Professional Documents
Culture Documents
Chap014 Designing Market-Driven Organizations NHA
Chap014 Designing Market-Driven Organizations NHA
Designing
Market-Driven
Organizations
Very important to align the strategy and capabilities
of the organization with the market
Must reflect customer value requirements
in its design, roles, and activities
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Designing market-driven organizations
Issues
14-3
Trends in organization design (1)
Suitable organization design is imperative for successful corporate strategy
Traditional structures
* Consist of business units, controlled by a
central authority (head office)
* Centralized, vertical, “command and control”
* Create barriers to the spread of knowledge
* Ideas and commands flow vertically
* Creating “silos” with little communication
across business units
14-4
Trends in organization design (1)
Suitable organization design is imperative for successful corporate strategy
14-5
Trends in organization design (1)
Suitable organization design is imperative for successful corporate strategy
14-6
Trends in organization design (1)
Suitable organization design is imperative for successful corporate strategy
14-7
Alternative Organizational Structures
Traditional
Hierarchy
Process
Overlay
Functional
Structure
Process
Structure
Functional
Overlay Horizontal
Structure
14-8
Process-based organizational structure
14-9
Trends in organization design (2)
14-10
Organizing for market-driven strategy (1)
14-11
Organizing for market-driven strategy (2)
14-12
Customer-based front-end organization
Senior Management
Mediation
from the
center
14-13
Organizing for market-driven strategy (3)
examples
14-14
Organizing for market-driven strategy (4)
* Marketing as cross-functional process
* A process perspective underlines the cross-functional
role of marketing
* Working across traditional boundaries to develop and
implement strategy
* Challenges of achieving integration – depends on strong
linkages between marketing and other functional units
* Finance/accounting
* Operations
* Sales
* R&D
* Customer service
* Human resource management
* Various approaches to achieving effective integration
14-15
Marketing departments
Marketing capabilities and competencies in an organization are
important resources that create value in a company
Not necessary to have conventional mktg dept!
14-16
Organizing Concepts
Classic view of 4 organizing
Centralized
concepts
Formalized
Nonspecialized
BUREAUCRATIC TRANSACTIONAL
Internal External
(hierarchical) (market)
Organization Organization
of Activity of Activity
ORGANIC RELATIONAL
Decentralized
Nonformalized
Specialized
14-17
Structuring marketing resources (1)
Structuring array of marketing resources in a formal organization design involves
important management choices
* Structuring issues
* Specialist functions are attractive because they develop expertise, resources,
and skills in a particular activity
* Emphasis on functions may be less appropriate when trying to direct activities
toward target markets, products and customers
* Major forms of marketing organizational designs
* Functional organizational design
* Product-focused design
* Product/brand management
* Category management
* Venture teams
* New product teams
* Market-focused design – used when a business unit serves more than 1 market target
* Matrix design – cross-classification approach to emphasize 2 different factors such as
products & marketing functions
14-18
Traditional Marketing Organization Designs
Functional
Market-
Focused
14-19
Product-Focused Structure
14-20
Marketing Organization Based on a
Combination of Functions and Products
14-21
Structuring marketing resources (2)
Self-managing teams Business process Information
emphasis technology application
14-22
New organizational structure for marketing
Vice President
of Marketing
Director of Chief
Product Customer
Management Officer
14-23
The Marketing Coalition Company
Source: Ravi S Achrol, “Evolution of the Marketing Organization: New Forms for Turbulent
Environments”, Journal of Marketing, October 1991, 88.
14-24
Organizing for global marketing and
global customers
* Key issue
* The degree to which products and marketing
strategies and programs are standardized
across domestic and international markets,
* as compared to being adapted to local
requirements
* Critical importance
* Developing global customers
14-25
14-26
14-27
Organizing for global marketing and
global customers (1)
* Organizing for global marketing strategies
* Buyers differ in their needs, preferences, and priorities –
* Marketing strategies often require sensitivity to cultural and
linguistic difference
* Language and distance barriers complicate organizational
relationships
* Important issue – recognize when standardized marketing
strategies can be used, and when they must be modified
* 3 possible organization designs in international operations –
1. a global product division;
2. geographical divisions;
3. a matrix design incorporating 1 or 2 in combination with centralized
functional support
14-28
14-29