1. Strategy, Organization Design, and Effectiveness
Organization Theory and Design
Eleventh Edition
Richard L. Daft
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2. Strategy Direction and Organization Design
Organizational goal - a desired state of affairs that an organization attempts to reach
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3. Organizational Purpose
Strategic intent - organization’s energies and resources are directed toward a focused, unifying, and compelling goal
Operating Goals
Overall Performance
Resources
Market
Employee Development
Innovation and Change
Productivity
Mission
Competitive Advantage
Core Competence
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4. Mission Statement for Machias Savings Bank
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5. Organizational Operating Goals
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6. The Importance of Goals
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7. Operative goals – SMART
• Specific:
– Is the indicator specific and clear? Is it concrete?
• Measurable:
– Will you be able to collect the necessary information for this indicator? Is there a source for the information you need? Do you have the resources to collect the information or will it require too much time and skill to do so?
• Actionable:
– Would you be able to take action, if necessary, in response to the information that the indicator provides? Will the indicator tell you enough to make an informed decision?
• Relevant:
– Will the indicator give you information that is necessary for decision-making about your project/program, or will it give you information that is only “nice to know”?
• Timely:
– Will the indicator tell you what you need to know at the right time? Are the methods used to collect data for your indicator (e.g., median family income) done frequently enough to enable you to make timely decisions?

8. Selecting Strategy and Design
A strategy is a plan for interacting with the competitive environment
Managers must select specific strategy design
Models exist to aid in formulating strategy:
Porter’s Five Forces
Miles and Snow’s Strategy Typology
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9. Strategic planning
Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people.
techniques
– SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats )
– PEST analysis (Political, Economic, Social, and Technological analysis) or
– STEER analysis involving Socio-cultural, Technological, Economic, Ecological, and Regulatory factors and
– EPISTEL analysis (Environment, Political, Informatic, Social, Technological, Economic and Legal)

10. Porter’s Competitive Strategies
Differentiation strategy – to distinguish products or services from others in the industry
Low-Cost Leadership – increase market share by keeping costs low compared to competitors
Organizations may choose to focus broad or narrow in reaching multiple markets.
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11. Porter’s Competitive Strategies
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12. Miles and Snow’s Strategy Typology
Managers should seek to formulate strategy that matches the demands of the external environment
Prospector
Learning orientation; flexible, fluid, decentralized structure
Values creativity, risk-taking, and innovation
Defender
Efficiency orientation; centralized authority and tight cost control
Emphasis on production efficiency, low overhead
Analyzer
Balances efficiency and learning; tight cost control with flexibility and adaptability
Emphasis on creativity, research, risk-taking for innovation
Reactor
No clear organizational approach; design characteristics may shift abruptly depending on current needs
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13. How Strategy Affects Organization Design
Managers must design the organization to support the firm’s competitive strategy
Strategy impacts internal organization characteristics
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14. Organization Design Outcomes of Strategy
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15. Bindings between particular types of plans
Responsibility person
Mission (vision) of company
Shareholders of company,
top management
Strategically plan of company development
Long-term plans divisional or functional sections
Top management, manager of divisions and functional departments
Medium-term plans divisions and departments
Year plan of company
Top management, shareholders
Operational plan functional regions
Leaders of departments, leaders of working party, individuals

16. Contingency Factors Affecting Organization Design
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17. Assessing Organizational Effectiveness
Effectiveness takes into consideration a range of variables at both the organizational and departmental levels.
Efficiency relates to the working of the organization and amount of resources used to produce output.
Measuring Effectiveness:
The Goal Approach
The Resource-Based Approach
The Internal Process Approach
The Strategic Constituents Approach
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18. Indicators of Organizational Effectiveness
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19. Approaches to Measuring Organizational Effectiveness
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20. An Integrated Effectiveness Model
Competing values model tries to balance concern with various parts of the organization
The human relations emphasis incorporates the values of an internal focus and flexible structure
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21. Four Approaches to Effectiveness Values
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22. Effectiveness Values for Two Organizations
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23. Design Essentials Organization exist for a purpose
Strategic intent includes competitive advantage and core competence
Strategies may include many techniques
There are models to aid in the development of strategy
Organizational effectiveness must be assessed
No approach is suitable for every organization
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24. Year plan
Budget generally refers to a list of all planned expenses and revenues.
It is a plan for saving and spending.
The budget is compiled annually. A finished budget usually requires considerable effort and can be seen as a financial plan for the new financial year.

25. Year plan
Sales budget - an estimate of future sales, it is used to create company sales goals.
Production budget - estimates the number of units (also costs involved with manufacturing) that must be manufactured to meet the sales goals.
Cash Flow/Cash budget - a prediction of future cash receipts and expenditures for a particular time period. (short term future)
Project budget - is a prediction of the costs associated with a particular company project.
Revenue budget - of revenue receipts of government and the expenditure met from these revenues.
Expenditure budget