Organization Design

1. Role of Strategic
Direction in
Organization
Design
Name: Jesvanth
Reg No: RA1952001020020
Subject: Organisation Design
Course: MBA

2. Strategic Direction
Strategic Direction Meaning
Strategic direction” refers to the actions
you are taking to achieve the goals of your organizational
strategy”.
Strategic Direction Importance
A strategic direction within a department
or business as a whole allows you as a business owner or
manager to focus your employees on specific goals.

3. Role of Strategic Direction in
Organization Design

4. Effect of Strategies on Organizational
Design
 Low Cost Leadership: Mechanistic efficiency to
organizational design. Strong, centralized authority.
 Differentiation: Structure is fluid and flexible with strong
horizontal coordination. Employees are empowered to take
risks.
 Prospector: Similar to differentiation.
 Defender: Efficiency approach like low-cost leadership.
 Analyzer: Mixed of characteristics, fluid like its strategy.
 Reactor: No direction or clear approach to design.

5. Strategic Direction Mission
• The overall goal for an organization, the reason for its
existence.
• Also called official goals, the purpose is to communicate
to both internal and external stakeholders, what the
organization is trying to achieve.
• Also provides legitimacy to any potential stakeholders.

6. Porter’s Competitive Strategies
By adopting differentiation or low cost leadership
companies are more profitable and less vulnerable.
Companies that do neither underperform in the market.
◆ Differentiation: The Organization attempts to distinguish
it’s products or services from others in the industry. The
end goal is a unique product offering, often ignoring price
point.
Often focuses on innovation to keep competitive edge.
[Apple Computers, Trader Joe’s]

7. ◆ Low-Cost Leadership: Increase market share by keeping
costs low compared to competitors. Focuses on efficient
facilities, cost reductions, and production efficiently.
Focuses on stability and attempts to mitigate risk. [Wal
mart, Ryanair]
◆ Competitive Scope: Both broad and narrow scopes can
effectively target the market.
◆ Miles and Snow’s Strategy Typology: Organizations
strive for a fit among internal organization characteristics,
strategy, and the external environment. Having a clearly
defined competitive strategy is considered one of the
defining factors in an organizations’ success

8. Strategic Direction Effective
Develop a plan – involve your stakeholders in identifying
your future direction and critical success factors. You might
do this through phone surveys, focus groups and meetings
with your board.
State your commitment – make it clear that you are
committed to this process and offer opportunities for the
appropriate stakeholders to become involved and share
their passion for your success.
Develop broad goals – these are statements of desired
direction – key areas in which you want to experience
performance and change.

9. They need not be measurable but should lend themselves
easily to objective setting. Goals rarely change and may
succeed from one planning era to the next.
Develop specific, measurable objectives – these are
action statements that tell the reader what you want to
achieve. They should meet the SMART criteria:
Specific – they are tangible outcomes and real activities.
Measurable or Monitorable – can we tell if it has been
accomplished?
Achievable – can we really do it?
Realistic – should we really do it?
Time-bound – when could we either expect to see some
results or finally measure the result?

10. Tie to performance measurement– be aware of what
you are actually measuring. There are 3 types of
common measures found in strategic plans :
Output/Activities measures: monitor the tactics or
activities that you undertake.
Quality measures: monitor the short term, easily
applicable, positive indicators –timeliness, accessibility,
responsiveness, etc.
Outcome/Impact measures: monitor the big picture
results and are usually longer-term in their impact.
Keep the plan alive– hold regular meetings in which the
plan is the key topic of discussion. Once an objective is
met, set a new one.

11. Monitor, measure and motivate! Update and review
the plan at least quarterly. Encourage the use of the plan
in all areas of ‘business’. This plan has impacts for all of
our committees and leadership groups. Make sure that it
is seen as important, influential and positive.