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Decision Tools Included on the CD-ROM ix Introduction xi The Authors xv 1 Fundamentals of Organization Design 1 The Star ModelTM: A Framework for Decision Making 2 Strategy 5 Organizational Capabilities: Translating Strategy into Design Criteria 6 Structure 8 Processes 16 Rewards 21 People 22 Design Principles 23 Requisite Complexity 23 Complementary Sets of Choices 23 Coherence, Not Uniformity 24 Active Leadership 24 Reconfigurability 24 Evolve, Do Not Install 24 Start with the Lightest Coordinating Mechanism 25 Make Interfaces Clear 25 Organize Rather Than Reorganize 25 2 Designing Around the Customer 27 Customer-Centric Strategies 28 What Is Customer-Centric? 28 Strategy 29 Structure 29 Process 30 Rewards 30 People 30 The Drive Toward Customer-Centricity 31 Customer-Centric Strategies 33 Customer Profitability and Segmentation 36 Customer-Centric Organizations 38 Strategy Locator: How Customer-Centric Do You Need to Be? 38 Customer-Centric Capabilities 41 Customer-Centric Light 42 Customer-Centric Medium 49 Customer-Centric Intensive 57 3 Organizing Across Borders 69 Levels of International Strategy 71 Level
1: Export 71 Level
2: Partner 72 Level
3: Geographic 73 Level
4: Multidimensional Network 73 Level
5: Transnational 73 Design Considerations: Geographic 74 Geographic Example: Cemex 76 Structure 76 Processes 83 Rewards 87 People 87 Design Considerations: Multidimensional Network 89 Strategy 90 Structure 91 Processes 95 Rewards 100 People 101 Design Considerations: Transnational 103 Strategy 104 Structure 104 Processes 105 Rewards 107 People 107 4 Making a Matrix Work 109 What Is a Matrix? 110 Strategic Reasons to Use a Matrix 112 Challenges of a Matrix 113 Matrix Design 116 Structure 116 Processes 126 Rewards 134 People 137 5 Solving the Centralization--Decentralization Dilemma 141 Corporate Center Strategy 143 Understanding the Business Portfolio 144 Portfolio Diversity 145 Organizational Implications of the Business Portfolio Strategy 147 Role of the Corporate Center 149 Size of Corporate Staff 151 Centralization and Decentralization 152 Definitions 152 Strategic Reasons for Centralization 154 Strategic Reasons for Decentralization 156 Predictable Problems of Centralization 158 Predictable Problems of Decentralization 160 Making an Explicit Choice 161 Getting the Best of Both: A Balancing Act 163 Structure 165 Processes 167 Rewards 171 People 171 6 Organizing for Innovation 173 Innovation Strategies 175 Sustaining Innovation 176 Breakthrough Innovation 176 Innovation Capabilities 178 Innovation Process 178 Portfolio Management 180 Balancing Separation and Linkage 180 Designing for Breakthrough Innovation 181 MeadWestvaco Specialty Chemicals Division 182 Structure 184 Processes 190 Rewards 196 People 199 7 Conclusion 203 Appendix: Decision Tools 207 Bibliography 245 Index 249 How to Use the CD-ROM 255