The Internal environment
Situational factors
Balanced scorecard , aims to provide managers with clear measures that may track and also drive performance. It allows managers to look at the business from four crucial indications of current and future performance
What is organisational structure?
Organizing for change, creativity and innovation ,
Internal business perspective (what must we excel at), It is important for organisations to decide the processes and competencies they must excel at and provide measurements for each
Customer perspective (How do customers see us), Managers must identify the customer and market segments in which the company competes and clarify the appropriate measure of performance in these targeted segments
Innovation and learning perspective (can we continue to improve and create value), continuous improvements to existing products and/or processes as well as the introduction of entirely new products are an ongoing activity essential to company performance
Financial perspective (How do we look to shareholders), Define the long term objectives of the organsation
Chain of command, This refers to the formal lines of authority, which span different hierarchical levels, from top mgt to workplace employees, and aims to clarify who reports to whom in the work setting
Span of control , is the number of people reporting directly to a manager. Flat structure with a broad span of control, tall structure with a narrow span of control. Businesses have adopted a flatter structure in order to avoid the negatives which come with a tall structure......
Departmentalization , creates job activities, which must be grouped together so that common tasks can be coordinated. It can take place according to..
Centralization/decentralization , Centralization refers to the extent to which decisions are made at a single point in the organisation. it restricts channels of communication so hinders innovation. Decentralization occurs in firms where decision-making is devolved and where lower levels of the hierarchy are encouraged to provide input
Work specialization , is the degree to which a task is divided into separate jobs, it has been identified as a critical factor in determining employee productivity. Henry Ford first to break jobs down into their component parts then allocated workers who were required to perform specifc and repetitive tasks
Formulation , refers to the degree to which jobs within a firm are standardized through formal job descriptions, and the degree of attention available to employees in perusing activities and tasks. In formalized companies employees are excepted to abide by the rules follow a handbook, specified job descriptions.
Geography , where jobs are brought together around geographic location. Coca-Cola's structure reflects the companies operation in two broad areas, North American sector and the international sector
Process, where jobs are grouped based on process of customer flow. A patient preparing for an operation would go through tests then admitted, undergo surgery, receive postoperative care then be discharged
Product, where jobs are grouped around a particular product or service. Department stores, structures are based on varied product lines.
Distortion of information , Employees across different levels may either misunderstand information due to mixed messages or misinterpret the information altogether (sometimes to suit their own personal agendas)
Problems with motivation , Increasing the number of hierarchical levels reduces the span of control and authority exercised by managers, so they have less authority and likely to find their decisions constantly scrutinized by their superiors.
Organisational size , when organisations grow and become increasingly complex they tend to adopt structures that encourage effective coordination and control of a diverse range of operations and people
Environmental uncertainty , Tends to threaten the well-being of an organisation, very difficult to develop an organisational structure that supports firms strategy. Firms which choose to operate in uncertain industries adopt structure that endorse changes within the work setting
Structural forms , may adopt several structural forms to accommodate these situational variables
Traditional structures
Contemporary organisational structures
Functional structure , groups similar/related tasks into fictional areas based on domain expertise (Product, Accounting, Marketing, HR departments)
Divisional structures , is made up of several units such as product groups or geographic regions . Divides the firm into relevant divisions that are managed by a divisional manager who has authority over their unit.
Entrepreneurial structure , is simple, built around the founder/manager, who acts as an authority figure making most of the decision and runs the day-to day operations
Team-based structures, the entire team is responsible for the performance results of their designated area of operations, employees design the workflow as they think best
Matrix structure, emphasize coordination of specialists into project-oriented teams. Under these arrangements, people with individual accountability work on one or a number of projects lead by a project manager
Boundary-less organisation, is a structure which is not limited by boundaries between tasks and departments, involves greater collaboration across levels and departments in order to achieve the goals of the organisation
Systems, we need to look into the specific organizational systems that support and promote creativity at work
Resources , Proponents of the resource-based view (RBV) argue that the firms develops competitive advantage through its resource base . Four characteristics that are important for competitive advantage (Grant 1991).......
Organic structures , are better suited to rapidly changing external environments where innovation is perceived as a important factor in maintaining a form competitive advantage. Endorse more informal and participative interaction and communication
Mechanistic structures tend to be evident in environments that are stable. Are characterized by formal relationships and communication channels that operate on a hierarchical basis, based on rigid rules and procedures with formal chain of command
Goal setting and reward systems , organisations that manage creative people should (1), Define goals and objectives in broad terms, focusing more on the generation of ideas rather than their implementation, employees are given the opportunity to approach the problem unconventionally . (2) Focus on how work is carried out rather than on its outcomes. Concentrate on stratigies that are adopted by individuals while providing support so problems can be solved
Transparency , reflects the degree of difficulty others experience in determine the source of competitive advantage. Less transparency means more difficult to imitate
Transferability , relates to the ability to acquire a source of advantage once it has been identified. E.g. costs of relocating equipment and hiring highly specialized staff may put the company in a disadvantaged position against competitors
Durability, rate at which resources depreciate or become obsolete over time
Replicability, whether or not a competitor can reproduce the source of advantage