Read the summary and the most important questions on Topic 6: Developing Capabilities for Innovation

• 2 Critical components of strategy implementation

• What are the critical components of strategy implementation?

  • Innovative, dedicated, motivated people
  • Creative empowering leadership
  • Organizational structures that match competitive strategies, efficiently
  • Organizational controls and incentives that efficiently focus people on strategic goals and objectives
  • Organizational arrangements that efficiently "govern" the critical activities

• 3 Organizational Structure

• What is the objective of organizational structure? To balance:

  • The economic advantages of specialization, with 
  • The problems and costs of coordination and motivation, i.e. bureaucratic costs

• Where do bureaucratic costs arise from?

  • Supervisory monitoring
  • Motivation problems
  • Coordination activities
  • Opportunism and information disortions

• 4 Generic Organizational Structural Forms

• Which 3 generic organizational structures are there?

  • U-Form
  • M-Form
  • H-Form (holding or conglomerate structures) 

• Which hybrid organizational structures are there?

  • Matrix Structures
  • Team-based structures

• 5 U-Forms

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• What are the advantages of the U-form?

  • Increased specialization
  • Economies of scale in monitoring
  • Critical decision-making is centralized in one "peak" person

• What are the disadvantages of the U-form?

  • Cannot handle the complexity of multiple activities well
  • Subgoal pursuit problems can become acute
  • Absence of objective measures of performance
  • Operational concerns can divert attention from strategic/competitive/entrepreneurial issues

• 6 M-Forms

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• What is a M-form

  Designed to manage diversification while controlling bureaucratic costs and control-loss problems

• What does M-form decentralize?

  Operating decision-making
  To the business unit/division level where all necessary competitive and operational decisions are made

• Where is the strategic decision-making responsibility?

  Still retained at the headquarters.