The best strategies often fail not because they weren’t good strategies,
The best strategies often fail not because they weren’t good strategies,
but because they weren’t implemented properly. One of the most important aspects of implementing a good strategy is ensuring that the organization is designed in a way that will properly support the plan. In Week 4 you identified a generic strategic direction for a selected organization; in Week 5 you narrowed down that strategic direction and identified possible alternative strategies and then narrowed those alternatives down to ONE specific strategy to implement for either Target or Applebee’s. Using that specific strategy, identify what type of organizational design would best support that strategy. Provide a high level overview of the organizational design – be sure to fully explain the design and why it was selected to support the strategic direction and, more importantly, the specific strategy to be implemented
company: Target
Saylor URL:http://www.saylor.org/booksSaylor.org273Chapter 9Executing Strategy through Organizational DesignLEARNING OBJECTIVESAfter reading this chapter, you should be able to understand and articulate answers to the followingquestions:1.What are the basic building blocks of organizational structure?2.What types of structures exist, and what are advantages and disadvantages of each?3.What is control and why is it important?4.What are the different forms of control and when should they be used?5.What are the key legal forms of business, and what implications does the choice of a business form havefor organizational structure?Can Oil Well Services Fuel Success for GE?Chapter 9 fromMastering Strategic Managementwas adapted by The Saylor Foundation undera Creative Commons Attribution-NonCommercial-ShareAlike 3.0 license without attribution as requestedby the work’s original creator or licensee. © 2014, The Saylor Foundation.
Saylor URL:http://www.saylor.org/booksSaylor.org274General Electric’s logo has changed little since its creation in the 1890s, but the company has grown to become thesixth largest in the United States.Image courtesy of The General Electric Company,http://en.wikipedia.org/wiki/File:Early_General_Electric_logo_1899.png.In February 2011, General Electric (GE) reached an agreement to acquire the well-support division ofJohn Wood Group PLC for $2.8 billion. This was GE’s third acquisition of a company that providesservices to oil wells in only five months. In October 2010, GE added the deepwater exploration capabilitiesof Wellstream Holdings PLC for $1.3 billion. In December 2010, part and equipment maker Dresser wasacquired for $3 billion. By spending more than $7 billion on these acquisitions, GE executives made itclear that they had big plans within the oil well services business.While many executives would struggle to integrate three new companies into their firms, experts expectedGE’s leaders to smoothly execute the transitions. In describing the acquisition of John Wood Group PLC,for example, one Wall Street analyst noted, “This is a nice bolt-on deal for GE.”[1]In other words, thisanalyst believed that John Wood Group PLC could be seamlessly added to GE’s corporate empire. Theway that GE was organized fueled this belief.GE’s organizational structure includes six divisions, each devoted to specific product categories: (1)Energy (the most profitable division), (2) Capital (the largest division), (3) Home & Business Solutions,(4) Healthcare, (5) Aviation, and (6) Transportation. Within the Energy division, there are threesubdivisions: (1) Oil & Gas, (2) Power & Water, and (3) Energy Services. Rather than having the entireorganization involved with integrating John Wood Group PLC, Wellstream Holdings PLC, and Dresserinto GE, these three newly acquired companies would simply be added to the Oil & Gas subdivisionswithin the Energy division.In addition to the six product divisions, GE also had a division devoted to Global Growth & Operations.This division was responsible for all sales of GE products and services outside the United States. TheGlobal Growth & Operations division was very important to GE’s future. Indeed, GE’s CEO Jeffrey Immeltexpected that countries other than the United States will account for 60 percent of GE’s sales in the
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