This is a stem education course, this is due within 10 hours! mu

**This is a STEM Education Course, this is due within 10
hours! Must use original work and cite work using APA Style
Formatting.***
Directions: Please answer the Discussion Questions in 150
words each (must cite references). Answer the response
questions in 100 words.
Discussion Question 1: How have you used feedback from
assessments to improve future achievement? How can you use
this understanding to help your students monitor their progress
in a way that leads to academic success?
Discussion Question 2: How will you collaborate and show
compassion and concern for and with families of a student who
has accommodations to make sure they feel listened to,
supported, and guided in this process?
Response
Jill Wrote:
As I reflect upon feedback that I have personally received from
past classes and course work, I have learned to not attach self-
worth to criticism or critique. I must view the feedback as ways
to improve and learn rather than a negative. Demonstrating and
vocalizing this growth mindset is an important skill that we, as
educators, can instill in our students (and work on ourselves).
Seeing our academic learning as a journey rather than a “right
or wrong” experience. I have found myself telling my students
that if they already knew everything, they wouldn’t need to
attend classes. See each day as an opportunity to learn and
improve should be the cornerstone of the educational
experience.
Molly Wrote:

For me, feedback from assessments has reinforced what I am
currently doing well while providing a catalyst for any changes
needed to do things better. Feedback has improved future
achievement for me by providing a foundation for goal-setting.
If I can improve on something, appropriate and positive
feedback will point me in the direction of growth. I am
fortunate to have had excellent supervisors, mentors and
teachers who have supported my growth and development with
healthy feedback.
I can apply these experiences to help my students in the same
way. I can provide meaningful, supportive and healthy
feedback in ways that push them to set goals for themselves to
succeed academically. I also can encourage them to take more
personal ownership in the learning process by allowing them
opportunities for self-assessment and for tracking their own
data (Li, 2017). The more involved students are in their
learning, the more confident they will be. Student confidence
supports goal achievement and academic success.
Jill Wrote:
Clear communication and the demonstration of empathy are
vital to creating and fostering positive relations with students
and parents/guardians. The article “20 Tips for Developing
Positive Relationships with Parents”, provides numerous tips
and reminders in order to foster these foundations of
parent/teacher relationships. Of these tips, a few really spoke to
me, and I hope to incorporate them in future parent/guardian
interactions. Declaring the intention to work with them and
their student which set the stage for all future meetings. I will
work to always lead with positives from the classroom
concerning their student and to communicate early and often
(Aguilar, 2011). In order to ensure that parents are feeling
valued and heard, I will ask them for input and to assist in make
some instructional decisions. The article also promotes sharing
successes with parents in a timely manner. These successes may
include academic or social achievements. It is so very important
that parents hear a well-rounded recap of their student’s

classroom and learning experience. In the end, I feel that it is at
times, more important to listen rather than to speak.
6 Organization Structure
and Management
Systems: The
Fundamentals of
Strategy Implementation
Ultimately, there may be no long-term sustainable advantage
other than the ability to
organize and manage.
—JAY GALBRAITH AND ED LAWLER
I’d rather have first-rate execution and second-rate strategy
anytime than brilliant
ideas and mediocre management.
—JAMIE DIMON, CEO, JPMORGAN CHASE & CO.
Many people regard execution as detail work that’s beneath the
dignity of a business
leader. That’s wrong. To the contrary, it’s a leader’s most
important job.
—LARRY BOSSIDY, FORMER CEO, HONEYWELL
6
◆ Introduction and Objectives
◆ Strategy Formulation and Strategy Implementation

● The Strategic Planning System: Linking Strategy
to Action
◆ The Fundamentals of Organizing: Specialization,
Cooperation, and Coordination
● Specialization and Division of Labor
● The Cooperation Problem
● The Coordination Problem
◆ Developing Organizational Capability
● Processes
● Motivation
● Structure
◆ Organization Design
● The Role of Hierarchy
● Defining Organizational Units
● Alternative Structural Forms: Functional,
Multidivisional, Matrix
● Systems and Style: Mechanistic versus Organic
Organizational Forms
● Recent Trends in Organizational Design
◆ Summary

◆ Self-Study Questions
◆ Notes
O U T L I N E
132 PART II THE TOOLS OF STRATEGY ANALYSIS
Introduction and Objectives
We spend a lot of our time strategizing: pondering our next
career move, making plans for a vaca-
tion; thinking about how to improve our marketability. Most of
these strategies remain just wishful
thinking: if strategy is to yield results, it must be backed by
commitment and translated into action.
The challenges of strategy implementation are even greater for
organizations than for individuals.
Executing strategy requires the combined efforts of all the
members of the organization, many of whom
will have played no role in its formulation; others will find that
the strategy conflicts with their own
personal interests. Even without these impediments,
implementation tends to be neglected because
it requires commitment, persistence, and hard work. “How many
meetings have you attended where
people left without firm conclusions about who would do what
and when?” asks super-consultant,
Ram Charan.1
In this chapter, we consider some of the fundamentals of
strategy implementation. We begin by

clarifying the relationship between strategy formulation and
strategy implementation. If strategy
involves translating intention into action, the basic
organizational requirements are for coordination
and cooperation. We view organizational capability as the
mechanism through which coordination
and cooperation effectuate action. We disaggregate
organizational capability into four components:
resources, motivation, processes, and structure and go on to
explore the role of each of these in strategy
implementation.
This chapter introduces only the fundamentals of strategy
implementation. In subsequent chap-
ters, we shall consider strategy implementation in particular
contexts, such as strategic change
(Chapter 8), innovation (Chapter 9), mature industries
(Chapter 10), international business (Chapter 12),
multi business firms (Chapter 14), and mergers and
acquisitions (Chapter 15). At the same time, our
consideration of strategy implementation is limited: ultimately
strategy implementation embraces the
whole of management.
By the time you have completed this chapter, you will be able
to:
◆◆Understand the relationship between strategy formulation
and strategy implementation
and the role of strategic planning systems in linking strategy to
action.
◆◆Recognize the role of cooperation and coordination as the
basic requirements for organi-
zational effectiveness.

