1) Strategic direction and goal setting by top management shapes how organizations are designed. Managers determine goals, strategies, and designs to adapt to changing environments. 2) Organizational strategies like low-cost leadership and differentiation influence organizational design, with the former favoring mechanistic structures and the latter favoring flexible structures. 3) Miles and Snow's typology describes four strategies - prospector, defender, analyzer, and reactor - that each align with different organizational designs depending on the strategy's focus on stability, innovation, or responding to threats.

1. THE ROLE OF STRATEGIC DIRECTION IN ORGANIZATION
DESIGN
ASSIGNMENT 1
Submitted By:
Anshuman Singh
RA1952001020014
MBA ‘A’

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Strategy, Organization Design, and Effectiveness
One of manager’s primary
responsibilities is to potion their
organizations for success by
creating goals and strategies
that can keep the organization
competitive.
Text example: Instagram’s’
Director of Operations who
wanted to monetize new users
without alienating current users.

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Roles of Strategic Direction in Organizational Design
An organizational goal is a desired state of affairs that the organization attempts to reach. Top
managers give direction to organizations; this direction alters how organizations should be
designed.
Top management’s primary responsibility: determine an organizations goals, strategy, and
design, thereby adapting the organization to a changing environment.
Direction (Goal setting Process)
1) Assessment of Opportunities and Threats (Both internal and external environments).
2) 2) Define Strategic Intent: Overall mission/goals fit to the previous environmental
assessments. A. Formulate Specific Operational Goals: How to accomplish overall
mission.
3) 3) Organizational Design: Design the Organization to achieve these specific goals.
4) 4) Effectiveness / Outcomes : Measure results and feed back into the international
situation analysis.

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Organizational Purpose: Organizations exist for a purpose.
➢ Strategic Intent:
Means that all the organizations energies and resources and directed towards a focused, unifying, and
compelling overall goals. [Microsoft’s early goal: “Put a computer on every desk in every home”]
✧ 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.
✧ Competitive Advantage:
Refers to what sets the organization apart from other and provides it with a distinctive edge for meeting customer
or client needs in the marketplace. Apple’s Competitive advantage is its brand recognition and simplicity.
◆ Competitive Openings:
Any opportunity to gain to upper hand in the industry. If the market is an ocean, where is the best place to fish?
→ Red Ocean : Companies compete against each other is crowded spaces.
→ Blue Ocean : Companies find empty spaces that their company can fill. [Nintendo Wii targeted the general
audience].
✧ Core Competence: Something the organization does especially wellin comparison to its competitors.
Examples include: superior RD, excellent customer service, or manufacturing efficiency. [Amazon’s CC is fast
shipping]

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7. zOperating Goals
Designate the ends sought through the actual operating procedures of the organization and explain what the organization
is actually trying to do. They describe specific measurable outcomes and are often concerned with the short run.
[Performance goals, resource goals, market goals, employee development goals, market goals, etc.
✧ Overall Performance
◆ Profitability reflects the overall performance of “For-Profit” organizations. → Growth: increases in sales or profits over
time.→ Volume pertains to total sales of the amount delivered.
◆ Other Metrics: NGOs and similar organizations have goals that specify the delivery of services to clients or members.
Some will also use growth.
✧ Resource Goals: Pertain to the acquisition of needed material and financial resources from the environment. [Walmart
wants to hire every veteran who wants a job. Starbucks partnered with India’s Tatagroup to acquire Arabica coffee
beans].✧ Market: The market share of market standing desired by the organization. Primarily the responsibility of
marketing and sales. [L’Oreal wants to double its current clientele, adding a billion consumers by 2020.]
✧ Employee Development: Pertains to the training, growth, and safetyof employees, both managers and workers [Merryl
Lynch Junior partners should work on a wide variety of assignments for their development].
✧ Productivity: Concerned with the amount of output achieved from available resources. Normally stated as “cost per unit
of production /units produced per employee.” [Illumination entertainment uses productivity goals to make animated films
at half the price of larger studios.]
✧ Innovation and Change: Pertain to the internal flexibility and readiness to adapt to unexpected changes in the
environment. Oftendefined in relation to development of new products and services. [P&G made a goal of getting 50% of
their innovation from collaboration.] Can’t just focus on profit, innovation is also key

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 Goal Conflict and the Hybrid Organization often have
multiple simultaneous goals. Sometimes these goals
conflict with each other. [Bloomberg accurately reported
Chinese news, and their data terminal sales dropped.]
 ✧ Hybrid Organization: an organization that mixes value
systems and behaviors that represent two different sectors
of society, which leads to tensions or conflicts. These goals
can be mutually exclusive, so managers have to negotiate
on direction.
 ◆ Coalitional Management: Building an alliance of people
who support a manager’s goals and can influence others to
accept and work towards them.
 ✧ Goal Importance Goals help define the appropriate
decision concerning organization structure, innovation,
employee welfare, or growth. They also set a standard for
performance.
 ◆ Official Goals : describe a value system, and set an
overall purpose and vision for the organization. They also
legitimize the organization.
 ◆ Operating Goals : serve several specific purposes.→
Provide a sense of direction for employees. → Motivate
employees toward specific outcomes.→ [If Change.org met
all three quarter goals, they could bet 50$ on horse races.

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Porter’s Competitive Strategies
A strategy is a plan for interacting with the competitive environment to achieve
organizational goals. Goals define where an organization wants to go, strategies
define how it will get there.
✧ 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]
◆ Low-Cost Leadership: Increase market share by keeping cost slow compared to
competitors. Focuses on efficient facilities, cost reductions, and production efficiently.
Focuses on stability and attempts to mitigate risk. [Walmart, Ryanair]
◆ Competitive Scope: Both broad and narrow scopes can effectively target the
market

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Miles and Snow’s Strategy Typology
 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.
 Miles and Snow’s Strategy Typology Four Strategies;
 → The Prospector: Innovate, take risks, seek out opportunities and grow. Best
suited a dynamic, growing environment, focused on creativity.
[Nike/Google/Facebook]→ The Defender: Focuses on stability or even
entrenchment. Hold onto current customers by producing reliable, high-quality
products. Best in a stable environment. [Paramount Pictures makes reliable hits,
not blockbusters.]
 → The Analyzer: Maintain a stable business while innovating on the side. Some
products target stable environments, other target dynamic environments where
grow is possible. [Amazon]
 → The Reactor: Not really a strategy. Responds to threats in an Adhoc fashion, by
resolving immediate needs. Long-term goal management isn’t a focus. Rarely
successful, often prompts failure [Barnes and Noble iPad clone]

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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.
 ✧ Other Contingency Factors Affecting Design
 ◆ Strategy: Mechanistic vs. Organic
 ◆ Environment: Stable vs. Rapidly Changing
 ◆ Size/Life cycle: Small vs. Large.
 ◆ Technology: Production vs Creative Production
 ◆ Organizational culture: Strict vs. Free