Strategy In Action, Strategy Development And Organisational Learning

3182 words - 13 pages

Task 1: Critically discuss what "strategy in action" means for your organization1.1 Organizing and ResourcingThis section focuses on discussion about strategy in action for Haier. An organizational structure defines how job tasks are formally divided, grouped, and coordinated (Robbins & Judge 2007). Organizational structure and systems can influence the success of strategy implementation and is an essential aspect of what gives an organization its strategic capability. As a large MNC, Haier has business in both domestic and overseas markets; the company then geographically classified its business into many divisions. On the other hand, Haier manufactures home appliances in over 15,100 different specifications under 96 categories (Haier 2008), which are classified into several divisions in terms of different kinds of products (e.g. Refrigerator division, Air-condition division). Every division operates as a profit center and manages the market independently. But to the organizational culture, personnel deployment, investment, financial budget and final accounts, technology development, quality certification and management, market network and services, divisions must obey the coordination of the head office. The company's organization chart (see Appendix 1) shows clear structure hierarchies.Recently, Haier integrates the purchase functions, storage functions and transportation functions of every product division into a new division namely physical distribution boost headquarters that performs the said three functions of every product division, in accordance with the principle of economies of scale and specialized division of labor; integrates the functions of the domestic marketing into a new department namely business distribution boost headquarters; integrates the functions of the overseas marketing divisions into overseas boost headquarters; and integrates the functions of the finance divisions into fund flow boost headquarters. Therefore, the original product divisions become independent production and R & D departments without any other functions.In addition, the company separates all the resources that support the business from each division, such as human resources development, technology and quality management, information management, equipment management, etc, to form an independent service company.From the company's organization chart (appendix 1) and analysis above, divisional organizational structure that is one of the bureaucratic structures is used (Altayyeb 2006). Divisional structure is formed when an organization is split up into a number of self-managed units, each of which operates as a profit center or separate business (Osborn, Hunt & Jauch 1985). The goal of this kind of organizational structure is to maximize overall firm performance. This is virtually a kind of decentraliztion under high centralization (Osborn, Hunt & Jauch 1985).Haier adopts the divisional structure mainly because its flexibility in meeting...

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