Strategy and Practice 5 - Innovation-Based Strategy
Innovating forms of organizations
- Innovation in terms of organizational structure like m-form
- Innovation as novel combination of processes - new combination of structures using BPR
- Innovation as novel re-combination of previous structures - recombining previously new structures differently using BRP, or HR v Personnel Customer service rather than Sales
- Innovation as an organisational initiative - may not be new - but new for that industry
Why new forms?
- Dismanatling of vertical forms
- deregulation
- M&A
- Less protectionism
- JV's
- more volatile buying patterns
- faster diffusion of technology
- New Technologies
- organizing to exploit information
Technology is a driver of these changes
- The internet
Galbraith - 6 Shapers of Organizational forms
- Buying power
- variety
- The internet as an integrating force
- Change - more decisions need to made more frequently - needs collaboration and departmentalism
- Speed
- Multiple channels
Ideal Forms or Organizational structures
Ashkenas has argued for organizations without boundaries Hamel says that organisations arent designed for innovation Benenton has broken away from silo structure and has 350 suppliers manufacturing for them
Novel Combinations or recombinations of processes
- Reducing costs
- Changing structures
- BPR
- Continuous Improvement
- Customer service
A unified perspective Denison's process-based theory of organizational design
A focus on value chain and networks
- More market driven than hierarchy driven
- Focus on external relations
Firm strategy - increasingly about devloping core competences Hierarchy structure - is still present from an administrative view but not crucial determining capabilities A move towards defining organizations in terms of relations Firm boundaries - more blurred - much larger constituency of interests
Duality of structure and process
Communications and relations more important than structure and cintracdicts Chandler's structure follows strategy
Globalization is affecting structure Ghoshal Technology means that firms are not constrained by geography New Manufacturing systems - Japanese Continuous Improven Kaisan- has an affect on organizational structure Managaing business process not depetament - x-functional teams
Global firms as inter-organisational networks - HQ Parenting values
Organising to exploit knowledge and not capital and distributing knowledge - social capital becomes a form of competitive advantage
Modularity - interconnecting coordinating self organizing networks
n-form comes from the hypercompetitive environments
Success is no longer determined by economic success but cooperation and proximity of government and social agencies
Innovation - is doing or thinking something new Creativity - something that might already done but in a new context
Much thinking around organizing organizations to meet information needs, hyper-competitiion, globalization
Recent effects - breakdown in vertical structures, excess capacity, M&A, trading blocks, volatility of customers buying patterns
6 Shapers of tomorrow's organizations
- structures around customers segments
- internet as a integrating force
- Variety amd mass customization
- Speed
- multiple distribution channels
- decentralization and networks to make decision quickly
Virtual organizations
- without boundaries - Benetton
- Changes in structure - to reduce costs, bpr, TQM
- Chnages in process - CI, learning organizations
- ""externally focused = customer service
Denison process-based theory of Organizationa Design - Value chain and networks, alliances and inter-form networks
Myerson - swift trust - trust is a key requirement of new organizations forms
Organizations structure will be less about reducing transaction costs but gaining access to new mkts
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