1. Organizational Structures CPTE 433 John Beckett

2. Sizing Base on business need Challenges: –Demonstrating need –Fractional people –Intra-unit communication overhead Adding more people doesn’t automatically mean more work gets done. –It does, however, require more structure –“Adding people to a late project makes it LATER” (Brooks)

3. Brooks’ Dilemma Contributions Horsepower Talent Fresh viewpoint Ability to focus on fewer tasks (less task-switching loss) Costs Orientation –Corporate culture –Local jargon –How your operations are set up Talents passed to others –That’s good but it isn’t free Interpersonal communication overhead Threat to existing people –Sabotage? Where to put them? Tools “Adding a person to a late project makes it later”

4. $ Centers Revenue: Brings in money from outside the company Cost: Serves revenue centers to make them more effective “Value:” Able to demonstrate quantitatively how you indirectly influence profits –Of course, everybody claims credit! “Value Center” is a term invented by John Beckett. Introduce it as a new concept to your business people.

5. Centralization/Decentralization Fundamental issue for designing your structure. Do you want like-minded people distributed where needed? –Perhaps forbidden to communicate –Low power Do you want them centralized? –Isolated from users –Unable to show cost-effectiveness –Able to leverage unique talents better

6. Tactical Answer Every method of organization has advantages and disadvantages. So… Capitalize on the advantages Mitigate the disadvantages Monitor for ways to improve

7. Connection to the Top The more you connect to the top of the organization, the more likely you are to be viewed as a strategic contributor to success. –And viewed as a competitor for resources. The less you connect to the top of the organization, the more likely you are to be viewed as a cost to be contained. All this is “vanity”, because it ignores the overall effectiveness of the organization!

8. Skill Tracks Organizational Specialists Use their management skills Technical Specialists Use their technical skills Use the skills of both types of people, and pay them accordingly. Sometimes technical specialists see organizational issues the manager types don’t see. Sometimes managerial types see technical issues techies don’t see.

9. Outsourcing Look for “core competence” of firm –Versus “generic competences” which are required of anybody to do the sort of business you do This is what makes your company better than the competition. It may be appropriate to outsource generic competencies. It is usually inappropriate to outsource core competences because: –You can do it better yourself –You don’t want others to capture it (which they’ll do if you specify it fully for an outsourcing firm) If organization is your core competence, maybe you will outsource everything other than organization.

10. Technology Treadmill Technology does not endow a company with a permanent advantage. This is because technology can be replicated. Culture  Process can be a permanent advantage because it is harder to replicate. Support functions should support the core competencies of the firm. –Perhaps support is itself a core competency! –Support the connections between core and outsourced efforts

11. “Best Practices” Advantage: You use what others have learned. Challenges –You don’t learn what others don’t teach. –You must integrate the knowledge with your environment and culture(s) Best practices are one dimension of improvement, but should not be an exclusive focus.

12. Consultants Can get you “up” quickly on new projects. Can get you dependent on them for continued support – becoming high-cost low-structure outsourcing. “Management consultants take information known internally and rearrange it so top management will be willing to accept it.” –Or rubber-stamps what upper management wants. –Response: Feed them well-reasoned arguments for what you see is the best alternative It may be a rare opportunity to “get through” to management

13. Is Money the Only Thing that Counts …Even in a non-profit? Money is easier to measure than other goals –It may be a useful indicator of accomplishment Money is an enabling factor –If you ignore it, you can’t do what you are there for A non-profit’s future is not as closely tied to money –We could raise more –Volunteerism among workers

14. Non-Profits Need “operating gain” to fund needed investments. Finance is a necessary dimension. Finance is not the primary goal. Finance is an enabling factor toward the primary goal. Sometimes finance “speaks” of the need to revise the primary goal. Case: March of Dimes

15. The Trend Was Vertically-integrated companies “Tall” structures Modest pay increase per level Competence focus Moving To Virtual firms composed of smaller companies Flatter structures Larger pay increase per level Project focus

16. Brand Equity A perception in the buyer’s mind that something with your brand on it is more valuable than something without your brand on it. Typical case: A “name brand” product that is a commodity, but which is priced higher. –Are they spending the extra money on nothing but advertising?

17. Brand Equity Cases Maytag “Lonely repairman” motif (premier product) Move toward out- sourcing Combination with other brands Focus on image Growing customer dissatisfaction Hewlett-Packard “Best of the Best” “Not Invented Here” syndrome –But: Laser Printers Move to profit focus Move toward out- sourcing “Can anybody save HP?” Brand Equity is hard to get, easy to lose, and can be very profitable.