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Design organizations


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Design organizations

  2. 2. WHAT IS ORGANIZATION? A social unit of people that is structured and managed to meet a need or to pursue collective goals. All organizations have a management structure that determines relationship between the different activities and the members, and subdivides and assigns roles, responsiblities, and authority to carry out different tasks. Organizations is used broadly to refer to an entire firm, as well as to just one part of it WHAT IS ORGANIZATION DESIGN? Organization design is the deliberate process of configuring structures, process, reward systems, and people practices to create an effective organizations capable of achieving the business strategy.
  3. 3. WHAT IS STRATEGY?  Strategy is a method or plan chosen to bring about desired future, such as achievement of a goal or solution to a problem.  The art and science of planning and marshalling resources for their most efficient and effective use. ( Business Dictionary)
  4. 4. A Frame Work For Decision Making Organization design is a decision making process with numerous steps and many choices to make.  Provides a common language for debating options and articulating why one choice is better than another in objectives, impersonal terms.  Forces design decision to be based on longer-term business strategy rather than the more immediate demands of people and politics  Provides a clear rationale for the choices considered and explanations of those choices as the basis for communication and succesful change management.  Allows decision makers to be able to evaluate outcomes, understand root causes, and make the right adjustments during implementation
  5. 5. Star model  Strategy  Strategy is a company formula’s for success  Organizational Capabilities  The unique combination of skills, processes, technologies, and human abilities that differentiate a company  Structure  The grouping activities to carry out the task at organization  Process  Decision making, role, power and authority  Rewards  Behavior that influenced the achievement of goal – motivation tolls  People  Skills and abilities of human resources needed by organization
  6. 6. STRATEGY  Strategy is a method or plan chosen to bring about desired future, such as achievement of a goal or solution to a problem.  Strategy is a company formula’s for success  Strategy it sets the organization’s direction and a encompasses the company’s vision and mission, as well as its short-and long-term goals.  The purpose of a strategy is to gain competitive advantage.  The ability to offer a customer better value through either lower prices or greater benefits and services than competitors can ( Porter, 1998).  Key words : Internal organizational capabilities.
  7. 7. Competitive advantage of Michael Porter  Cost leadership strategy  Goal : To offer products or services at the lowest cost in the industry  Differentiation strategy  Goal : To provide a variety of products, services, of features to consumers that competitors are not yet offering or are unable to offer  Innovation strategy  Goal : To offer new products or notably better  Operational Effectiveness strategy  Goal : To perform internal business activities better than competitors, making the company easier or more pleasurable to do business with than other market choices.
  8. 8. Porter Competitive Model Potential New Entrants Bargaining Power of Suppliers Intra-Industry Rivalry Strategic Business Unit Source: Michael E. Porter “Forces Governing Competition in Industry Harvard Business Review, Mar.-Apr. 1979 Bargaining Power of Buyers Substitute Products and Services Figure 3-1
  9. 9. Two Strategic Objectives  Create effective links with customers and suppliers  Create barriers to new entrants and substitute products
  10. 10. Primary and Supporting Strategies  Differentiation Strategy (Primary)  Low Cost Strategy (Primary)  Innovation (Supporting)  Growth (Supporting)  Alliance (Supporting)
  11. 11. Organizational Capabilities  Organizational Capabilities : The unique combination of skills, processes, technologies, and human abilities that differentiate a company.  Creating superior organizational capabilities in order to gain competitive advantage is the goal of organization design.  Organization design is the series of choices and decisions; in any decision-making-process, clear criteria serve the purpose of allowing alternatives to be avaluated agains agreed-on standards.
