The chapter focused on business strategies that enable an organization to achieve efficiency and profitability. The three lateral organizations discussed were product-centric, customer-centric, and real-time. An organization that is product-centric focuses on developing more advanced and newer products without prioritizing the demand for the product in the market (Khan et al., 2012). The introduction of the product is what creates customer demand. Examples of such products from renowned organizations include Tesla, Google, and iPad from Apple Inc.
A customer-centric organization, on the other hand, first curves out a customer segment, analyzes the customers’ wishes and needs and proceeds to develop services and products that meet these wishes and needs (Tseng & Piller, 2011). A customer-centric organization increases the customer wallet share within the segment and targets similar customers from other competitors. Examples of customer-centric organizations are Amazon, Nike, and South West Airlines.
In the 21st-century global market, the availability and accessibility of the internet have enabled customers to order products and services based on their personal preferences (Brynjolfsson et al., 2011). A customer can visit a virtual online store, enter the details of the product and customized specifications they desire, and place an order. The product and service provider is then tasked with creating a product that meets the specifications laid down by the customer. By so doing, the business targets retaining the customer and hopefully expanding its business through word-of-mouth from a satisfied customer.
A real-time organization focuses on ensuring data is available around the clock. Such organizations utilize real-time data to work, restructure and increase sales of their products and services (Laudon & Traver, 2016). These organizations are able to deliver superior customer service, faster inventory turn-around, and quicker marketplace change responses. Additionally, real-time organizations can anticipate challenges way before they encounter them. Examples of organizations that use real-time data include Nike Plus and Amazon.
A reconfigurable organization design is implemented in a business environment that is turbulent and rapid (Galbraith, 2010). To change at the same speed as its environment, an organization needs to facilitate integration, change, and variety. Such an organization cannot align itself to strategy as this is often short-lived due to competitors’ copying the same. Further, aligning on an advantage that is non-sustainable can result in friction, conflict, lack of clarity, and cross-purpose functioning of business units which results in organizational energy dissipation (Stefanović et al., 2011). Hence, a reconfigurable organization has three capabilities, including forming departmental networks and teams; utilization of markets and internal process to coordinate multiple team complexity, and partnership formations to secure on lacking capabilities. The organization is characterized by knowledge management, active leadership, integration, flexibility, learning, change readiness, and employee commitment. The organization takes advantage of opportunities in the market and proactively and efficiently realigns its strategy to remain competitive (Stefanović et al., 2011). It accomplishes this by combining and recombining skills, resources, and competencies to respond to environmental changes.
An organizational structure is a network of teams that allow for a business to keep at par with an unpredictable and fluid global economy (Shaftritz et al., 2015). Companies in the current century decentralize their leadership and propel toward customer and product-centric organizations. Furthermore, they are creating dynamic networks with highly empowered teams that coordinate and communicate activities in a powerful and unique way. A horizontal organizational structure is ideal where a business wants to tap into its employees’ imagination and creativity and empower them to work with no micromanagement. Employees are granted permission to make decisions without needing approval from the executive (Shafritz et al., 2015). The vertical organization is employed where businesses have a large number of employees and has a similar structure to a pyramid. Senior-level management is responsible for making all decisions which are consequently communicated to mid-level management (Shafritz et al., 2015).
Lastly, the chapter also discussed the purpose of business outsourcing. Organizations that choose to outsource some of their functions do so with the primary intent of saving on overhead business costs while channeling all other resources to enhance the core business. Other reasons why organizations outsource include the need to access experienced professionals, economies of scale, comparative cost advantages, streamlining business costs, and productivity improvement (Schniederjans et al., 2015).
Outsourcing has been adopted by many businesses in the global market to countries that offer low-cost production environments and labor (Levine, 2012). The last decade has been characterized by organizations based in the Western world reaching out to the East for labor and related production services. Though this has resulted in substantial cost savings for the Western-based organization, it has led to massive job losses and increased unemployment rates in the same countries. So while Eastern countries have witnessed an increase in employment rates due to increased demand for cheap labor, outsourcing has inevitably negatively impacted the product’s country of origin.
In conclusion, businesses are organized in networks that work for a particular production or service provision area. Not every model will fit into one specific business sector. Hence, an organization needs to examine its competitive market and adopt a strategy that will allow for the sustainability and profitability of the organization within the industry it operates.
Brynjolfsson, E., Hu, Y., & Simester, D. (2011). Goodbye Pareto principle, hello long tail: The effect of search costs on the concentration of product sales. Management Science, 57(8), 1373-1386.
Galbraith, J. (2010). The multi-dimensional and reconfigurable organization. Organizational Dynamics, 39(2), 115.
Khan, O., Christopher, M., & Creazza, A. (2012). Aligning product design with the supply chain: a case study. Supply Chain Management: An International Journal, 17(3), 323-336.
Laudon, K. C., & Traver, C. G. (2016). E-commerce: business, technology, society.
Levine, L. (2012). Offshoring (or offshore outsourcing) and job loss among US workers.
Schniederjans, M. J., Schniederjans, A. M., & Schniederjans, D. G. (2015). Outsourcing and insourcing in an international context. Routledge.
Shafritz, J. M., Ott, J. S., & Jang, Y. S. (2015). Classics of organization theory. Cengage Learning.
Stefanović, I., Prokić, S., & Vukosavljević, D. (2011). The response to the changing landscape of tomorrow: Reconfigurable organizations. African Journal of Business Management, 5(35), 13344-13351.
Tseng, M. M., & Piller, F. (Eds.). (2011). The customer centric enterprise: advances in mass customization and personalization. Springer Science & Business Media.
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u03a1 Reading Reflection Paper 3
Note: Complete this unit’s first discussion before you start working on this assignment.
The unit readings cover single-business strategy types, the reconfigurable functional organization, and network organization design. Your reflective paper assignment asks you to show your understanding of what you have read and to add your own thoughts and experiences. Completing this assignment will help you activate your new knowledge of organization design.
Reflect on the unit readings. Demonstrate that you remember, understand, and can apply the reading to real-world examples.
Your paper should meet the following requirements:
- Written communication: Written communication should be free of errors that detract from the overall message.
- APA format: Resources and citations should be in current APA format. Be sure to include title and reference pages.
- Length: 3 typed pages, double-spaced pages, not including the title and reference pages.
- Font and font size: Times New Roman, 12 point.
Reading Reflection Paper 3 Scoring Guide
Due Date: End of Unit 3.
Percentage of Course Grade: 2%.
|Explain how strategy drives structure.
|Does not discuss how strategy drives structure.||Discusses how strategy drives structure.||Explains how strategy drives structure.||Explains how strategy drives structure, using information from the readings.|
|Explain the importance of flexible organization design.
|Does not identify the importance of flexible organization design.||Identifies the importance of flexible organization design.||Explains the importance of flexible organization design.||Explains the importance of flexible organization design, including multiple possible structures.|
|Illustrate approaches to designing flexible organizations.
|Does not list approaches to designing flexible organizations.||Lists approaches to designing flexible organizations.||Illustrates approaches to designing flexible organizations.||Illustrates approaches to designing flexible organizations, including an explanation of how star can be used to drive an integrated structure.|
|Apply concepts from the assigned readings to a real-world example.
|Does not discuss concepts from the assigned readings to a real-world example.||Discusses concepts from the assigned readings to a real-world example.||Applies concepts from the assigned readings to a real-world example.||Applies concepts from the assigned readings to a real-world example, with detailed explanations.|
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