ORGANIZATION

How to bring people and processes together:

(1) What re-configurations, reach extensions and strategic relationships will be necessary to deliver the Intended strategy.

(2) What new skills and capabilities will be needed and what changes in the procedures relating thereto.

(3) What performances will be required and how these can be achieved.

(4) What changes (if any), are required in the corporate culture to meet the new requirements.

(5) How to integrate operational activities to align them with the new strategic objectives and plans.

Alignment between HR activities and strategic planning can be formed by Human Resources. HR must expand beyond administrative function and focus more on how it can support the organization in strategic planning and implementation. By increasing the competencies of HR personnel, the department will increase its credibility and be integrated into a strategic role.

For that purpose measuring itself from a business perspective and by the value it brings an organization is the key to its elevation to the role of a strategic business partner. Once there is a clear understanding of how HR affects the bottom line from a business / and or strategic point of view, the role of the HR function in the overall success of the organization will become crystal clear.

Organization may be viewed under three broad "problems" of organizational adaptation: the entrepreneurial problem, the engineering problem, and the administrative problem.

There are basically 3 types of organizations:

Defenders, Analyzers, and Prospectors. Each type has its own unique strategy for relating to its chosen market(s), and each has a particular configuration of technology, structure, and process that is consistent with its market strategy.

A fourth type of organization encountered in our studies is called the Reactor.

A true Defender is able to carve out and maintain a small niche within the industry which is difficult for competitors to penetrate. Typically, the Defender does so by developing a single core technology that is highly cost-efficient.

Technological efficiency is central to the Defender's success since its domain has been deliberately created to absorb outputs on a predictable, continuous basis. Some Defenders extend technological efficiency to its limits through a process of vertical integration  incorporating each stage of production from raw materials supply to distribution of final output into the same organizational system.

The Defender's administrative problem - how to achieve strict control of the organization in order to ensure efficiency is solved through a combination of structural and process mechanisms that can be generally described as "mechanistic".

These mechanisms include a top-management group heavily dominated by production and cost-control specialists, little or no scanning of the environment for new areas of opportunity, intensive planning oriented toward cost and other efficiency issues, functional structures characterized by extensive division of labor, centralized control, communications through formal hierarchical channels.

Prospectors respond to their chosen environments in a manner that is almost the opposite of the Defender.

Generally speaking, the Prospector enacts an environment that is more dynamic than those of other types of organizations within the same industry. Unlike the Defender, whose success comes primarily from efficiently serving a stable domain, the Prospector's prime capability is that of finding and exploiting new product and market opportunities.

This type of organization invests heavily in individuals and groups who scan the environment for potential opportunities.

The Prospector's overall engineering problem is how to avoid long-term commitments to a single type of technological process, and the organization usually does so by creating multiple, prototypical technologies which have a low degree of routinization and mechanization.

The Prospector's administrative problem flows from its changing domain and flexible technologies: how to facilitate rather than control organizational operations. That is, the Prospector's administrative system must be able to deploy and coordinate resources among numerous decentralized units and projects rath- er than to plan and control the operations of the entire organization centrally.

To accomplish overall facilitation and coordination, the Prospector's structure-process mechanisms must be "organic".

These mechanisms include a top-management group dominated by marketing and research and development experts, planning that is broad rather than intensive and ori- ented toward results not methods, product or project structures characterized by a low degree of formalization, decentralized control, lateral as well as vertical communications, and so on.

In contrast to the Defender, the Prospector's descriptive catchword throughout its adminis- trative as well as entrepreneurial and engineer- ing solutions is "flexibility".

The Defender and the Prospector reside at opposite ends of a continuum of adjustment strategies. Between these two extremes, a third type of organization is called the Analyzer.

A true Analyzer is an organization that attempts to minimize risk while maximizing the opportunity for profit and thus the word that best describes the Analyzer's adaptive approach is "balance".

The Analyzer concerns itself with how to locate and exploit new product and market opportunities while simultaneously maintaining a firm core of traditional products and customers only after their viability has been demonstrated and accomplished through imitation.

eg. - only the most successful product or market innovations by prominent Prospectors are adopted.

The Analyzer can grow through market penetration as well as product and market development. It is functionally organized and exhibits high levels of standardization, routinization, and mechanization in an attempt to approach cost efficiency.

Generally speaking, the administrative problem of the Analyzer is how to differentiate the organization's structure and processes to accommodate both stable and dynamic areas of operation.

A fourth type of organization, the Reactor, exhibits a pattern of adjustment to its environ- ment that is both inconsistent and unstable; this type lacks a set of response mechanisms which it can consistently put into effect when faced with a changing environment.

The Reactor's "adaptive" cycle usually consists of responding inappropriately to environmental change and uncertainty, performing poorly as a result, and then being reluctantaggressively in the future. Thus, the Reactor is a "residual" strategy, arising when one of the oth- er three strategies is improperly pursued.

Why do firms become Reactors:

1. top management may not have clearly articulated the organization's strategy
2. management does not fully shape the organization's structure and processes to fit a chosen strategy
3. a tendency for management to maintain the organization's current strategy-structure relationship despite overwhelming changes in environmental conditions

Shortfalls:

• a number of conflicting but legitimate demands for resources, prove unable to develop a unified, cohesive statement of the organization's strategy; thus, consistent and aggressive behavior was precluded
• technological, and administrative decisions required to have an operational strategy are not properly aligned
• limiting the domain to a narrow line of products, integrating backward into growing and harvesting, and assigning a controller to each of the company's major functional divisions as a means of keeping costs down.
• the company's market has become saturated, and profit margins have shrunk on most of the firm's products

Sooner or later, companies must move toward one of the consistent and stable strategies of Defender, Analyzer, or Prospector.