  12. 12. THE IMPLEMENTATION OF STRATEGIC (EXAMPLES) Procter & Gamble has not only a strong research arid development capacity but also the capability of bringing ideas to market The Campbell Soup Company does not necessarily make better soup than its competitors do. Instead, it creates innovative packaging and works effectively with retailers on displays that highlight the convenience of its product. Part of our success is owed to our ability to maintain such a high standard of quality and service over the years. Yet it is the strategic placement and easy availability of our vehicles that ultimately earn us the reputation as a most reliable transportation partner ( Blue Bird Taxi )
  13. 13. ORGANIZATION’S STRUCTURE  Functional Structure  Grouping of activities according to the functions of an enterprise, such as production, selling and financing  Product Structure  Grouping of activities according to products or product lines  Geographic Structure  Grouping of activities according to area or territory  Customer Structure  Grouping of activities according to that refflects a primary interest in customers  Matrix Structure  The combining of functional and project or product patterns of departmentation in the same organization structure
  14. 14. Functional Structure A functional structure is organized around major activity groups such as finance, human resources, research and development, manufacturing, and marketing. All employees in each function are managed together in order to promote sharing of knowledge and greater specialization
  15. 15. Product Structure Separating into product divisions brings three main advantages: Product development cycles can be compressed because all the employees focused on the product are housed together. Focusing more narrowly on one line of products can promote product improvements and innovations. New opportunities can be more easily puisued because of the autonomy afforded by the divisional structure. There is not the constraint of coordinating with other divisions.
  16. 16. Geographic Structure
  17. 17. Geographic Organizational Structure
  18. 18. Advantages & Disadvantages ( Management a Global Perspective : Heins Weihrich & Harold Koontz) Advantages Disadvantages  Places responsibility at a lower  Requires more persons with     level Places emphasis on local markets and problems Improves coordination in region Takes advantages faces communication with local interests Furnishes measurable training ground general managers general manager abilities  Trends to make maintenance of economical central services difficult and may require services such as personnel or purchasing at the regional level  Makes control more difficult for top management
  19. 19. Customer Structure
  20. 20. Advantages & Disadvantages ( Management a Global Perspective : Heins Weihrich & Harold Koontz) Advantages Disadvantages  Encourages focus of customer  May be difficult to coordinate needs  Gives customers the feeling that they have an understanding supplier (banker)  Develop expertress in customer area operations between competting customer demands  Requires managers and staff expert in customer’s problem  Customers group may not always be clearly defined (e.g. large corporate firm vs other corporate businesses)
  21. 21. Matrix Structure
  22. 22. Matrix Organization Structure
  23. 23. Matrix Organization Structure
  24. 24. If your company is facing serious problems WHAT ARE YOU DOING? WHICH ONE .... should be changed? STRATEGY OR ORGANIZATION?
  25. 25. Conclusion 1. 2. 3. 4. 5. 6. 7. Decisions in formulating organizational design should be based on longterm business strategy of the organization Model star ( star model) is a tool that is recommended Amy Kates and Jay R. Galbraith to face critical challenges in the design of the organization Fundamental reasons to execute an appropriate strategy of organizations required, to achieve organizational goals required a good strategy and proper . Strategy is an organizational tool to achieve success through the organization's capabilities to gain a the competive advantage. Organizational design goal was to create an organization's ability to gain a competitive advantage, while the ability of the organization is a unique combination of skills and integrated, process and human resource capability of the organization. To organize or manage , share tasks and responsibilities within organization, a structured organization established, based on the shape function , product , geography , customer and combined them , can also form a matrix or project Choice of organizational form is based inter alia on the size of the organization, the extent of product, marketing, target market and market segmentation.
