BUS520 Week 10 Scenario: Management and Leadership: Strategy and Organizational Design Slide # | Scene/Interaction | Narration | Slide 1 | | | Slide 2 | | Sara: Hello.Today is the last day of your management training and I am very excited for you and the rest of the team.Before you complete your training, I would like for us to discuss the importance of implementing social projects into your company’s strategy and organizational design.Please gather Madison, Ethan, and Ben into the conference room so we can begin our final discussion. | Slide 3 | | Sara: Good Morning, team!Today is the last day of your training. You have all done very well. We will end our training with a discussion on strategy and organizational design and how important these elements are to leaders and managers of all corporations.Before we begin, Madison, can you provide us with a definition of strategy? | Slide 4 | | Madison: Sure. I believe that strategy is the process of positioning the organization in the competitive environment and implementing actions to compete successfully. This can include who the company plans on serving, what it will provide to others, and the types of contributions the firm intends to make to the larger society.
Without a strategy, it is basically impossible for a corporation to have a long term plan or method to achieve their objectives and goals. A strategy also helps managers and employees focus on achieving the significant elements contained in the strategy. For example, here at Enterprise Solutions, one of our strategies is to seek innovative technologies.This way, we’re the first company to be using groundbreaking technology before our competitors, giving us an advantage in the marketplace. | Slide 5 | | Sara: Good answer, Madison.When developing a strategy, it is important for us to think about our choices. The key to success is to integrate our choices into an overall pattern, which we can call our strategy for success. All managers will have to make important decisions pertaining to strategy.Some obvious questions include:“How should the company be lead?” “How should the company be positioned in the environment?” And “What contributions to society should companies make?” | Slide 6 | | Ben: I think managers have to take into consideration the fact that all strategies have the potential to fail. Is there a process or design that a manager or management team follows when making difficult decisions pertaining to strategy? | Slide 7 | | Sara: That is a very good question, Ben.Some choices are not always easy for managers to make, and it is obvious that all managers want to make the best decisions for the company. When making these decisions, it is important for a manager to stay consistent with the company’s values, ethics, and morals.The process involved in making these dynamic decisions is known as organizational design.Organizational design is the process of choosing and implementing a structural configuration for an organization. The design process takes basic structural elements - such as the number of employees, chain of command, and corporate locations - and molds them to the company’s desires, demands, constraints, and choices.This process ultimately provides a consistent stream of decisions that fits the needs and values of the organization. | Slide 8 | | Ethan: I see.I imagine these decisions would be based on factors including the size of the company, the environment, and the strategy it implements for growth and survival. Also, how work is done, business processes, information sharing, and how employees communicate with each other - all of these factors would be included in the organizational design.For example, in a case where downsizing is the strategy, organizational design involves figuring out which positions or departments to trim. | Slide 9 | | Sara: That’s right, Ethan.The design promotes the development of individual skills and abilities;Helps the company adjust to new technological developments; and Helps shape its competitive landscape as well.Good organizational design helps communication, productivity, and innovation. It creates an environment where people can work effectively. | Slide 10 | | Ben: I see the importance of having a well-developed organizational design.Can you give us an example of a leader who implements a successful organizational design for their company? | Slide 11 | | Sara: I am glad you asked that question, Ben.
There is.Jim Sinegal, the CEO of Costco Incorporated, believes that treating employees well is consistent with nurturing and developing customer loyalty.He believes that his competitors follow a low-cost strategy, which means low wages and benefits for their employees. Jim Sinegal decided to step away from this strategy because he felt that it ultimately prevented him and other leaders from learning from their employees. Instead, as part of the organizational design, Costco Incorporated pays nearly all of their full-time employees a better than average base-pay with full benefits, including health care and retirement. Jim Sinegal has proven that investing in his employees is a successful strategy for his company. | Slide 12 | | Ethan: That is very interesting. I have also heard that Costco Incorporated cuts carrying costs by having a limited range of items compared to most companies.
This must have been an important strategy decision, which helped contribute to their success. | Slide 13 | | Sara. That is right, Ethan.Costco Incorporated carries about five-thousand items compared to Walmart’s one-hundred thousand item count.
With most of these items being higher-end products, this helps stimulate store excitement. This, along with other organizational design decisions, has helped Costco Incorporated become the fifth largest retailer in the U.S. and twenty-ninth on Fortune’s global Five Hundred list of America’s largest corporations! | Slide 14 | | Madison: Wow! Now I see the importance of a well thought-out organizational design. But I have a question.I remember you mentioning the importance of being involved in social projects.As managers of an organization, is it a good strategy to be involved in a project that can benefit the community? | Slide 15 | | Sara: Good question, Madison.By being involved in social projects, we as leaders can see how our organization affects communities both positively and negatively.
Let’s look at an example from one of our clients, the New Jersey based manufacturer of medical, pharmaceutical and consumer goods, Johnson & Johnson Incorporated.In Bangkok, Thailand, there are a growing number of senior citizens who are living alone, and are more vulnerable to becoming ill because of a lack of mobility and isolation. Nonprofit organizations in Thailand are considering potential strategies to address the urgent need to care for the senior citizens who are living alone. Working with local community-based organizations, Johnson & Johnson Incorporated began to distribute home-based care packs that can be delivered to those that are unable to leave their homes on their own. Groups of volunteers will also visit the elders once a month and purchase groceries, but want to make sure the senior citizens have medical supplies that could be needed. | Slide 16 | | Ethan: Wow. I did not know that they were involved with that project in addition to selling diapers, lotions, bandages, and cleaning products. I never thought about for-profit companies being involved in nonprofit missions. | Slide 17 | | Sara: I thought you would be surprised.You can go to the Internet and find hundreds, if not thousands, of companies both large and small contributing to some very worthwhile causes. It is very important that managers understand the benefits of corporate social responsibility and responding to an issue based on a community in need. | Slide 18 | | Ben: In the example you provided, I see the benefits of volunteerism, product donation, and emergency relief for the community. That is awesome!This requires teamwork, training, and innovation. So not only are we benefiting the community, we may be learning new methods of communicating, working together, and getting things done. We are basically learning and evolving as a team while contributing to a good cause.This is a whole new way of looking at strategy and organizational design. | Slide 19 | | Madison: And to add on to this, being involved in social projects helps enhance relationships with customers and helps differentiate our company from our competitors. | Slide 20 | | Ethan: That is a good point, Madison.Social projects like these also generate positive publicity and media opportunities due to the ethical business practices being implemented.Negative or destructive practices can quickly hurt an organization’s reputation, especially with the technological advances in social media.Organizations are accountable for their actions more than ever. | Slide 21 | | Sara: You guys are doing great. So now you understand how being a part of social projects is very beneficial for your organization. Remember - when focusing on social projects, strategy, and organizational design, ask yourself “Who are we trying to help?”“What problems are we seeing in the community and what are some innovative ways we can step forward as an organization and attempt to solve these problems?”And finally, “What is holding us back?” | Slide 22 | | Sara: Team, you have done extraordinarily well, and I think that all of you are ready to be leaders and managers of your own organizations. Before we complete our final training, remember to read “Finding the Leader in You: Jim Sinegal’s Strategy at Costco is to Not Follow the Crowd” located in your textbook.
Also, complete the e-Activity for this week as well as the discussion on leading the whole organization strategically. Have a great day, everyone! | Slide 23 | | |