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Organizational Changes to Support Corporate Strategy

Essay by   •  May 17, 2013  •  Essay  •  517 Words (3 Pages)  •  1,205 Views

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In recent years massive changes were made in the size & structure of many business firms to align with its corporate strategy. These changes are described as rightsizing, reengineering and reinventing the organization. The renewal or reforming of traditional organization moves through three phases;

Vertical disaggregation: This approach reduces the size of the organization by removing jobs and layers of middle managers, leveling the hierarchy and start practicing of empowering their staffs.

Internal redesign: Organizational renewal is more than just reducing staff, removing layers of managers and adopting the process of empowering workers. This phase alters the internal design of the organization. The new organization forms are lean, flexible, adaptive & responsive to customer needs and market requirements. The altered business design involves in designing & creating new products to meet customer needs better and ensure smooth supply of products to the marketplace. A major concern of the organization is to understand the customer needs, offering value to customers and retaining them.

New Organizational Form: The third phase of the organizational change involves the formation of relationships with other organizations. Traditional organizations were maintaining inter-organizational relationships before but now new organizations have found a new way to maintain relationship with suppliers, customers and even competitors. This form of relationship is known as networks.

Components of Strategy

Corporate strategy is the way a company creates values through the configuration and coordination of its multimarket activities. The components of the strategy are mentioned below;

i) Deciding Corporate Vision: Management's vision defines what the corporation is and what it does and provides important guidelines for managing and improving corporation. The vision statements provides several information such as,

* The reason of company's existence, its responsibilities to stockholders, employees and others.

* How the firm and its product will provide benefit to the customers.

* Management's performance expectations for the company and other general guidelines for business strategy.

ii) Objectives: Objectives need to be set so that the performance of the company can be measured. Company objectives may be established in the following areas; marketing, innovations, resources, production& finance. Examples include growth and market share expectations, improving product quality, return on invested capital etc. objectives are set at several levels in an organization.

iii) Capabilities: It is important to place a company's strategic focus on its distinctive capabilities. These capabilities may offer the organization the opportunity to compete

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