◆◆Appreciate the role that resources, processes, motivation,
and structure play in developing
organizational capabilities.
◆◆Select the organizational structure best suited to a
particular business context.
CHAPTER 6 ORGANIZATION STRUCTURE AND
MANAGEMENT SYSTEMS 133
Strategy Formulation and Strategy Implementation
The relationship between strategy formulation and strategy
implementation has long
been a contentious issue. During the early years of corporate
planning, strategy was
viewed as a two-stage process: first, formulation (mainly by top
management), then
implementation (mainly by middle management). This
conception was challenged by
Henry Mintzberg who envisaged strategy as emerging from the
interaction between
the formulation and implementation (see the discussion of “How
is Strategy Made? The
Strategy Process” in Chapter 1).2
From what we have learned about the nature of strategy, it is
clear that we cannot
separate strategic management into self-contained formulation
and implementation
stages. The intended strategy of any organization is inevitably
incomplete: it com-
prises goals, directions, and priorities, but it can never be
comprehensive. It is during

implementation that the gaps are filled in and, because
circumstances change, the
strategy adapts. Equally, strategy formulation must take account
of the conditions of
implementation. The observation “Great strategy; lousy
implementation” is typically a
misdiagnosis of strategic failure: a strategy which has been
formulated without taking
account of its ability to be implemented is a poorly formulated
strategy. Clearly, strategy
formulation and implementation are interdependent.
Nevertheless, the fact remains that
purposeful behavior requires that action must be preceded by
intention, and intention
needs to be preceded by thought.
The Strategic Planning System: Linking Strategy to Action
Our outline of the development of strategic management in
Chapter 1 (see “A Brief
History of Business Strategy”) indicated that companies adopted
corporate planning,
not to formulate strategy but to facilitate coordination and
control in increasingly large
and complex organizations.
Similarly with entrepreneurial start-ups, when Steve Jobs and
Steve Wozniak founded
Apple Computer at the beginning of 1977, strategy was
developed in their heads and
through their conversation. A written articulation of Apple’s
strategy did not appear
until they needed to write a business plan in order to attract
venture capital funding.3
However, Apple did not adopt a systematic strategic planning
process until several

years later when it needed to establish capital expenditure
budgets for its different
functions and product teams and link strategy to day-to-day
decision-making.
Thus, Mintzberg’s claim that formalized strategic planning is a
poor way to make
strategy, even if it is right, fails to recognize the real value
purpose of strategic planning
systems. As we shall see, strategic planning systems provide a
framework for the
strategy process which can assist in building consensus,
communicating the strategy
and its rationale throughout the organization, allocating
resources to support the
strategy, and establishing performance goals to guide and
motivate the individuals and
groups responsible for carrying out the strategy.
The Strategic Planning Cycle Most large companies have a
regular (normally
annual) strategic planning process that results in a document
that is endorsed by the
board of directors and provides a development plan for the
company for the next three
to five years. The strategic planning process is a systematized
approach that assem-
bles information, shares perceptions, conducts analysis, reaches
decisions, ensures
consistency among those decisions, and commits managers to
courses of action and

performance targets.
Strategic planning processes vary between organizations. At
some they are highly
centralized. Even after an entrepreneurial start-up has grown
into a large company,
strategy making may remain the preserve of the chief executive.
At MCI Communica-
tions, former CEO Orville Wright observed: “We do it strictly
top-down at MCI.”4 How-
ever, at most large companies, the strategic planning process
involves a combination of
top-down direction and bottom-up initiatives.5
Figure 6.1 shows a typical strategic planning cycle. The
principal stages are:
1 Setting the context: guidelines, forecasts, assumptions. The
CEO typically initiates
the process by indicating strategic priorities—these will be
influenced by the
outcome of the previous performance reviews. In addition, the
strategic planning
unit may provide assumptions or forecasts that offer a common
basis for strategic
planning by different units within the organization. For
example, the 2017–20
strategic plan of the Italian oil and gas company Eni was based
upon (a) the
goal of increasing free cash flow by expanding petroleum
production and selling
assets and (b) assumptions that the price of crude would rise to
$60 per barrel
and the dollar/euro exchange rate would appreciate to 1.20 by
2020.6

2 Business plans. On the basis of these priorities and planning
assumptions, the
different organizational units—product divisions, functional
departments, and
geographical units—create strategic plans that are then
presented for com-
ment and discussion to top management. This dialogue
represents a critically
important feature of the strategy system: it provides a process
for sharing
knowledge, communicating ideas, and reaching consensus. This
process may
be more important than the strategic plans that are created. As
General (later
President) Dwight Eisenhower observed: “Plans are worthless,
but planning is
everything.”7
Corporate
Guidelines
Draft
Business
Plans
Discussions
with
Corporate
Revised
Business
Plans

