and focus on the issue of strategy and strategy implementation. Developed by Jay Galbraith, an American consultant and Continue reading
Strategic Management Tools
Case Study: A Critical Analysis of Restructurings by Sony Corporation
Restructuring is considered to be the corporate management term of reorganizing an organisations ownership, operations, legal and other structures within in order to make the company more profitable and more organized with its needs to be successful. There are many reasons for why restructuring includes the changes of the owner ships or the organisational structure, or a reaction towards a crisis or a change such as a change in the financial position, the company becomes bankrupt or it repositions or it bought out. Sony had restructured themselves approximately five times over nine years. They have reorganized operation systems, they have restructured management teams, and they have added structures in the purpose to make profits. Due to all their problems they faced, Sony tried to correct them by changing structures and even eliminating some to try solving the problems. Sony has restructured itself firstly by restructuring of electronics business, It has Continue reading
PEST Analysis – External Business Environment Analysis
A PEST analysis is a way to analyze the general external environment of an organization. Every organization has an external environment. The external environment is quite important because it is the environment in which a company operates. PEST analysis is a useful tool for understanding the “big picture” of the environment in which industry is operating, and environmental understanding will bring the advantage of the opportunities and guide to minimize the threats. PEST components are Political, Economic, Social and Technological. The PEST analysis is used to identify forces in the macro-environment that are affecting the business at present and are likely to continue to affect the business in the future. Macro-environmental analysis is interested in factors in the wider environment that influence the demand for the product or service offered by a company; demand for the product or service; the manner in which the product or service is distributed; the Continue reading
SWOT Analysis: Strengths, Weaknesses, Opportunities and Threats
SWOT which stands for an abbreviation of Strengths, Weaknesses, Opportunities and Threats; is an analysis that defined as method to examine organization’s internal factors dealing with strengths and weaknesses, and its environmental opportunities and also the threats. SWOT analysis usually use in the preliminary phase of decision making as a general tool which it designed for being antecedent to strategic planning in different case and applications. SWOT Analysis can be used as a model, process, technique or framework to provide information about those factors strengths, of an organization by having many applications with possibility of being used in all the levels of the organization. SWOT analysis is a part of the strategic planning process. Companies have some internal and external forces in the business environment. As a first step of a strategic planning system, the strategic factors that are related with the potential of the company, should be identified and Continue reading
An Introduction to Blue Ocean Strategy
Blue Ocean Strategy Blue ocean strategy was coined by professors W. Chan Kim and Renee Mauborgne in their book “Blue Ocean Strategy: How to Create Uncontested Market Space and the Make Competition Irrelevant” (2005). Based on 15 years of research, the authors used 150 successful strategic moves spanning 120 years of business history and across 30 industries to bring the Blue Ocean Strategy theory to life. This strategy gives a new approach to the formation of new business strategies for all businesses. Blue ocean strategy is a way to make the competition irrelevant by creating a leap in value for both the company and its customers. Blue ocean strategy is to defined, in red oceans, existing industries and businesses, an unknown market space that has never been tapped by any player in the current industry. In Red oceans, competition is severe; existing players try to outperform their rivals by using Continue reading
Mass Customization – Dynamic Stability Product/Process Matrix
Mass Customization Concept “It is the customer who determines what a business is” – Drucker, 1954 The concept of mass customization was coined by Stan Davis in 1987, in his book “Future Perfect”. In this book, he emphasizes that in traditional industrial production there is on the one hand mass production, using economies of scale to produce goods at low costs, but with nearly no variety or on the other hand individual production with a high degree of variety but in small volumes with high costs. Joseph Pine, an IBM-executive turned consultant and author who is the father of the mass customization concept, in his 1993 book “Mass Customization — A New Frontier in Business Competition”, outlines more about Mass Customization. “developing, producing, marketing and delivering affordable goods, and services with enough variety and customization that nearly everyone finds exactly what they want.” – Joseph Pine, 1993 “Mass customization is a system Continue reading