Reading notes: Peter Drucker's "Understanding Management" Chapter 34 Structure and Strategy

1. Overview of Chapter Contents

Twice in the short history of modern management we believed we had found the right answer. One was the “functional organization” constructed by Henri Fayol during World War I, and the other was the “federal organization” constructed by Alfred Sloan a generation later. Under appropriate fields and conditions, these two forms of organizational structure are still the best answers we can find, but increasingly we have to build organizations in areas where neither form of organizational structure is suitable. Without developing additional organizational design principles, we already have 5 principles.

Over the past 75 years, we have learned a great deal about organizational structure. We learned the specifics of effective organizational structure and that three different types of work must be organized within an organizational structure. The three different types of jobs are: operational jobs, top management jobs, and innovative jobs. We also learned that structure follows strategy, so structure is not mechanical but must start from the purpose and goals of the organization and be anchored in the key operations required to achieve the goals. We've learned that designing an organization begins with organizing its building blocks, knowing which businesses should be brought together and which should be separated, knowing what pathologies the organization will suffer from, and knowing that there is no one final answer.

A sound organizational structure does not ensure excellent performance, but an improper or mismatched organizational structure will certainly harm performance, and performance is a test of the organizational structure.

2. Chapter Question Set

Question 1:In the development process of a company, when does the organizational structure become the top priority?

In the development process of an enterprise, the importance of organizational structure is mainly reflected in the following situations:

1. Strategic adjustment: When a company faces strategic adjustment, such as shifting from a defensive strategy to an offensive strategy, or from a low-cost strategy to a differentiation strategy, the organizational structure may need to make corresponding adjustments. For example, it may be necessary to add an R&D department or a marketing department, or to split the production department into several smaller units to increase efficiency.
2. Business expansion: When an enterprise's business scope expands, the organizational structure also needs to be adjusted accordingly to adapt to new business needs. For example, when a business expands from a single product line to multiple product lines, it may need to add a product management department or a sales department.
3. Poor performance: When a company's performance is poor, especially when its performance declines to the point that it affects the company's survival, the organizational structure often becomes the focus of adjustment. At this time, the company may redesign the organizational structure to improve efficiency, such as reducing management levels, merging functional departments, or changing decision-making processes.
4. Changes in the external environment: When the external environment of an enterprise changes, such as technological innovation, intensified market competition, or changes in policies and regulations, the organizational structure also needs to be adjusted accordingly. For example, when digital technologies emerge, companies may need to add digital departments or digitally transform existing departments.
5. Enterprise transformation: When an enterprise faces transformation needs, such as shifting from traditional manufacturing to service industry or from offline sales to online sales, the organizational structure also needs to make fundamental changes. For example, it might be necessary to add a customer service department or an e-commerce department, or to merge production and sales into an operations department.

In short, organizational structure is of great significance in the development process of an enterprise. It not only needs to adapt to the current needs of the enterprise, but also needs to be flexible and scalable enough to cope with future challenges and opportunities. Therefore, in the process of enterprise development, it is crucial to adjust the organizational structure in a timely manner.

Question 2:Henry·What is the organizational structure constructed by Fayol ?

Henry·The organizational structure constructed by Fayol is a functional system. This is the first person to comprehensively consider organizational structure issues and design an enterprise organization. rational way.

Question 3:Alfred·How did Sloan organize Fayol’s organizational structure Applied to large enterprise organizations with complex businesses?

Alfred·Sloan successfully implemented Fayol's organizational structure by applying it to large corporate organizations with complex business operations. efficient management of the enterprise. He first divided the corporate organizational structure into three levels: strategic planning level, intermediate control level and execution level. These three levels respectively correspond to the three main components in Fayol's organizational structure theory: top management, middle management and grassroots management.

At the strategic planning level, Sloan introduced a committee system to ensure that the formulation and implementation of strategic plans are more scientific and reasonable through collective discussion and decision-making. This system also strengthens communication and coordination between different departments and is conducive to maximizing the overall interests of the enterprise.

At the intermediate control level, Sloan drew on the functional system in Fayol's organizational structure theory and divided the enterprise organization into different functional departments, such as production, sales, finance, etc., each department has clear responsibilities and powers. This functional organizational structure enables enterprises to better cope with complex and changing market environments and improves their flexibility and adaptability.