Approval
by
Board
Corporate
Plan
Capex
Budget
Performance
Targets
Operating Plan/
Operating Budget
Performance
Review
Forecasts/
Scenarios/
Planning
Assumptions
FIGURE 6.1 The generic annual strategic planning cycle
3 The corporate plan. Once agreed, the business plans are then
integrated
to create the corporate strategic plan that is then presented to

the board
for approval.
4 Capital expenditure budgets. Capital expenditure budgets link
strategy
to resource allocation. They are established through both top-
down and
bottom-up initiatives. When organizational units prepare their
business plans,
they will indicate the major projects they plan to undertake
during the stra-
tegic planning period and the capital expenditures involved.
When top
management aggregates business plans to create the corporate
plan, it estab-
lishes capital expenditure budgets both for the company as a
whole and for
the individual businesses. The businesses then submit capital
expenditure
requests for specific projects that are evaluated through
standard appraisal
methodologies, typically using discounted cash flow analysis.
Capital expen-
diture approvals take place at different levels of a company
according to
their size. Projects of up to $5 million might be approved by a
business
unit head; projects of up to $25 million might be approved by
divisional
top management; larger projects might need to be approved by
the top
management committee; the biggest projects may require
approval by the
board of directors.
5 Operational plans and performance targets. Implementing

strategy requires
breaking down strategic plans into a series of shorter-term plans
that pro-
vide a focus for action and a basis for performance monitoring.
At the basis
of the annual operating plan are a set of performance targets
derived from
the strategic plan. These performance targets are both financial
(sales growth,
margins, return on capital) and operational (inventory turns,
defect rates,
number of new outlets opened). In the section on “Setting
Performance Tar-
gets” in Chapter 2, I outlined the basic cascading logic for goal
setting: overall
goals of the organization are disaggregated into more specific
performance
goals as we move down the organization. As Chapter 2 shows,
this can use
either a simple financial disaggregation or the balanced
scorecard method-
ology. There is nothing new about this approach: management
by objectives
(the process of participative goal setting) was proposed by Peter
Drucker in
1954.8 Performance targets can be built into the annual
operating budget. The
operating budget is a pro forma profit-and-loss statement for the
company as
a whole and for individual divisions and business units for the
upcoming year.
It is usually divided into quarters and months to permit
continual monitoring
and the early identification of variances. The operating budget
is part fore-
cast and part target. Each business typically prepares an

operating budget for
the following year that is then discussed with the top
management committee
and, if acceptable, approved. In some organizations, the
budgeting process
is part of the strategic planning system: the operating budget is
the first year
of the strategic plans; in others, budgeting follows strategic
planning. Opera-
tional planning is more than setting performance targets and
agreeing budgets;
it also involves planning specific activities. As Bossidy and
Charan explain:
“An operating plan includes the programs your business is
going to complete
within one year ... Among these programs are product launches;
the marketing
plan; a sales plan that takes advantage of market opportunities;
a manufac-
turing plan that stipulates production outputs; and a
productivity plan that
improves efficiency.”9
The Fundamentals of Organizing: Specialization, Cooperation,
and Coordination
Translating intention into action requires organizing. To
understand what organizing
involves, we must understand why firms exist.
Specialization and Division of Labor

Firms exist because of their efficiency advantages in producing
goods and services that
results from the division of labor: each worker specializing in a
specific task. Consider
Adam Smith’s description of pin manufacture:
One man draws out the wire, another straightens it, a third cuts
it, a fourth points it, a
fifth grinds it at the top for receiving the head; to make the head
requires two or three
distinct operations; to put it on is a peculiar business, to whiten
the pins is another; it
is even a trade by itself to put them into the papers.10
Smith’s pin makers produced about 4800 pins per person each
day. “But if they had all
wrought separately and independently, and without any of them
having been educated
to this peculiar business, they certainly could not each have
made 20, perhaps not one
pin, in a day.”
However, specialization comes at a cost: dividing the
production process requires
integrating the separate efforts. This involves two problems:
first, the cooperation
problem, aligning the interests of individuals who have
divergent goals; second, the
coordination problem, even in the absence of goal conflict, how
do individuals harmo-
nize their separate efforts?
The Cooperation Problem
The economics literature analyzes cooperation problems arising
from goal misalign-

ment as the agency problem.11 An agency relationship exists
when one party (the
principal) contracts with another party (the agent) to act on
behalf of the principal. The
problem is ensuring that the agent acts in the principal’s
interest. Particular attention has
been given to agency problems arising between owners
(shareholders) and managers.
The central issue of corporate governance is ensuring that
managers act in the inter-
ests of shareholders. However, agency problems exist
throughout the entire hierarchy:
employees tend to pursue their own interests rather than those
of their organization.
Even organizational goals fragment as a result of specialization
as each department
creates its own subgoals. The classic conflicts are between
different functions: sales
wishes to please customers, production wishes to maximize
output, R & D wants to
introduce mind-blowing new products, while finance worries
about profit and loss.
Several mechanisms are available to management for achieving
goal alignment
within organizations:
● Control mechanisms typically operate through hierarchical
supervision: man-
agers supervise the behavior and performance of subordi nates
using positive
and negative incentives. The principal positive incentive is the
oppor-
tunity for promotion up the hierarchy; negative incentives are
dismissal
and demotion.

● Performance incentives link rewards to output: they include
piece rates for pro-
duction workers and profit bonuses for executives.
Performance-related incen-
tives have the advantages of being “high powered”—rewards are
directly related
to performance—and they avoid the need for costly monitoring
and supervision
of employees. Pay-for-performance is less effective when
employees work in
teams or where output is difficult to measure.
● Shared values. Some organizations achieve high levels of
cooperation and
low levels of goal conflict without resorting to either punitive
controls or
performance incentives. The members of churches, charities,
and voluntary
organizations often share values that support common purpose.
Similarly,
for business enterprises, as we saw in Chapter 2 (see pp. 52–
53), shared values
among members encourage the convergence of interests and
perceptions that
facilitate consensus and enhances performance.12 In doing so,
shared values
can act as a control mechanism that is an alternative to
bureaucratic control or
financial incentives. An organization’s values are one
component of its culture.