  26. 26. Awareness of competitive forces can help a company stake out a position in its industry that is less vulnerable to attack. Michael E. Porter Competitive Strategy
  27. 27. CORPORATE STRATEGY AND STRUCTURE, Historical Perspektive, Chapter Two SOURCES : ALIGNMENT Roberts. Kaplan David P. Norton OLEH : ALHADI BROTO MUDJIANTO CLARA
  28. 28. The Second Industrial Revolution, starting in the middle of the nineteenth century, saw the growth of much more complex capital-intensive industries, such as primary and fabricated metals, chemicals, petroleum, machinery, and transportation equipment. The Simple Dan Small Organization The Centralized Functional Organization An- Example of Multifunctional (M-Funct) Structure
  29. 29. As centralized functionally organized companies expanded and diversified  Some acquired competitors through horizontal combinations.  Several, such as Ford Motor, undertook vertical integration to better coordinate the flow of materials into and out of factories.  Most companies expanded geographically so that they could leverage their physical and organizational economies of scale in their domestic markets to reach customers in more distant markets Companies such as DuPont, General Motors, General Electric, and Matsushita The Multidivisional Structure THE ENCOUNTERED NEW PROBLEM • Coordination and handoffs between departments were often inefficient, costly, and time-consuming. • The lack of shared information among marketing specialists and salespeople (who dealt with customers), engineers (who designed new products and services), and operating people (who built the products and provided the services) often led to expensively designed products and services that were costly to manufacture and deliver and didn't meet customers' expectations and needs. • Functional organizations typically were also slow to respond to changes in customer preferences and new opportunities or threats in the marketplace. • Alfred Chandler summarized the problems faced by these centralized, functional organizations:
  30. 30. Stuktur Organisasi - Fungsional CEO Engineering Production Personel Keunggulan Strategik Finance and Accounting Marketing Kelemahan Strategik 1. Efisiensi - Spesialisasi Persaingan / konflik antar fungsi 2. Keahlian fungsional Kesulitan dalam koordinasi dan pengambilan keputusan antar fungsi 3. Delegasi keputusan operasional Membatasi pengembangan manajer umum 4. Kendali pusat atas keputusan strategik Prioritas pada bidang fungsional 5. Strategi melalui kegiatan kunci unit
  31. 31.  Struktur Organisasi Fungsional CEO Engineering Production Personel Finance and Accounting Marketing  Struktur Organisasi Fungsional - Proses CEO Purcha Receiving and Inventory Order Entry Wholesale Sales Retail Sales Accounting and Billing Customer Service
  32. 32. Struktur Organisasi Geografis CEO General Manager – Western District General Manager – Southern District General Manager - Central District Finance/ Accounting Marketing R&D HRD General Manager - Northern District General Manager – Eastern Finance/ District Accounting Marketing R&D HRD Engineering Production Marketing
  33. 33. Keunggulan Strategik Kelemahan Strategik 1. Memungkinkan penyesuaian strategi terhadap kebutuhan setiap pasar geografis Menimbulkan kesulitan bagi kantor pusat mengenai keseragaman geografis atau keragaman geografis 2. Delegasi tanggung jawab laba/ rugi ke jenjang strategik terendah Lebih menyulitkan dalam menjaga konsistensi citra/reputasi perusahaan dari daerah ke daerah 3. Meningkatkan koordinasi fungsional di pasar sasaran Menambah lapisan manajemen yang mengelola unit geografis 4. Memanfaatkan skala ekonomis operasi lokal Dapat menyebabkan duplikasi pekerjaan staf di kantor dan distrik 5. Memberikan landasan pelatihan yang baik bagi manajer umum ke tingkat yang lebih tinggi
  34. 34. Struktur Organisasi Divisi Vice President - Administrative Services - Operating Support CEO General Manager – Division A Marketi ng Product ion Accoun ting General Manager – Division B Marketi ng Product ion General Manager – Division C Accoun ting Product ion Marketi ng Accoun ting
