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Organizational Design and Strategy in a Changing Global Environment - Introduction - Business-level strategy

4 important questions on Organizational Design and Strategy in a Changing Global Environment - Introduction - Business-level strategy

The challenge of a business-level strategy is

for an organization to take the core competences created by its functions and combine them to take advantage of opportunities in the environment to create value.

Once an organization ahs chosen its domain it has two bases on which it can position itself to compete with its rivals.

It can use its skills in low-cost value creation to produce for a customer group that wants low-prices goods and services à Low-cost business-level strategy: A plan whereby an organization produces low-priced goods and services for all customer groups.
It can use skills at differentiation to produce for a customer group that wants and can afford differentiated products that command a high or premium price à Differentiation business-level strategy: A plan whereby an organization produces high-priced, quality products aimed at particular market segments.

Three factors affect an organization’s choice of a structure to create competitive advantage for itself:

As an organization produces a wider range of products, it will need greater control over the development, marketing, and production of these products.
As an organization seeks to find new customer groups for its products, it will need a structure that allows it serve the needs of its customers.
As the pace of new product development in an industry increases, an organization will need a structure that increases coordination among its functions.

Business-level strategy and culture

Organizational culture is another major determinant of the ability to use functional organizational resources effectively. The challenge at the business level is to develop organization-wide values, and specific norms and rules, all which allow the organization to combine and use its functional resources to the best advantage.

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Organizational Theory & design

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Organizational Design and Strategy in a Changing Global Environment - Introduction - Business-level strategy

4 important questions on Organizational Design and Strategy in a Changing Global Environment - Introduction - Business-level strategy

The challenge of a business-level strategy is

Once an organization ahs chosen its domain it has two bases on which it can position itself to compete with its rivals.

Three factors affect an organization’s choice of a structure to create competitive advantage for itself:

Business-level strategy and culture

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