Strategy Capsule 6.1 discusses the role of organizational culture
in aligning
individual actions with company strategy.
● Persuasion. Implementing strategy requires leadership and at
the heart of lead-
ership is persuasion. J.-C. Spender argues that, language is
central, both to the
conceptualization of strategy and to its implementation.13
Leadership requires
influencing others, where rhetoric—the use of language for
persuasion—is a
core skill. Management rhetoric is not simply about
communicating strategy; it
involves changing the perceptions of organizational members,
their relationships
with the organization, and, ultimately, guiding their actions to
actualize the
strategy in the face of uncertainty and ambiguity.
The Coordination Problem
Willingness to cooperate is not enough to ensure that
organizational members integrate
their efforts—it is not a lack of a common goal that causes
Olympic relay teams to drop
the baton. Unless individuals can find ways of coordinating
their efforts, production
does not happen. As we shall see in our discussion of
organizational capabilities, the
exceptional performance of Disney theme parks, the Ferrari
Formula 1 pit crew, and
the US Marine Corps band derives less from the skills of the
individual members and
more from superb coordination among them.

Mechanisms for coordination include the following:
● Rules and directives: A basic feature of all firms is a general
employment
contract under which individuals agree to perform a range of
duties as required
by their employer. This allows managers to exercise authority
by means of
general rules (“Secret agents on overseas missions will have
essential expenses
reimbursed only on production of original receipts”) and
specific directives
(“Miss Moneypenny, show Mr Bond his new toothbrush with 4G
communica-
tion and a concealed death ray”).
● Mutual adjustment: The simplest form of coordination
involves the mutual
adjustment of individuals engaged in related tasks. In soccer or
doubles
tennis, players coordinate their actions spontaneously without
direction or
established routines. Such mutual adjustment occurs in
leaderless teams and
is especially suited to novel tasks where routinization is not
feasible.
● Routines: Where activities are performed repeatedly,
coordination becomes
routinized. As we shall see in more detail when we discuss
processes,
organizational routines are “regular and predictable sequences

of coordinated
actions by individuals” that provide the foundation of
organizational capability.
If organizations are to perform complex activities efficiently
and reliably, rules,
directives, and mutual adjustments are not enough—
coordination must become
embedded in routines.
STRATEGY CAPSULE 6.1
Organizational Culture as an Integrating Device
Corporate culture comprises the beliefs, values, and
behavioral norms of the company, which influence
how employees think and behave.a It is manifest in
symbols, ceremonies, social practices, rites, vocabulary,
and dress. While shared values are effective in aligning
the goals of organizational members, culture exercises
a wider influence on an organization’s capacity for pur-
poseful action. Organizational culture is a complex
phenomenon. It is shaped by the national and ethnic
cultures within which the firm is embedded and the
social and professional cultures of organizational mem-
bers. Most of all, it is a product of the organization’s his -

tory, especially the founder’s personality and beliefs: the
corporate culture of Walt Disney Company continues to
reflect the values, aspirations, and personal style of Walt
Disney. A corporate culture is seldom homogeneous:
different cultures coexist within different functions and
departments.
Culture can facilitate both cooperation and
coordination through fostering social norms and a sense
of identity. Cultures can also be divisive and dysfunc-
tional. At the British bank NatWest during the 1990s, John
Weeks identified a “culture of complaining” which was a
barrier to top-down strategy initiatives.b A culture may
support some types of corporate action but handicap
others. Lehman Brothers (whose collapse in September
2008 triggered the global financial crisis) was renowned
for its individualistic, entrepreneurial culture whose
downside was ineffective risk management. The culture
of the British Broadcasting Corporation reflects internal

politicization, professional values, and dedication to the
public good, but a lack of customer focus.c
Cultures take a long time to develop and cannot
easily be changed. As the external environment changes,
a highly effective culture may become dysfunctional. The
police forces of some US cities have developed cultures
of professionalism and militarism, which increased their
effectiveness in fighting crime, but led to isolation and
unresponsiveness to community needs.d
Despite its power in determining how an orga-
nization behaves, culture is far from being a flexible
management tool at the disposal of chief executives. It
is a property of the organization as a whole, which is not
amenable to manipulation. CEOs inherit rather than cre-
ate the culture of their organizations. The key issue is to
recognize the culture of the organization and to ensure
that structure and systems work with the culture and not
against it. Where strategy is aligned with organizational

culture, it can act as a control device and a source of flex-
ibility: when individuals internalize the goals and princi -
ples of the organization, they can be allowed to use their
initiative and creativity in their work.
Notes:
aE. H. Schein, “Organizational Culture,” American Psychologist
45
(1990): 109–119.
bJ. Weeks, Unpopular Culture: The Ritual of Complaint in a
British
Bank (Chicago: University of Chicago Press, 2004).
cT. Burns, The BBC: Public Institution and Private World
(London:
Macmillan, 1977).
d“Policing: Don’t Shoot,” Economist (December 13, 2014): 37.
The relative roles of these different coordination devices
depend on the types of
activity being performed and the intensity of collaboration
required. Rules are highly
efficient for activities where standardized outcomes are
required—most quality- control
procedures involve the application of simple rules. Routines are
essential for activ-
ities where close interdependence exists between individuals, be
the activity a basic

production task (supplying customers at Starbucks) or more
complex (performing
a heart bypass operation). Mutual adjustment works best for
nonstandardized tasks
(such as problem-solving), where those involved are well
informed of the actions of
their coworkers, either because they are in close visual contact
(a chef de cuisine and
her sous chefs) or because of information exchange (a design
team using interactive
CAD software).
Developing Organizational Capability
Translating strategy into action requires organizational
capability. Hence, the develop-
ment and deployment of organizational capabilities lies at the
core of strategy imple-
mentation. So far, we have said little about the determinants of
organizational capability
beyond recognizing that capabilities involve combining
resources to perform a task. Let
us look more closely at the structure of organizational
capability in the light of our pre-
ceding discussion of the fundamentals of organizing.
Capabilities require resources, and the level of capability
depends, to some degree,
upon the amount and quality of these resources. However, there
is more to capa-
bility than resources alone. In sport, all-star teams can be
beaten by teams that create
strong capabilities from modest resources. In 1992, the US
men’s Olympic basketball
team—the “Dream Team” that included Charles Barkley, Larry
Bird, Patrick Ewing,

