Strategic Direction
Strategic Direction
The role of strategic direction is to decide the end purpose of the organization. How the organization gets to the “end purpose” is through goals and strategy development (strategic planning). Organizational design functions to carry out the administration and execution of the strategic plan and as such, the organizational structure must support the strategic direction. (Daft 54-55). An organization that embarks on an organic open systems strategy that requires learning and innovation must look very different from an organization dedicated to efficiency.
There are six competitive strategies that top management can use to attain their organizations goals. Two strategies are based on a model by Michael E. Porter (Porter) and four are based on a model by Raymond Miles and Charles Snow (Miles and Snow).
Porter proposed that managers can make an organization more profitable and less vulnerable by adopting either a differentiation strategy or a low-cost leadership strategy. (Daft 62) A differentiation strategy, such as that developed by Apple, focuses on offering unique or distinctive products. A low-cost leadership strategy such as that developed by Family Dollar stores focuses on providing lower costs.
The Miles and Snow strategy is based on the idea that organizations strive for a fit between internal organizational characteristics and external factors. The four strategies are:
Prospector – The prospector strategy is to innovate, take risks, and seek out new opportunities to grow. (Daft 66) SEMCO under the leadership of Ricardo Semler is an excellent example.
Defender – The defender strategy seeks to hold onto current customers and neither seeks to innovate or grow. This strategy is most suitable when the organization is in a declining industry or stable environment. (Daft 67) An excellent example is carmaker Rolls Royce.
Analyzer – The analyzer strategy seeks to maintain a stable business while innovating on the periphery. (Daft,
The role of strategic direction is to decide the end purpose of the organization. How the organization gets to the “end purpose” is through goals and strategy development (strategic planning). Organizational design functions to carry out the administration and execution of the strategic plan and as such, the organizational structure must support the strategic direction. (Daft 54-55). An organization that embarks on an organic open systems strategy that requires learning and innovation must look very different from an organization dedicated to efficiency.
There are six competitive strategies that top management can use to attain their organizations goals. Two strategies are based on a model by Michael E. Porter (Porter) and four are based on a model by Raymond Miles and Charles Snow (Miles and Snow).
Porter proposed that managers can make an organization more profitable and less vulnerable by adopting either a differentiation strategy or a low-cost leadership strategy. (Daft 62) A differentiation strategy, such as that developed by Apple, focuses on offering unique or distinctive products. A low-cost leadership strategy such as that developed by Family Dollar stores focuses on providing lower costs.
The Miles and Snow strategy is based on the idea that organizations strive for a fit between internal organizational characteristics and external factors. The four strategies are:
Prospector – The prospector strategy is to innovate, take risks, and seek out new opportunities to grow. (Daft 66) SEMCO under the leadership of Ricardo Semler is an excellent example.
Defender – The defender strategy seeks to hold onto current customers and neither seeks to innovate or grow. This strategy is most suitable when the organization is in a declining industry or stable environment. (Daft 67) An excellent example is carmaker Rolls Royce.
Analyzer – The analyzer strategy seeks to maintain a stable business while innovating on the periphery. (Daft,