Strategy 11
Cost-Benefit for Different Decision
Structures
Decisionmaking
Structure
Total costs of
communication
Actual benefits
of remote
information
All other costs
(trust,
motivation,
etc.)
Independent
Low
Low
Depends
Centralized
Medium
High
Depends
Decentralized
High
High
Depends
Decision-making structures for
different types of decisions
IT and the Evolution of
Organizational Structure
• High communication costs favor the
independent structure
• Medium communication costs may favor a
hierarchy
• As communication costs fall, decentralized
structures are favored
Values in Business
• Malone’s exercise and personal mission
statements
– Contemplation of death or a near death
experience as a way of understanding life
– “The unexamined life is not worth living.” –
Socrates
– What we do and what we actually care about
Values in Business
• Do we ‘work to live’ or ‘live to work’?
• Is the only purpose of a business to make
money? Shareholders’ benefit
• If you are uncomfortable discussing values
in business, do you consider that it is
possible to divorce the two?
Values and Strategy
• Where do values fit into strategy and
planning?
– How does establishing values differ between a
hierarchical organization and one that is
decentralized?
• We have discussed strategy as operating
for different units of analysis (the
individual, a company, a city, a country).
How do values scale up and down?
Cultivating Values
• Idries Shah quote
– Person and environment
• Schumacher quote from Small is Beautiful
Balanced Scorecard
Compaq
• What should we know about Compaq in
order to understand the company?
– Their origin
– The PC industry
– Digital Equipment Corporation
– Dell
Compaq 1997
•
•
•
•
Learning and Innovation
Business Processes
Customer Results
Financial Results
Compaq 1997
•
•
•
•
Learning and Innovation
Business Processes
Customer Results
Financial Results
Compaq
• Does Compaq’s experience tell us anything
about strategy?
Web Services
• What are web services?
• What might they have to do with strategy?
With IT strategy?
Web Services – Balanced Scorecard