  35. 35. Keunggulan Strategik Kelemahan Strategik 1. Mendorong koordinasi dan wewenang yang diperlukan ke tingkat yang sesuai demi ketanggapan yang cepat Memupuk persaingan tidak sehat 2. Menempatkan pengembangan dan implementasi startegi dekat dengan lingkungan yang khas dari divisi yang bersangkutan Menimbulkan masalah mengenai seberapa besar wewenang yang harus diberikan kepada manajer divisi 3. Membebaskan CEO untuk melakukan pengambilan keputusaan yang lebih luas Menimbulkan kemungkinan tidak konsistennya kebijakan di antara divisi 4. Secara tajam memusatkan tanggung jawab atas kinerja Menimbulkan masalah pendistribusian biaya overhead korporat yang dapat diterima oleh para manajer yang bertanggung jawab atas laba 5. Mempertahankan spesialisasi fungsional dalam masing-masing divisi 6. Memberikan landasan pelatihan yang baik bagi para manajer strategik
  36. 36. Struktur Organisasi Unit Usaha Strategik CEO Group Vice President SBU 1 Division A Division B Vice President - Administrative Services - Operating Support Group Vice President SBU 2 Division C Division D Division E Group Vice President SBU 3 Division F Division G Division H
  37. 37. Keunggulan Strategik Kelemahan Strategik 1. Meningkatkan koordinasi antara Membentuk lapisan manajemen baru divisi yang mempunyai masalah di antara divisi dan manajemen strategik serupa dan menghadapi korporat lingkungan produk-pasar yang sama 2. Mengetatkan manajemen dan pengendalian strategik dari perusahaan yang bisnisnya beragam Dapat menimbulkan persaingan tak sehat memperebutkan sumber daya korporat 3. Memudahkan perencanaan bisnis Dapat menimbulkan kesulitan dalam yang mendalam di tingkat korporat dan mendefinisikan peran wakil presiden bisnis grup 4. Menyalurkan tanggung jawab ke berbagai unit usaha yang berbeda Dapat menimbulkan kesulitan dalam menetapkan berapa besar otonomi yang harus diesarhkan kepada wakil presiden grup dan manajer divisi
  38. 38. Struktur Organisasi Matriks CEO Vice President Engineering Vice President Production Vice President Purchasing Vice President Administration Project Manager A Engineering Staff Production Staff Purchasing Agent Administrati on Coordinator Project Manager B Engineering Staff Production Staff Purchasing Agent Administratio n Coordinator Engineering Staff Production Staff Purchasing Agent Administratio n Coordinator Project Manager C
  39. 39. Keunggulan Strategik Kelemahan Strategik 1. Mengakomodasi beragam kegiatan Dapat menimbulkan kebingungan dan bisnis yang berorientasi pada proyek kebijakan yang kontradiktif 2. Menyediakan dasar pelatihan manajemen untuk manajer strategik Menuntut koordinasi horisontal dan vertikal yang luar biasa 3. Memaksimalkan pemanfaatan manajer-manajer fungsional secara efisien Dapat menimbulkan lalu lintas informasi dan pelaporan yang berlebihan 4. Memupuk kreativitas dan banyak sumber keragaman Dapat memicu konflik dan kehilangan tanggung jawab 5. Memberikan kepada manajemen menengah kontak lebih luas dengan masalah-masalah strategik
  40. 40. Evaluasi Strategi dan Struktur (Chandler)  Unit Fungsional : Satu Lokasi, Satu Pabrik  Ekspansi Volume : kebutuhan administrasi  Ekspansi Geografis : banyak unit lapangan, lokasi berbeda, standar administrasi, spesialisasi, koordinasi  Integrasi Vertikal : banyak fungsi, arus informasi dan bahan, peramalan dan jadwal, koordinasi  Diversifikasi produk : industri lain, pengelolaan divisi produk, investasi modal, tanggung jawab, keputusan manajer umum, otonomi divisi, pengendalian internal
  41. 41. Larry Wrigley : 4 Strategi Pertumbuhan 1. 2. 3. 4. Bisnis produk tunggal  Struktur Fungsional Satu bisnis yang dominan, dengan satu bisnis menyumbang 70-95% penjualan  Struktur Fungsional di Bisnis dominan dan Struktur divisi di bisnis lainnya Bisnis terdiversifikasi terkait, berdasakan satu saluran distribusi / teknologi yang sama, dengan lebih dari 30% penjualan berasal dari luar bisnis utama Struktur Divisi Bisnis terdiversifikasi tak terkait, dengan lebih dari 30% penjualan berasal dari luar bisnis utama  Struktur Diisi Semakin beragam perusahaan perlu divisionalisasi
  42. 42. Richars Rumelt Perusahaan produk tunggal / perusahaan bisnis dominan menggunakan struktur fungsional 2. Perusahaan dalam beberapa lini bisnis yang masih berkaitan hendaknya menggunakan struktur multi divisi 3. Perusahaan yang bergerak dalam beberapa lini bisnis yang tidak berkaitan hendaknya diorganisasi berdasarkan unit usaha strategik 4. Kesesuaian strategi-struktur yang dicapai secara dini dapat merupakan keunggulan bersaing. 1.
