Tribal Business Models

1. Refining Your
Business
Structure
Sub Header
Leonard Greenhalgh, PhD
Professor of Management
Director, Native American Business Programs
Tuck School of Business at Dartmouth

2. To recap: Becoming strategically focused
means developing sources of competitive advantage
Do it better
– Operational excellence strategy
Do it differently
– Differentiation strategy
Gain customer loyalty
– Customer relationship management
strategy

3. Excellent customer-oriented
firms…
have an operations strategy that is aligned
with their value proposition, their systems
and processes, and their structure, with
employees empowered to create
increasing customer value

4. For how long have people
been managing
organizations?

5. The Cottage Industry, 1612
(this is the original, co-located multi-functional team)
Grandmother
Husband
Son, 18
Daughter, 10
Son, 12
Wife
Customer
create value

6. What motivated them?
They had a local monopoly
But they didn’t exploit the situation;
they were customer-focused
•they charged reasonable prices
•they had an operations strategy that produced
the highest quality they were capable of
•they worked harder than they needed to

7. In 1612, such relationships
were preserved during growth
The same sense of commonwealth was
preserved at the value-chain level.
Let’s see how…

8. The textile enterprise grew through
outsourcing, with value-chain roles based
on core competency
Weaver Customer
Metalworker
Woodworker Fuel Supplier
Transportation Tailor
Embroiderer
Overcoat-Maker
Merchant
This is the original value chain:
It’s a communal organization
(a network of relationships)
Sheep-Raising
Sheep-Shearing
Wool-Spinning
Yarn-Dyeing

9. In 1862, the Industrial Revolution
produced advantages of superior
technology and scale of operations

10. The problem with scale was the lack of
experience in organizing a lot of people
(workers)
?
(owner)

11. The Western hierarchical
model was borrowed

12. The Military Hierarchy made
sense in past centuries
General
Officers
Rank & File

13. The borrowing produced the Western
classic organizational form
Top
Management
Middle
Management
Rank & File
Strategic Direction
Functional Implementation
 Plan
 Organize
 Direct
 Control
Functional
Tasks

14. Relationships that hadn’t been a
problem in the military
became a problem in Western industry

15. The Chain of Command Principle
made sense for the old military

16. But the Chain of Command Principle also
produces corporate “silos” or “stove-pipes”
S
A
L
E
S
Customer
push

17. Centuries ago, castes evolved in the military.
Why?

18. Military castes produced managerial castes

19. Castes and silos produce
The Fractionated Organization

20. Western hierarchical (“top-down”) organizations
that had prospered in the 20th Century
faced new challenges in the 21st Century

21. Western hierarchical (“top-down”) organizations
that had prospered in the 20th Century
faced new challenges in the 21st Century
•Information explosion

22. Western hierarchical (“top-down”) organizations
that had prospered in the 20th Century
faced new challenges in the 21st Century
•Information explosion
•Globalization

23. Western hierarchical (“top-down”) organizations
that had prospered in the 20th Century
faced new challenges in the 21st Century
•Information explosion
•Globalization
•Technology improvements

24. Western hierarchical (“top-down”) organizations
that had prospered in the 20th Century
faced new challenges in the 21st Century
•Information explosion
•Globalization
•Technology improvements
•Time-based competition

25. Western hierarchical (“top-down”) organizations
that had prospered in the 20th Century
faced new challenges in the 21st Century
•Information explosion
•Globalization
•Technology improvements
•Time-based competition
•Quality Revolution

26. Western hierarchical (“top-down”) organizations
that had prospered in the 20th Century
faced new challenges in the 21st Century
•Information explosion
•Globalization
•Technology improvements
•Time-based competition
•Quality Revolution
•Unprecedented competitors

27. Tasks within Core Organization
1. Identification of market opportunities
2. Selection of strategic relationship partners
3. Coordination of functions
Core
Organization
Customer
A new form of competitor-
The “Virtual” or Value-Integrator Organization of 2012
create value

28. Tasks within Core Organization
1. Identification of market opportunities
2. Selection of strategic relationship partners
3. Coordination of functions
Core
Organization
Call Center
Research & Design
Producer
Distribution
Financial
Services
Customer
A new form of competitor-
The “Virtual” or Value-Integrator Organization of 2012
create value

29. The Virtual Organization is an old form…
remember the original, co-located multi-functional team?
Grandmother
Husband
Son, 18
Daughter, 10
Son, 12
Wife
Customer
create value

30. True Joint Venture
(= a value-integrator organization)
JV
note: dotted line indicates ownership relationship;
solid line indicates strategic outsourcing relationship
Customer

31. Empowered Task Force
(Operates like a value-integrator organization)
Task
Force
Customer

32. How would you structure an
organization to handle a
series of projects?
--and what is
the role of management
in such organizations?

33. Growth is not for everyone
Large
Multi-
divisional
Holding
company
Small
Scale
of
Business
Entrepreneur
in the business
Delegated
management
Narrow BroadNiche

34. Key points to remember….
1. Different parts of the
organization need a structure
tailored to their roles
2. The structure is good when it:
--increases strategic alignment
--enhances relationships

35. Assignment:
 Design a perfect competitor for your
business
 What’s different from what you now
have in place?
 How can your present organization
be improved?
 Add items to your To-Do list