ROLE OF STRATEGIC DIRECTION IN ORGANIZATION DESIGN

2.  Organizational design is a systematic approach to integrate and
align various elements like strategy, business model, systems,
structures, people and procedures to meet business objectives
 Top management decides and sets the goals and determine the
direction it will take to accomplish it. This process of setting new
strategic direction for the organisation brings a lot of
opportunities and threats for the management to deal with – for
which a careful SWOT analysis is required. There are certain
key areas which can assist in setting a new strategic direction
for an organisation including production, staff, customers,
systems, premises, quality and marketing. These areas should
be divided into different goals taking a SMART approach into
account; S – specific, M – measureable, A – achievable, R –
realistic, T – time based

3.  Once top management plans a new strategy, a careful analysis of
organisational internal strengths and weaknesses with external
opportunities and threats is performed.
 It is important to perform the analysis in accordance with
organisational design – learning organisation or efficiency
orientated organisation. The rationale behind putting focus on
organisational design is that all policies, procedures, internal and
external environmental needs are interlinked.
 A change in one may upset the entire setting for others. Further,
the choices top management make in setting a new strategy,
underlying goals and organisational design ultimately determines
organisational effectiveness.

4.  Choice of goals and strategy influences how an organization should
be designed.
 Organizational goal- a desired state of affairs that the org attempts
to reach. Organizational Purpose.
 Organizational purpose- may be referred to as the overall goal, or
mission. Different parts of org has different goals and objectives to
help meet the overall goal/ mission.
 Strategic Intent- All the organization energies and resources are
directed toward a focused, unifying, and compelling overall goal.
 Microsoft goal: to put a computer on every desk in every home.

5. Three Aspects Related To Strategic
Intent:
1)Mission (official goals)- overall goal of org. orgs
reason for exsistance.
2)Competitive Advantage- overall aim of strategic
intent
3)Core Competence- something the org does
especially well in comparison to its competitors

6.  Two models for formulating Strategies that provide a framework
for competitive action:
 1)Porters Competitive Strategies:
 A) Michael porter believes managers can make the org more
profitable and less vulnerable by adopting either a differentiation
strategy or low cost leadership strategy.
i) Differentiation-Org competes through the ability to offer unique
or distinctive P&S that can command a premium price
ii) Low-Cost Leadership- managers choose to compete using
lower costs
 B) Competitive Scope can Be Broad or Narrow
i) org can chose to compete in many markets or a specific market

7.  2)Miles and Snow strategy typology
A) Based on the idea that managers seek to formulate strategies that will be
congruent w/ the external environment (strategy considered one of defining
factors in org success)
B) 4 categories that can be developed
 1)Prospector strategy- to innovate, take risks, seek out new opportunities,
and grow. (NIKE, facebook, Google)
 2)Defender strategy- almost opposite of prospector. Strategy concerned
with stability or even retrenchment. (PARAMOUNT)
 3)Analyzer Strategy- tries to maintain a stable business while innovating on
the periphery. (AMAZON)
 4)Reactor Strategy- The reactor strategy is the least aggressive, and
organizations typically do not have any forward looking or
predictive strategy. ... Their strategies are enforced when they are required
to respond to changes in the market or other environmental factors.