At the executive level, Sloan drew on the decentralization system in Fayol's organizational structure theory, dividing the enterprise into different business departments, each department having relatively independent operating rights and decision-making rights. This decentralized organizational structure enables companies to better respond to market changes and improves their response speed and innovation capabilities.

Through the above measures, Alfred·Sloan successfully applied Fayol’s organizational structure theory to large and complex businesses. Enterprise organization realizes efficient management and rapid development of enterprises. This also provided important reference and inspiration for subsequent business managers.

Question 4:Why is the organizational structure constructed by Fayol and Sloan not applicable to today’s reality?

The organizational structure constructed by Fayol and Sloan was based on the historical background, socioeconomic conditions, and corporate environment of the time and therefore may not be applicable to today's reality.

First of all, Fayol's organizational structure theory is based on the factory organizational structure during the Industrial Revolution, which emphasizes functional division of labor and hierarchical management. However, as time goes by, the scale of the enterprise continues to expand and the complexity of the business increases, the disadvantages of this organizational structure gradually become apparent. For example, too many levels and departments may lead to problems such as poor information transmission, inefficient decision-making, and difficulties in inter-departmental coordination.

Secondly, the organizational structure built by Sloan focuses on product lines and management control. This structure is suitable for enterprises with multiple products and multiple markets. However, in today's environment of globalization and increasingly fierce market competition, companies need more flexible organizational structures to respond to rapidly changing market demands and competition.

In addition, the challenges facing businesses today are different from those in the days of Fayol and Sloan. For example, with the development of information technology, companies need to pay more attention to digital transformation and the improvement of innovation capabilities; at the same time, with the increase in employee participation and the diversification of employee needs, companies need to pay more attention to the work experience and welfare of employees.

To sum up, the organizational structure constructed by Fayol and Sloan is no longer fully applicable to today's reality. Enterprises need to constantly adjust and improve their organizational structure according to their actual situation and environment to adapt to market changes and development needs.

Question 5:“Conclusion strategy” Contains is it?

“Structure follows strategy” means that the organizational structure of an enterprise should be based on its strategy Adjust and change. This is because strategy is the method by which a company achieves its goals, and organizational structure is the basis for a company to achieve its strategy. If the enterprise's organizational structure does not adapt to its strategy, then the enterprise's strategy will be difficult to achieve, so the organizational structure must be adjusted to meet the needs of the strategy.

Specifically, the company's organizational structure should be able to support the implementation of its strategy, including providing clear responsibilities and rights, supporting the company's business processes, and supporting the company's products and services. If the company's organizational structure cannot provide these supports, then the company's strategy will be difficult to achieve, so adjustments and changes must be made.

In addition, the organizational structure of the enterprise must also be able to adapt to market changes and competitive pressures. If an enterprise's organizational structure cannot adapt to market changes and competitive pressures, it will be difficult for the enterprise to maintain its competitiveness and profitability, and therefore adjustments and changes must be made.

In short, "structure follows strategy" means Yes, the enterprise's organizational structure must be adjusted and changed according to changes in its strategy and market environment to support the enterprise's strategic implementation and market competition.

Question 6:What are the three different types of jobs?

Three different types of jobs include:

1. Repetitive jobs: These jobs typically involve performing a series of repetitive, mechanical tasks, such as an assembly line worker, a typist, or a telephone customer service representative. These jobs require a high degree of concentration, patience, and accuracy, but often do not require much thought and judgment.
2. Creative work: This type of work usually requires the use of personal creativity and imagination, such as artists, designers, researchers or writers. These jobs require in-depth understanding and expertise in a certain field, as well as the ability to think independently and innovate.
3. Social jobs: These jobs typically require communication and interaction with others, such as teachers, salespeople, or social workers. These jobs require strong communication skills, interpersonal skills, and empathy in order to relate well to others and meet their needs.

In addition, there are some jobs that may fall into one or two of the above three categories, such as repetitive jobs that require mechanical skills but also require some simple judgments, or that require interaction with others but also require some data analysis. social work.

Question 7:What are three useless arguments raised by organizational theorists?Why are these arguments Should not be considered an“either-or” choice< /span>?