  43. 43. Tabel 13.1, Generic Strategy, Structure, And Control
  44. 44. Tabel 13.3, Coorporate Strategy And Structure and Control
  45. 45. BALANCED SCORECARD: SEBUAH SISTEM UNTUK MENYELARASKAN STRATEGI PERUSAHAAN DAN STRUKTUR Chandler's, Michael Porter, Goold, Campbell, and Alexander That strategy precedes structure and systems How Strategy Maps and the Balanced Scorecards align organization structure with corporate-level strategy BALANCED SCORECARD
  46. 46. Robert S. Kaplan Harvard Business School
  47. 47. What Is a Balanced Scorecard? A Measurement System? A Management System? A Management Philosophy?
  48. 48. Translating Vision and Strategy: Four Perspectives FINANCIAL Objectives “To succeed financially, ho w should we appear to our shareholders?” Measures Targets Initiatives CUSTOMER “To achieve our vision, how should we appear to our customers?” Objectives INTERNAL BUSINESS PROCESS Measures Targets Initiatives “To satisfy our Objectives shareholders and customers, wh at business processes must we excel at?” Vision and Strategy LEARNING AND GROWTH “To achieve our vision, how will we sustain our ability to change and improve?” Objectives Measures Targets Initiatives Measures Targets Initiatives
  49. 49. The Balanced Scorecard Focuses on Factors that Create Long-Term Value  Traditional financial reports look backward  Reflect only the past: spending incurred and revenues earned  Do not measure creation or destruction of future economic value  The Balanced Scorecard identifies the factors that create long-term economic value in an organization, for example:  Customer Focus: satisfy, retain and acquire customers in targeted segments  Business Processes: deliver the value proposition to targeted customers    innovative products and services high-quality, flexible, and responsive operating processes excellent post-sales support  Organizational Learning & Growth:    develop skilled, motivated employees; provide access to strategic information align individuals and teams to business unit objectives . Customers Processes People
  50. 50. The four Balanced Scorecard perspectives provide a natural way to categorize the various types of enterprise value propositions that can contribute to corporate synergies: Sinergi Keuangan: • Efektif memperoleh dan mengintegrasikan perusahaan lain. • Menjaga baik pemantauan dan pemerintahan proses di berbagai perusahaan. • Memanfaatkan merek umum (Disney, Virgin) di beberapa unit bisnis. • Achieving skala atau keterampilan khusus dalam negosiasi dengan entitas eksternal seperti pemerintah, Serikat pekerja, penyedia modal dan pemasok. Sinergi Pelanggan: • Secara konsisten memberikan proposisi nilai yang umum di seluruh jaringan geografis tersebar eceran atau Grosir outlet. • Memanfaatkan pelanggan umum dengan menggabungkan produk atau jasa dari beberapa unit untuk memberikan keuntungan yang berbeda: rendah biaya, kenyamanan atau solusi yang disesuaikan.
  51. 51. Sinergi Proses Bisnis : • • Exploiting kompetensi inti yang memanfaatkan keunggulan dalam teknologi produk atau proses yang melintasi beberapa unit bisnis. mempertimbangkan kompetensi dalam fabrikasi mikroelektronika, Optoelektronik, pengembangan perangkat lunak, pengembangan produk baru, dan just-in-time sistem produksi dan distribusi yang mengarah pada keunggulan kompetitif dalam beberapa segmen industri. Kompetensi inti juga dapat mencakup pengetahuan bagaimana untuk beroperasi secara efektif khususnya wilayah di dunia. Achieving skala ekonomi melalui bersama manufaktur, penelitian, distribusi, atau pemasaran sumber daya. Sinergi belajar dan pertumbuhan • • • Meningkatkan sumber daya manusia melalui perekrutan sumber daya manusia yang baik, pelatihan dan praktek pengembangan kepemimpinan di beberapa unit bisnis. Memanfaatkan teknologi umum, seperti industri terkemuka platform atau saluran bagi pelanggan untuk mengakses serangkaian luas layanan perusahaan, yang dibagi pada beberapa divisi produk dan layanan. Berbagi kemampuan pelatihan terbaik melalui manajemen pengetahuan bahwa proses transfer keunggulan kualitas di beberapa unit bisnis.
  52. 52. THANK YOU