Anderson_PPT05.pptx

    Organization Design: Creating Strategic and Agile Organizations

    Donald L. Anderson

    Chapter 5

    Processes & Lateral Capability

    Lateral Capability: The Horizontal Organization

    Lateral capability: Information and decision processes that coordinate activities spread out across different organizational units, providing mechanisms for decentralizing general management decisions

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    LO 5-1: Why lateral capability is important (and difficult_

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    Lateral Capability: The Horizontal Organization

    Lateral capability = horizontal organization

    Formal structure = vertical organization

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    Lateral Capability: The Horizontal Organization

    Encourages coordination throughout the structure

    Motivated by:

    A variety and diversity of tasks

    Rapidly changing environment

    High degree of interdependence among functional units

    Common technology platforms

    Requirements for faster cycle time

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    Why Developing Lateral Capability Is So Difficult

    Internal competitive forces:

    Turf wars

    Stronger identification

    Rewards

    Mistrust

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    Benefits and Costs of Lateral Capability

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    Forms of Lateral Capability

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    LO 5-2: The forms of lateral capability and their advantages and disadvantages

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    Networks

    Informal communication networks can circumvent regulated channels

    Learning who to contact

    How to get information

    How to participate in the social fabric

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    Networks

    Cultivating Networks

    Glue people

    Physical spaces

    Face-to-face collaboration

    Job rotation programs

    Training

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    Networks

    Communities of practice

    Rapid problem solving

    Sharing best practices

    Developing professional skills

    Electronic social networks

    Shared file systems

    Social media platforms

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    Communities of practice: Groups of people informally bound together by shared expertise and passion for a joint enterprise

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    Networks

    Advantages:

    Encourage innovation

    Knowledge sharing

    Broader organizational perspective

    Not costly

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    Shared Goals, Processes, and Systems

    Shared or superordinate goals

    Lateral processes:

    Management practices

    Planning

    Budgeting

    Information technology

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    Shared goals: If employees in different departments have the same goal, they are more likely to coordinate in service of that goal

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    Advantages:

    Add another level of formality

    Groups see the shared impact of their work

    Mangers and employees can see how they are connected

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    Shared Goals, Processes, and Systems

    Disadvantages:

    Time consuming and costly

    Process or technology can direct work

    Employees at mercy of required process

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    Shared Goals, Processes, and Systems

    Teams

    Two or more people

    Specific performance objective

    Coordination among team member sis required to attainment of team objective

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    Teams

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    Teams

    Cross-functional teams:

    A small collection of individuals from diverse functional specializations within the organization

    Members report to a project team leader

    “Home” manager directs day-to-day work

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    Teams

    Eight characteristics of successful teams:

    A clear, elevating goal

    A results-driven structure

    Competent members

    Unified commitment

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    Teams

    A collaborative climate

    Standards of excellence

    External support and recognition

    Principled leadership

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    Teams

    Advantages:

    Empower individuals lower in the hierarchy

    Can be formed quickly and flexibly

    Disadvantages:

    Require team skills

    Need a clear purpose

    Require defined decision authority

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    Integrator Roles

    Formal positions with the responsibility to share information and coordinate across the structure

    Handle nonroutine, unprogrammed problems

    Often do not have formal authority

    Skilled at conflict resolution, negotiation, and persuasion

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    Matrix Organizations

    Two-Hat Matrix: Each manager has responsibility over two dimensions of the matrix

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    Matrix Organizations

    Three-Dimensional Matrix: The company maintains business/product units and geographic regions

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    Matrix Organizations

    To make the matrix successful:

    Seeing that conflicts are resolved

    Managing the top team

    Balancing power

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    Getting the Level of Lateral Capability Right

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    How to Decide Which Form to Use

    Considerations:

    Degree of interdependence

    Business strategy

    Task uncertainty and complexity

    Cost

    Interpersonal skills

    Trust and existing relationships

    Changes over time

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    LO 5-3: How to decide which form of lateral capability to implement in a design

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    Governance Models and Decision Authority

    Governance and planning processes

    Direction

    Oversight

    Innovation

    Strategic Intentiosn

    Decision-making practices

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    LO 5-4: How governance models and decision processes enhance collaboration

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    Enablers for Successful Lateral Capability

    Leadership and management skills

    Shared values

    Authentic empowerment

    People practices

    Reward systems

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