Magic Johnson, Michael Jordan, Karl Malone, and Scottie
Pippen—lost to a team of
college players in one of their practice games. In Euro 2016, the
English soccer team,
with a market value of $810 million, was eliminated by Iceland,
a team valued at
$30 million. Similarly, in business: upstarts with modest
resources can outcompete
established giants—Dyson against Electrolux in domestic
appliances, ARM against Intel
in microprocessors, Spotify against Apple in streamed music.
Clearly, there is more to
organizational capability than just resources.
The effectiveness with which resources—people especially—are
integrated to cre-
ate capabilities depends upon three major factors: processes,
motivation, and structure.
These are depicted in Figure 6.2.
ORGANIZATIONAL
CAPABILITIES
RESOURCES
Motivation StructureProcesses
FIGURE 6.2 Integrating resources to build capability
Processes
The academic literature views organizational capability as based

upon organizational
routines—“regular and predictable behavioral patterns
[comprising] repetitive patterns
of activity” that determine what firms do, who they are, and
how they develop.14 Like
individual skills, organizational routines develop through
learning-by-doing—and, if
not used, they wither.
However, the academic literature’s emphasis on routines as an
emergent phenomenon
ignores the role of management. In practice, patterns of
coordination among organi-
zational members to undertake a productive task are planned by
managers who use
learning-before-doing as a vital preliminary to learning-by-
doing. For this reason, I
emphasize organizational processes over organizational
routines, where a process is
a coordinated sequence of actions through which specific
productive tasks are per-
formed. Not only is the term process well understood by
managers, but there are
established tools for their design, mapping, and development.15
Motivation
Processes provide the basis for team members to coordinate
their individual actions;
however, the effectiveness of the coordination depends upon the
extent of their
motivation. We discussed motivation in relation to the challenge
of aligning the goals
of individuals with those of the organization. Team motivation
is more complex: it
depends not only on each individual’s willingness to strive in

performing his/her
specific task but also on a willingness to subordinate
individuals to team goals. Despite
decades of research, the determinant of exceptional team
performance remains a
mystery—which is why outstandingly successful sports
coaches—Alex Ferguson,
Joe Gibbs, John Wooden, Scotty Bowman—command huge fees
on the corporate
lecture circuits.
Structure
The people and processes that contribute to an organizational
capability need to
be located within the same organizatio nal unit if they are to
coordinate effectively.
Processes that span internal organizational boundaries rarely
achieve high levels
of capability. Until the mid-1980s, European and US
automakers used a sequential
system of new product development which began in marketing
then went, in turn,
to styling, engineering, manufacturing, and …
Case 22
If a man could flow with the stream, grow with the way of
nature, he’d accomplish
more and he’d be happier doing it than bucking the flow of the
water.
—W. L. GORE

W. L. Gore &
Associates:
Rethinking
Management
Malcolm Gladwell (author of The Tipping Point and Outliers)
described his visit to
W. L. Gore & Associates (Gore) as follows:
When I visited a Gore associate named Bob Hen at one of the
company’s plants
in Delaware, I tried, unsuccessfully, to get him to tell me what
his position was.
I suspected, from the fact that he had been recommended to me,
that he was one of
the top executives. But his office wasn’t any bigger than anyone
else’s. His card just
called him an “associate.” He didn’t seem to have a secretary,
one that I could see
anyway. He wasn’t dressed any differently from anyone else,
and when I kept asking
the question again and again, all he finally said, with a big grin,
was, “I’m a meddler.”1
The absence of job titles and the lack of the normal symbols of
hierarchy are not
the only things that are different about Gore. Since its founding
in 1958, Gore has
deliberately adopted a system of management that contrasts
sharply with that of other
established corporations. While the styles of management of all
start-up companies
reflect the personality and values of their founders, the
remarkable thing about Gore is
that, as a $3.2 billion company with 9500 employees
(“associates”) in 25 countries of

the world, its organizational structure and management systems
continue to defy the
principles under which corporations of similar size and
complexity are managed.
The Founding of Gore
Wilbert L. (Bill) Gore left DuPont in 1958 after 17 years as a
research scientist. At
DuPont, Gore had been working on a new synthetic material
called polytetrafluoro-
ethylene (PTFE), which it had branded “Teflon.” Gore was
convinced that DuPont’s
commitment to supplying large industrial markets with basic
chemical products had
This case was prepared by Robert M. Grant. ©2019 Robert M.
Grant.
630 CASES TO ACCOMPANY CONTEMPORARY STRATEGY
ANALYSIS
caused it to overlook new applications for PTFE. When Bill
Gore and his wife, Vieve,
formed their own business in 1958, they were keen, not only to
explore these novel
applications, but also to create the energy and passion that he
had experienced when
working in small research teams at DuPont on those occasions
when they were given
the freedom to pursue innovation.
Working out of their home in Newark, Delaware, and with the
help of their

