ORGANIZATIONA

L AGILITY
Chapter 9

(Mamoona Arshad)
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CHAPTER OUTLINE
What would be learn?

Discuss why it is critical for organizations to be responsive?

• Identify strategies that can improve organizational responsiveness.

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 Organizational Agility

• Organizational agility- An ability for an organization

to renew itself, adapt, change quickly, and succeed in a Dynamic
rapidly changing, ambiguous, turbulent environment. capability

• Dynamic capability: the ability to move fast—speed,

and responsiveness Agility
• Stability: a stable foundation—a platform, things that require 2
don’t change. A stable backbone that becomes a things
springboard for the company.

Stability

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 How important is agility to your
organization's overall business success?
(In percentage)

POLL
 How important is agility to your
organization's overall business success?
(In percentage)

POLL 40%
RESPONSIVE ORGANIZATION
Mechanistic structures
• a bureaucratic structure,
• Characteristics of mechanistic structures include: Well-defined hierarchy. Top-level managers
make the majority of decisions.

Organic structure
 structures that emphasizes flexibility.

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ORGANIC STRUCTURE
Characteristics
• Job holders have broader responsibilities that change as need arises.
• Communication occurs through advice & information rather than orders & instructions.
• Decision making and influence are decentralized and informal.
• Expertise is highly valued.
• Commitment to the organizational goals is more important that obedience to authority.
• Employees are more interdependent, relate more informally & personally – Autonomy.

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Informal Organizational
Structure

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CONT..
Improving agility

• refine organizational processes – through utilizing knowledge.

• simplify and integrate the processes that support their growth.
• respond to changing customer needs.
• Executives mostly emphasize on change management, outsourcing (hiring another company for
actions or transferring employees), automation.

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 Uncertainty Condition in which future environmental
circumstances affecting an organization cannot be
Environment
accurately assessed and predicted.
characteristics
:

Environmental Complexity
Number of elements in an organization's
environment and their degree of similarity (high
complex means more variables: industry size,
market share, suppliers, manufacturers)
Environmental Dynamism
Rate and predictability of change in the elements of
an organization's environment (high change, more
dynamic)

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 Assessing
uncertaint
y

PPTs t/a Management: A Pacific

Rim Focus 4e by Bartol, Tein,
Matthews, Martin

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CONT..
Core capability
• is the knowledge, expertise, or skill that underlies a company’s ability to be a leader in providing a
range of goods or services.
i. Ordinary capabilities
• Capabilities pertaining to basic administrative and operational functions
• provide temporary competitive advantage in quality, speed, and efficiency, but are easy to imitate.
ii. Dynamic capabilities
• Higher-level strategic capabilities (compared with ordinary capabilities) that aid rapid adaptation.
• more emphasis on innovation, gives value to customers.
• E.g. Canon’s core capability is innovative image technology.

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OTHER STRATEGIES
Strategic Alliances
• A formal relationship created among independent
organizations with the purpose of joint pursuit of mutual
goals.
• allow participants to respond to customer demands or
environmental threats far faster and less expensively than
each would be able to do on its own.
• E.g. Google and Intel – smart watch

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CONT..
Best
Alliances

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STRATEGIC ALLIANCES
Examples
• Nokia and Microsoft in alliance to make Zune phone
• Star Alliance — Airlines alliances.
• Nestlé and Fonterra Sign Agreement on Dairy Alliance for the America
• McDonald's with Disney, Coca-Cola & Walmart
• Motorola-Toshiba: In 1987- Toshiba to produce microprocessors & contribute access to the
distribution network.

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Organizational Size and Agility
Big organizations
• Large organizations tend to be less organic and more bureaucratic
• Large companies create economies of scale (low cost per unit), buy in bulks, easier access to
capital.
• Coordination and control difficulties.
• Organizations can still find ways to remain agile despite these challenges

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Organizational Size and Agility
Small organizations
• Can move fast,
• provide good quality and services by targeting a market niche.
• Word of mouth makes it grow.
• Can also enjoy power if find an area to grow.
• Small organization has some benefits but large enjoy market power.
• Companies often stumbled when customers demand high quality. E.g. sales flattened out.

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CONT..
The Learning Organization
• A company that facilitates the learning of its members and continuously transforms itself.
• Can do so through creating, acquiring, and transferring knowledge and at modifying its behavior to reflect
new knowledge and insights.
I. Disciplined thinking
II. Attention to details
III. Decisions based on data and evidence rather than guesswork and assumptions
IV. Search for new knowledge and ways to apply it
V. Review successes and failures to find lessons
VI. Benchmark--identify & adopt best practices
VII. Share ideas throughout organization

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CONT..
The Learning Organization - Examples

• Airlines- mostly learn from their accidents and incidents for improving flights and efficiencies.

• Toyota – used 5 whys. To identify the root cause of defects in manufacturing floor.

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CONT..
Total Quality Management (TQM)
• approach that supports the attainment of customer satisfaction through a wide variety of tools
and techniques that result in high-quality goods and services.
• Six sigma – systematically analyzing work processes to avoid defects.
Lean manufacturing
• By eliminating unnecessary steps in production process and continually striving for
improvement
ISO 9001 - A series of quality standards
• Developed by committee under International Organization for Standardization
• To improve total quality in all businesses
• For the benefit of producers and consumers.
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ISO CERTIFICATION

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ROLE OF A MANAGER

1. Accumulate right resources (e.g. people).

2. For the alliance to work, a manger should invest time in screening a potential partners. most
innovation occurred when the partners were experts in moderately different types of research.
3. Foster and develop the human relationships in the partnership that facilitate interpersonal cooperation
and coordination of activities.
4. Managers must stay focused in three key ingredients - the strategic triangle
• The company itself
• Competition
• The customer

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 Insert
Insert Image
Image

Organizations that are best able to

anticipate market movements, re-
CONCLUSIO emerge from the worst system shocks
and take advantage of gaps
N (opportunities) will be able to
withstand the burden and win.

Doing so requires organizational

agility.