BUSINESS STRATEGY ASSIGNMENT Ans1: The historian, Alfred Chandler, substantiated his 'Structure follows Strategy' thesis based

on four case studies of American conglomerates that dominated their industry from the 1920's onward. Chandler described how the chemical company Du Pont, the automobile manufacturer General Motors, the energy companies Standard Oil of New Jersey and the retailer Sears Roebuck developed over time by identifying four sequential stages: 1. acquisition of resources such as employees and raw materials and the buildup of marketing and distribution channels; 2. establishment of functional structures to increase efficiency; 3. adoption of growth and diversification strategy: diversification into new markets and products to overcome limits of home market; 4. the creation of the then revolutionary diversionalised form to manage large conglomerates. But in the present scenario, the mantra is Strategy Follows Structure, Structure Supports Strategy. Strategy and structure are married to each other. If you change one you have to change the other. For too long, structure has been viewed as something separate from strategy. Revising structures are often seen as ways to improve efficiency, promote teamwork, create synergy or reduce cost. Yes, restructuring can do all that and more. What has been less obvious is that structure and strategy are dependent on each other. You can create the most efficient, team oriented, synergistic structure possible and still end up in the same place you are or worse. Strategy follows structure, structure supports strategy The Connection between Strategy and Structure Structure is not simply an organization chart. Structure is all the people, positions, procedures, processes, culture, technology and related elements that comprise the organization. It defines how all the pieces, parts and processes work together (or dont in some cases). This structure must be totally integrated with strategy for the organization to achieve its mission and goals. Structure supports strategy. If an organization changes its strategy, it must change its structure to support the new strategy. When it doesnt, the structure acts like a bungee cord and pulls the organization back to its old

strategy. Strategy follows structure. What the organization does defines the strategy. Changing strategy means changing what everyone in the organization does. When an organization changes its structure and not its strategy, the strategy will change to fit the structure. Strategy follows structure. Suddenly management realizes the organizations strategy has shifted in an undesirable way. It appears to have it done it on its own. In reality, an organizations structure is a powerful force. You cant direct it to do something for any length of time unless the structure is capable of supporting that strategy. A Science Fiction and Real World Example Lets look at an imaginary example using the human body. Suppose science figured out how to create a living tissue arm to replace ones existing arm that could perform 300% better in strength, responsiveness and dexterity. The strategy here is to restructure the body with this super arm so it can do more. The scientists successfully replace an existing arm with this new super arm. What will happen? The rest of the body remains as it was before. So the heart, circulation system, nervous system and brain are still structured to support a regular arm. This new arm requires more and faster blood flow, faster neuron responses in the brain and so on to support its functions. Over time, the super arm will evolve back into a regular arm because the rest of the body cannot support its enhanced capabilities. For this science fiction example to work, scientist would need to restructure the entire human body, not just one part of it. What happens when you restructure sales channels resulting in large sales increases but nothing is changed in order processing, customer support, engineering or manufacturing? You end up with a lot of unhappy customers because the company cant deliver on its promise. How many times have we seen something like this happen? Strategy is the Structure The sum total of how an organization goes about its work is its strategy. Structure and strategy are married to each other. When a company makes major changes, it must carefully think out every aspect of the structure required to support the strategy. That is the only way to implement lasting improvements. Every part of an organization, every person working for that organization needs to be focused on supporting the vision and direction. How everything is done and everything operates needs to be integrated so all the effort and resources support the strategy. It takes the right structure for a strategy to succeed. Management that is solely focused on results can have a tendency to direct everyone on what they need to do without paying attention to the current way the organization works. While people may carry out these actions, it is only when their daily way of working supports strategy that the organizations direction is sustainable over .

Ans2 : Organizations are fundamentally about people. Strategic change can originate both from within the institution, as well as from the external environment in which it operates. The style or method chosen by the organization to manage pivotal change plays a key role in its success or failure. The technique offered by Kenneth Benne, Robert Chin and Fred Nichols focuses on a mix of four strategies to manage change. Empirical-Rational Strategy

The empirical-rational strategy believes that rational people will look out for their own self-interests. This strategy caters to the self-interest of people affected by change. The underlying assumption holds that people are rational beings and will naturally seek ways to profit from the change once its consequences are fully understood. To be effective, the benefits must outweigh the risks, and collective resistance cannot be overwhelming. Normative-Reeducative Strategy

The normative-reductive strategy focuses on group cultural normsThis strategy is grounded in the belief that people are social creatures, and cultural norms are core to their group identity. Although strategic change can be uncomfortable, the void of uncertainty left in people's lives is even more so. Dynamic and influential leadership, along with cordial relationships within the organization, is vital to success. This strategy is not effective in turnaround situations or those with short deadlines. Power-Coercive Strategy

The power-coercive strategy offers the least options The basic tenet of this strategy is that society, as a whole, will conform and acquiesce to the rule of authority. To be effective, the organization must perceive an immediate threat to itself, which calls for swift and decisive action to ensure its survival. This strategy purposely offers fewer, rather than more, options.

Environmental-Adaptive Strategy

The environmental-adaptive strategy recognizes that people can adapt and grow. This strategy is predicated on the observation that people are often quicker to adapt to a new culture than they are to oppose the change, which lead to its creation. The sense of loss that comes with change is a disruptive force in people's lives. This motivates them to accept and embrace the new culture to regain stability. This strategy is best suited for radical, transformative changes Strategy Selection There is no one strategy, or magic bullet, that fits all situations. Rather, a mix of strategies is often necessary to fully address each individual case. Many considerations need to be taken into account, including the degree of change and resistance, the population of the organization, the stakes involved, availability of expertise and deliverable time frame. When stakes are high, a mix of all four strategies is recommended because nothing can be left to chance. Short time frames and lack of expertise call for a power-coercive strategy for effective command and control. However, the dependency of an organization on its members, and vice-versa, will dictate or preclude the power-coercive style

Role of leaders: -Sensitive to internal and external context of change (e.g. values & beliefs of organization, environmental factor -competition) Understand the required strategic architecture. Employ appropriate style of managing change. Have visionary capacity, good at team building and playing, self-analytical. Role of middle managers: Monitoring performance and behavior of staff members Explaining strategy to their subordinates. Allocation and control of resources

Role of outside consultant: Brings a fresh perspective on the organization. Evaluation on unbiased basis.