son, Bob, the Gores’ first product was Teflon-insulated cable.
However, their break-
through was Bob Gore’s discovery of the potential of Teflon to
be stretched and
laced with microscopic holes. The resulting fabric shed water
droplets but was also
breathable. Gore-Tex received a US patent in 1976. Not only
did it have a wide
range of applications for outdoor clothing, the fact that Gore-
Tex was chemically
inert and resistant to infection made it an excellent material for
medical applications
such as artificial arteries and intravenous bags. The potential to
vary the size of
the microscopic holes in Gore-Tex also made it ideal for a wide
range of filtration
applications.
Since then, continuous innovation has resulted in a growing
array of consumer prod-
ucts (such as guitar strings, dental floss, footwear components,
and vacuum cleaner
bags), industrial products (such as fuel cell components,
electronic components, fire
safety fabrics, and rope fibers), and medical products (such as
implantable medical
devices, pharmaceutical tubing products, and sealants).
Origins of the Gore Management Philosophy
FundingUniverse.com describes the development of Bill Gore’s
management ideas
as follows:
From their basement office, the Gores expanded into a separate
production facility in

their hometown of Newark, Delaware. Sales were brisk after
initial product introduc-
tions. By 1965, just seven years after the business had started,
Gore & Associates was
employing about 200 people. It was about that time that Gore
began to develop and
implement the unique management system and philosophy for
which his company
would become recognized. Gore noticed that as his company
had grown, efficiency
and productivity had started to decline. He needed a new
management structure, but
he feared that the popular pyramid management structure that
was in vogue at the
time suppressed the creativity and innovation that he valued so
greatly. Instead of
adopting the pyramid structure, Gore decided to create his own
system.
During World War II, while on a task force at DuPont, Gore had
learned of another
type of organizational structure called the lattice system, which
was developed to
enhance the ingenuity and overall performance of a group
working toward a goal.
It emphasized communication and cooperation rather than
hierarchy of authority.
Under the system that Gore developed, any person was allowed
to make a decision
as long as it was fair, encouraged others, and made a
commitment to the company.
Consultation was required only for decisions that could
potentially cause serious
damage to the enterprise. Furthermore, new associates joined
the company on the
same effective authority level as all the other workers,

including Bill and Vieve. There
were no titles or bosses, with only a few exceptions, all
commands were replaced by
personal commitments.
New employees started out working in an area best suited to
their talents, under the
guidance of a sponsor. As the employee progressed there came
more responsibility,
CASE 22 W. L. GORE & ASSOCIATES: REThINkING
MANAGEMENT 631
and workers were paid according to their individual
contribution. “Team members
know who is producing,” Bill explained in a February 1986
issue of the Phoenix
Business Journal. “They won’t put up with poor performance.
There is tremendous
peer pressure. You promote yourself by gaining knowledge and
working hard, every
day. There is no competition, except with yourself.” The effect
of the system was to
encourage workers to be creative, take risks, and perform at
their highest level.2
Bill Gore’s ideas about management were influenced by
Douglas McGregor’s The
Human Side of Enterprise, published when Gore was starting up
his own company.
In it, McGregor identifies two models of management: the
conventional model of
management, rooted in Taylor’s scientific management, and
Weber’s principles of

bureaucracy, which McGregor termed “Theory X.” At its core is
the assumption that
work is unpleasant, that employees are motivated only by
money, and that manage-
ment’s principal role is to prevent shirking. “Theory Y” was
McGregor’s alternative
theory rooted in the work of the human relations school of
management, which
assumes that individuals are self-motivated, anxious to solve
problems, and capable of
working harmoniously on joint tasks.
Bill Gore’s dominant concern was the limits to organizational
size. He believed that
the need for interpersonal trust would result in organizations
declining in effective-
ness once they reached about 200 members. Hence, in 1967,
rather than expand their
Delaware facility, Bill and Vieve decided to build a second
manufacturing facility in
Flagstaff, Arizona. From then on, Gore built a new facility each
time an existing unit
reached 200 associates.
According to Malcolm Gladwell, Gore’s insistence upon small
organizational units
is an application of a principle developed by anthropologist
Robin Dunbar. According
to Dunbar, social groups are limited by individuals’ capacity to
manage complex social
relationships. Among primates, the size of the typical social
group for a species is cor-
related with the size of the neocortex of that species’ brain. For
humans, Dunbar esti-
mates that 148 is the maximum number of individuals that a
person can comfortably

have social relations with. Across a range of different societies,
Dunbar found that 150
was the typical maximum size of tribes, religious groups, and
army units.3
Organization Structure and Management Principles
The Gore organization does include elements of hierarchy. For
example, as a corpo-
ration, it is legally required to have a board of directors —this is
chaired by Bob Gore.
There is also a CEO, Terri Kelly. The company is organized
into four divisions (fabrics,
medical, industrial, and electronic products), each with a
recognized “leader.” Within
these divisions there are specific business units, each based
upon a group of products.
There are also specialized, company-wide functions such as
human resources and
information technology.
What is lacking is a codified set of ranks and positions. Gore
associates are expected
to adapt their roles to match their skills and aptitudes. The basic
organizational units
are small, self-managing teams.
Relationships within teams and between teams are based upon
the concept of a
lattice rather than a conventional hierarchy. The idea of a lattice
is that every orga-
nizational member is connected to every other organiza tional
member within the
particular facility. In the lattice, communication is peer to peer,
not superior to sub-
ordinate. For Bill Gore, this was a more natural way to

organize. He observed that in
ANALYSIS
most formal organizations it was through informal connections
that things actually got
done: “Most of us delight in going around the formal procedures
and doing things the
straightforward and easy way.”4
New associates are assigned to a “sponsor” whose job is to
introduce the new hire
to the company and guide him or her through the lattice. The
new hire is likely to
spend time with several teams during the first few months of
employment. It is up
to the new associate and a team to find a good match. An
associate is free to find
EXHIBIT 1
What we believe
Founder Bill Gore built the company on a set of beliefs
and principles that guide us in the decisions we make,
in the work we do, and in our behavior toward others.
What we believe is the basis for our strong culture, which
connects Gore associates worldwide in a common bond.

