Motorola’s CEO Edward J. Zander
What are the trade-offs that must be considered in making the decision to re-structure in order to best implement strategy as opposed to taking the organization as a given, and developing a strategy keeping structure fixed?
There are many organizations currently operating on business models and strategies that were developed several to many years ago. These models and strategies may work but can they be better? Over the past decade information technology has advanced, e-business models have exploded, the Internet has been on fire, and CEO’s have changed so fast it can make you dizzy.
Should a new CEO of an organization consider a restructuring in order to best implement a strategy for today’s changing business practices or just continue with the organization as given? Before deciding a CEO must clearly consider if this will “improve profitability, improve returns on company assets, lower the organizations break even point, reduce financial and operational risks, and increase shareholder value” (www. solvency.com). To use a health care analogy the CEO must decide if the company is in need of life support (needs a restructuring) or does it just have a simple cold (may just need some business practice changes).
There are several benefits to an organizational restructuring.
The CEO needs to create a corporate culture. His culture will determine what people should be doing and what should do not be trying. He can decide who will stay, who will leave, and how the job will get done. Culture starts with the boss. He can decide how he wants people to act and start modeling the behavior publicly. STOPPED HERE…!!!:)
All theories have assumptions and for argument sake I will imply the assumptions of the two frames (Bolman & Deal, 2013) I am going to discuss are true for my organisation. Drawing from the structure frame we need to focus on the structural elements, strategy, implementation, and adaptation. To develop a plan of what needs to be changed, I would first identify what is actually happening, what is likely to happen if no action is taken then work out what needs to be changed (Hersey, Blanchard, & Johnson, 2001). Then develop a detail outline of how to
The term business model gained popularity due to “the explosive growth of new ventures sparked by the internet”1 and is often erroneously used “to glorify all manner of half-baked plans”.2 Strategy is another “buzzword” that is often mistakenly used interchangeably with business model. There are numerous differences between the two but the defining characteristic is that a “business model is independent of competitors and the current state of the market”,3 focusing inwardly to describe, “as a system, how the pieces of a business fit together”.2 Strategy focuses on performance, looking outwardly at the industry, analyzing the current competition, future competition, suppliers and customers, and answers the key question “how you will do better than your rivals.” 2
Zott, C., Amit, R. And Massa, L. (2011) ‘The Business Model: Recent Developments and Future Research’, Journal of Management, vol.37, no.4 pp.1019-42 [Online]. Available at http://jom.sagepub.com/content/37/4/1019 [Accessed 24th November 2013]
Shafer, S. M., Smith, H. J., & Linder, J. C. (2005). The power of business models. Business
During the last decade, we’ve been to the top of the world—during the dot-com boom of the late 1990s—and back down again, when it all fell apart a few years later. But with the bad came the good: The Web forever changed the business world. The following small-business owners are shining examples of how Web-based technologies can be a businessperson’s best friend.
There are four key resources that can be broken down into categories; human, financial, physical and intellectual (Martin, 2015). Effective key activities are vital pieces of the puzzle that help the business deliver its value propositions ("20 Minute Business Plan: Business Model Canvas Made Easy," n.d.). These activities need to be carried out so the product or service that was promised can be delivered ("20 Minute Business Plan: Business Model Canvas Made Easy," n.d.). These particular activities coincide with the revenue stream building block, which is a procedure a company follows to get their chosen customer segments to purchase the service or product. A revenue stream can be generated seven ways; an asset sale, a usage fee, a subscription fee, lending/leasing/renting, licensing, a brokerage fee, and finally advertising (Martin,
However, an important concept associated with the open innovation paradigm is the significance of business model. Shafer defines business model as a “representation of a firm’s underlying core logic and strategic choices for creating and capturing value within a value network”. Specifically, the functions of the business model are to articulate the value proposition, identify market segment, define the structure of the firm’s value chain, specify revenue generating mechanism, define cost structure and formulate a competitive strategy. The importance of business model is that it serves as an intermediate link between the technical and economic domains....
According to Jim Sirbasku the Organizational restructuring strategies help you get the most from people by developing a plan for corporate restructuring, layoffs and mergers. For organizations to develop, they often must experience significant changes in their overall strategies, practices and operational procedures. As companies evolve so must their employees to align with their organization.
Today, the business environment has become more challenging and dynamic as a result of rapid development in technology and globalization, where it has become more important than ever to individual organizations to provide their fullest commitment, take correct decisions and actions to stay ahead of the industry competition and to achieve their goals.
Strategy formulation is the process of establishing the firm's mission, goals, and choosing among alternative strategies or plans; it involves and implies that preparing the best approach to respond to the circumstances of a firm's environment, whether or not its conditions are known in advance; being strategic and tactical, then, means being clear about the management's aims; being aware of the company's resources, and incorporating both into being consciously responsive to a dynamic environment (SM, 2010). As nearly all businesses have limited resources, top leaders and management must determine which alternative plans or strategies will do well to the organization most; strategic management requires attention to the big picture and the motivation to adapt to circumstances, and consists of the following aspects:
The feasibility study of a business’s design comprises of all strengths and weaknesses analyses within a particular business in order to determine whether the design is practicable and potential to benefit that business in a foreseeable future (Trimi, Berbegal-Mirabent 2012). To access this study, the researcher need to have a comprehensive understanding of the business’s resources and their interconnections which are included in the business model Canvas (Stephen, Richard 2014). This model is considered the most effective methodology in the process of supporting innovation and making decisions, thus, to assure the successfulness of a business or a project (Hanshaw 2015). This essay will discuss some central characteristics including customer
Strategic renewal is another desired outcome of corporate entrepreneurship. The new economic order and business environment has created a pace of change which requires businesses to adapt more frequently and rapidly than ever before. The changes could involve corporate structure, mergers and acquisitions, addressing new market opportunities, changing product portfolios, repositioning, adapting infrastructure, or adopting new technology. Managers in an organization must be able to take stock of its situation under changing market conditions and agree on a coherent new strategy that will meet the challenges of the present as well as of the future.
At the corporate level, there are three strategic alternatives that may be employed; growth, stability, and retrenchment (Parnell, 2014). Growth and stability plans are usually implemented when the company is performing well and business is going along as planned. When a business begins to fail, or there is a decline or recession noted, a retrenchment strategy may be developed and put into place. Retrenchment characteristically takes on one of three different paths: turnaround, divestment, or liquidation (Parnell, 2014). If a company determines that a turnaround is their best course of action, they typically focus on increasing efficiencies through cost and asset reductions (Schmitt & Raisch, 2013). According to Parnell (2014), this may include
Organizations are established in specific ways to obtain different objectives, and the structure of an organization can help or restrain its advance toward accomplishing these goals. Organizations of different sized and types can achieve higher sales and other profit adequately by identifying their requirements with the structure they use to operate.