Architecture To execute the strategy a firm adopts, the organization's architecture must reflect those strategic choices. There are many elements to be considered: structure, incentives and control systems, culture, processes, and people. The international business manager must understand each of these areas and how they affect each other. He or she must also determine how each of these areas support the firm's strategy, and how working together they further the strategic goals and objectives. No single organizational architecture works for all firms, and architecture must be adaptable.
To be a good architect, the manager must know the materials. Superior enterprise profitability requires that three conditions must be met. First, the elements of the organizational structure must be consistent with one another. Second, the organizational architecture must match or fit with the strategy of the firm. Finally, the strategy and architecture of the firm must not only be consistent with each other, but they must also make sense given the competitive conditions prevailing in the firm's markets. Strategy architecture, and competitive environment must all be consistent.
Match each element and strategic challenge to the appropriate organizational architectural term.
1. Decision Making--The location of decision-making, how the organization is divided into subunits, and how the subunits are coordinated.
2. Appropriate rewards--The devices used to reward managers running subunits.
3. How work is performed-Core competencies or valuable skills are embedded in the flow of work, which lower the costs of value creation if they are efficient and effective
4. Just like societies--Organizations have their distinctive patterns of how employees and managers act.
5. Recruitment and retention--More than just describing the employees of an organization, one must consider hiring, keeping, and compensating those employees.
6. Recruitment and retention-More than just describing the employees of an organization, one must consider hiring, keeping, and compensating those employees.
7. Responsive mechanisms--Mechanisms must not be bureaucratic, must address the concerns of subunits, and must provide for integrated, strategic responses at all levels.
8. What to measure--Making sure the desired behaviors are appropriately measured and that rewards are appropriate to encourage strategic actions.
9. Cross-border differences-Work performed in different locations must still conform to the competencies and skills that support strategy
10. Dynamic but enduring--New employees are encouraged to behave in ways that fit in with the rest of the organization. The challenge is to ensure those behaviors fit the strategic direction
11. Choosing the right managers-Recruiting the right managers including where they are from-must match the overall strategic approach