FUNDAMENTAL BELIEFS
Belief in the individual: If you trust individuals and believe
in them, they will be motivated to do what’s right for
the company.
Power of small teams: Our lattice organization harnesses
the fast decision-making, diverse perspectives, and col-
laboration of small teams.
All in the same boat: All Gore associates are part owners of
the company through the associate stock plan. Not only
does this allow us to share in the risks and rewards of the
company, it gives us an added incentive to stay com-
mitted to its long-term success. As a result, we feel that
we are all in this effort together and believe we should
always consider what’s best for the company as a whole
when making decisions.
Long-term view: Our investment decisions are based on
long-term payoff and our fundamental beliefs are not
sacrificed for short-term gain.

GUIDING PRINCIPLES
◆ Freedom: the company was designed to be an orga-
nization in which associates can achieve their own
goals best by directing their efforts toward the suc-
cess of the corporation; action is prized; ideas are
encouraged; and making mistakes is viewed as part
of the creative process. We define freedom as being
empowered to encourage each other to grow in
knowledge, skill, scope of responsibility, and range
of activities. We believe that associates will exceed
expectations when given the freedom to do so.
◆ Fairness: everyone at Gore sincerely tries to be fair
with each other, our suppliers, our customers, and
anyone else with whom we do business.
◆ Commitment: we are not assigned tasks; rather, we
each make our own commitments and keep them.
◆ Waterline: everyone at Gore consults with other
associates before taking actions that might be

“below the waterline”—causing serious damage
to the company.
Working in Our Unique Culture
Our founder Bill Gore once said, “The objective of the
Enterprise is to make money and have fun doing so.” And
we still believe that, more than 50 years later.
Because we are all part owners of the company
through the associate stock plan, Gore associates expect
a lot from each other. Innovation and creativity; high
ethics and integrity; making commitments and standing
behind them. We work hard at living up to these expec-
tations as we strive for business success. But we also trust
MANAGEMENT 633
a new sponsor if desired. Typically, each associate works on
two or three different
project teams.
Annual reviews are peer based. Information is collected from at
least 20 other asso-
ciates. Each associate is then ranked against every other

associate within the unit in
terms of overall contribution. This ranking determines
compensation.
The company’s beliefs, management principles, and work
culture are articulated on
its website (Exhibit 1).
and respect each other and believe it’s important to cele-
brate success.
Gore is much less formal than most workplaces. Our
relationships with other associates are open and informal
and we strive to treat everyone respectfully and fairly. This
type of environment naturally promotes social interac-
tion and many associates have made lifelong friends with
those they met working at Gore.
Do Something You’re
Passionate About
At Gore, we believe it’s important to have passion for what
you do. If you’re passionate about your work, you are natu-
rally going to be highly self-motivated and focused. If you
feel pride and ownership, you will want to do whatever it
takes to be successful and have an impact. So when you

apply for an opportunity at Gore, be sure you’re going to
be passionate about the work you’ll be doing.
The Lattice Structure and Individual
Accountability
Gore’s unique “lattice” management structure, which illus-
trates a nonhierarchical system based on interconnec-
tion among associates, is free from traditional bosses and
managers. There is no assigned authority, and we become
leaders based on our ability to gain the respect of our
peers and to attract followers.
You will be responsible for managing your own work-
load and will be accountable to others on your team.
More importantly, only you can make a commitment to
do something (e.g., a task, a project, or a new role)—but
once you make a commitment, you will be expected
to meet it. A “core commitment” is your primary area of
concentration. You may take on additional commitments
depending on your interests, the company’s needs, and

your availability.
Relationships and Direct
Communication
Relationships are everything at Gore—relationships with
each other, with customers, with vendors and suppliers,
and with our surrounding communities. We encourage
people to build and maintain long-term relationships by
communicating directly. Of course, we all use e-mail, but
we find that face-to-face meetings and phone calls work
best when collaborating with others.
Sponsors
Everyone at Gore has a sponsor, who is committed to
helping you succeed. Sponsors are responsible for sup-
porting your growth, for providing good feedback on
your strengths and areas that offer opportunities for
development and for helping you connect with others in
the organization.
Source: www.gore.com/en_xx/careers/whoweare/about-gore.
html, W. L. Gore & Associates: Beliefs, Principles and Culture.
Reproduced by permission of W. L. Gore & Associates.

ANALYSIS
Leadership
Leadership is important at Gore, but the basic principle is that
of natural leadership:
“If you call a meeting and people show up—you’re a leader.”5
Teams can appoint
team leaders; they can also replace their team leaders. As a
result, every team leader’s
accountability is to the team. “Someone who is accustomed to
snapping their fingers
and having people respond will be frustrated,” says John
McMillan, a Gore associate.
“I snap my fingers and nobody will do anything. My job is to
acquire followership, artic-
ulate a goal and get there … and hope the rest of the people
think that makes sense.”6
CEO Terri Kelly compares the conventional approach to
leadership with Gore’s
“ distributed leadership model”:
The model of the single powerful leader who operates through
command and control
is attractive in its simplicity … In reality, it is impractical to
expect the single leader to
have all the answers, and history has shown that relying upon
rigid control mecha-
nisms will not prevent catastrophic outcomes. It’s far better to
rely upon a broad base
of individuals and leaders who share a common set of values

and feel personal own-
ership for the overall success of the organization. And as
organizations grow in size
and complexity, it becomes even more critical to distribute the
leadership load … The
capacity of the organization increases when it distributes the
leadership load to com-
petent leaders on the ground who can make the best knowledge-
based decisions.7
She argues that talented newcomers to the workforce adapt
much more easily to the
distributed leadership than to traditional modes of management.
Young people recog-
nize that they have choices, are not wedded to a single
organization, and will move to
where they perceive the best opportunities. As a result,
companies that persevere with
traditional management models will find it difficult to retain the
best talent. At the same
time, warns Kelly, making the shift to a distributed leadership
model is a challenge to
top management. It requires a fundamental change in the values,
attitudes, and reward
systems that are deeply embedded in most organizations:
It will require a shift within the organization from valuing a key
few to valuing the
unique contributions of many. Individuals will need to feel they
have a voice and can
be heard. Leaders will need to recognize that their primary role
is to empower others
versus build their own power. They will no longer stand behind
a title with assumed
authority to tell people what to do.

Leaders’ focus will shift to creating the right environment and
instilling the right values
that can enable capable leaders to emerge. They will recognize
that they are only
leaders if they have willing followers, and that this needs to be
earned every day.
Ultimately, their contributions will be judged by the people they
lead.
Most rewards systems depend upon higher level management to
assess the effec-
tiveness of the leader. This view can be somewhat limited and
biased by the fact the
managers were often the ones who put the leader in the role in
the first place. Those
who know their leaders best are typically the individuals they
lead. If you want indi-
viduals to have a voice in the organization, they must also have
a voice in selecting
and evaluating their leaders.
MANAGEMENT 635
In our company, we have found it very useful to adopt a peer
ranking system. All
associates get the opportunity to rank members of their team,
including their leaders.
They are asked to create a contribution list in rank order based
on who they believe
is making the greatest contribution to the success of the
enterprise. This approach
serves as an excellent form of “checks and balances” when it
comes to who is truly

recognized for their contributions as well as for overall
leadership.8
Innovation
The success of Gore’s unusual management system is its
capacity for innovation. Between
1976 and 2017, Gore received 1428 US patents; in each year
between 2012 and 2018 it
was awarded between 70 and 108 patents. Even more
remarkable has been its ability to
extend its existing technological breakthroughs to a wide
variety of new applications.
Central to Gore’s ability to innovate is its willingness to allow
individuals the freedom
to pursue their own projects: each associate is allowed a half
day each week of “dabble
time.” New product ideas typically originate with customers or
individual employees
and are then developed by a self-directed team. Gore’s Elixir
guitar strings began when
several amateur guitarists in the research department began
experimenting with differ-
ent coatings for guitar strings, then sent samples to musicians to
try.
The source of Gore’s innovations is not so much its brilliant
technologists and engi-
neers as a management system that attracts top talent and
provides an environment that
inspires creativity and collaboration. Gary Hamel closes his
discussion of Gore with the
following challenge:
Bill Gore was a 40-something chemical engineer when he laid
the foundations for his

innovation democracy. I don’t know about you, but a middle-
aged polytetrafluoro-
ethylene-loving chemist isn’t my mental image of a wild-eyed
management innovator.
Yet, think about how radical Gore’s vision must have seemed
back in 1958. Fifty years
later, postmodern management hipsters throw around terms like
complex adaptive
systems and self-organizing teams. Well, they’re only a half
century behind the curve.
So ask yourself, am I dreaming big enough yet? Would my
management innovation
agenda make Bill Gore proud?9
Notes
1. M. Gladwell, The Tipping Point (Little, Brown & Co.,
London, 2000).
2. “W. L. Gore & Associates, Inc. History,” http://www.fundin-
guniverse.com/company-histories/WL-Gore-amp;-Associ-
ates-Inc-Company-History.html, accessed July 20, 2015.
3. Gladwell, op. cit.: 177–181.
4. Quoted by G. Hamel with B. Breen, The Future of
Management (Harvard Business School Press, Boston, MA,
2007, p. 87).
5. Reprinted by permission of Harvard Business School
Press from The Future of Management by Gary Hamel.
Boston, MA, 2007, p. 100 Copyright © 2007 by the Harvard
Business School Publishing Corporation; all rights reserved.
6. “W. L. Gore & Associates, Inc.: Quality’s Different Drum-
mer,” IMPO Magazine, January 14, 2002, http://www.

impomag.com/articles/2002/01/wl-gore-associates-inc-
qualitys-different-drummer, accessed July 20, 2015.
7. Terri Kelly, “No More Heroes: Distributed Leadership,”
Management Innovation eXchange (April 8, 2010), http://
www.managementexchange.com/blog/no-more-heroes,
accessed July 20, 2015.
8. Ibid.
9. Reprinted by permission of Harvard Business School Press
from The Future of Management by Gary Hamel. Boston,
MA, 2007, p. 100. Copyright © 2007 by the Harvard
Business School Publishing Corporation; all rights reserved.
Organizational Implementation
This week, our focus is on organizational structure and strategy
implementation. For this critical thinking assignment, read the
case study, W.L. Gore (Gore) & Associates: Rethinking
Management (Case # 22) from your textbook. In addition, read
Chapter 6, “Organizational Structure and Management Systems:
The Fundamentals of Strategy Implementation.”
· Name and describe a typical company that is organized as a
hierarchy.
· Describe how the following are practiced at this company—
specialization, coordination, cooperation, and control.
· How does this company’s structure and management system
promote the effective implementation of the company’s
strategy?
· Describe how the following are practiced at Gore—
specialization, coordination, cooperation, and control.
· Given that typical control mechanisms are lacking at Gore,
how is the company able to effectively operate?
· How do Gore’s organizational structure and management
systems promote effective strategy implementation?

Your well-written paper should meet the following
requirements:
· 5 pages which does not include the required title and
reference pages.
· APA style.
· Support your submission with course material concepts,
principles, and theories from the textbook and at least two
scholarly, peer-reviewed journal articles unless the assignment
calls for more.
· Turnitin Originality Check REPORT REQUIRED.

This is a stem education course, this is due within 10 hours! mu

More Related Content

What's hot

Similar to This is a stem education course, this is due within 10 hours! mu

More from ojas18

Recently uploaded

This is a stem education course, this is due within 10 hours! mu