The three pointless arguments raised by organizational theorists are:1) How organizational structures should be designed;2) How large should the organization be? 3) How should organizational performance be measured. These views should not be considered as“either/span> choices, as they are not mutually exclusive but can be combined together. For example, different types of organizational structures can be combined in one organization to suit different departments or different business needs. Likewise, organization size can be adjusted based on the organization's needs and resources. Finally, the measurement of organizational performance involves not only financial indicators, but also non-financial indicators, such as customer satisfaction, employee satisfaction, and innovation capabilities. Therefore, these perspectives are not mutually exclusive but can be combined to achieve optimal organizational performance. ”

Question 8:“Free type organization”Yes Tithe intention?

“Free organization” refers to a relatively open and free working environment, emphasizing Employee autonomy, self-management and self-decision. In this organizational form, employees have more decision-making power and autonomy, can participate in the organization's decision-making and management, and realize their self-worth.

Characteristics of free organizations include:

1. Open working environment: Employees can work in an open, free space without fixed seats or cubicles, and can adjust their workplace at any time according to their needs.
2. Autonomous decision-making and self-management: Employees can participate in the organization's decision-making and management, and can independently arrange work plans and schedules, as well as how to cooperate with other employees.
3. Flexible work processes: Freeform organizations usually do not have fixed processes and procedures, and employees can adjust their work processes at any time as needed to complete tasks faster and respond to changes.
4. Emphasis on teamwork: Free organizations emphasize teamwork and collaboration. Employees can collaborate and communicate more closely to promote efficient completion of work.
5. Pay attention to employees' personal growth: Free organizations encourage employees' personal growth and development and provide employees with more opportunities and resources to improve their skills and abilities.

In short, “Free organization” is a A relatively open and free working environment that emphasizes employee autonomy, self-management and self-decision, aiming to improve the organization's flexibility and efficiency while promoting employees' personal growth and development.

Question 9:In the past30 years, three major new organizational designs have emerged What is the principle?

Over the past 3030 years, three major organizational design principles have emerged:

1. Flattening: With the development of information technology, organizational design has begun to develop in the direction of flattening, that is, reducing organizational levels to make the organizational structure more compact and flexible. This design principle emphasizes faster decision-making, increased organizational responsiveness and flexibility, and enhanced communication and collaboration among employees.
2. Processing: Processing refers to decomposing an organization's business processes according to a certain logical sequence to form a series of relatively independent work tasks or work links. This design principle emphasizes the optimization and improvement of business processes to increase the efficiency and effectiveness of the organization.
3. Networking: Networking refers to establishing network connections between various departments or members within an organization to form a collaborative work pattern. This design principle emphasizes maximizing the overall benefits of the organization through information sharing, win-win cooperation, resource integration, etc.

These three organizational design principles have been widely used in practice and are of great significance in improving the efficiency and adaptability of organizations. However, each principle has its scope and limitations and needs to be selected and applied based on the specific circumstances of the organization.

Question 10:What issues should organizers consider when designing the organizational elements?

When designing the building blocks of an organization, organizers need to consider the following key questions:

1. Organizational Purpose and Objectives: What does the organization exist to achieve? What is its purpose? Every organization has its specific purpose and goals, which determine what actions the organization needs to take to achieve those goals.
2. The strategic direction of the organization: What strategies does the organization need to pursue to achieve its goals? How should these strategies guide the organization's actions?
3. Structure of the organization: How does the structure of the organization affect its operations? What factors need to be considered when designing an organizational structure? For example, the size of the organization, industry characteristics, business scope, etc.
4. Organizational Human Resources: What types of talent does the organization need to achieve its goals? How to attract and retain these talents?
5. Organizational processes and operations: What processes and operations does the organization need to effectively achieve its goals? How should these processes and operations be optimized?
6. Organizational Performance Appraisal: How to evaluate the performance of an organization? What kind of performance evaluation system should be established? How to motivate employees and improve work efficiency?
7. Organizational communication mechanism: How to ensure effective communication within and outside the organization? How to establish a good communication mechanism?
8. Organization’s Culture: How does an organization’s culture influence its operations? How to build a positive cultural atmosphere?

In short, organizers need to consider the constituent elements of the organization from multiple perspectives to ensure the successful operation of the organization.

Question 11:What are the four major types of businesses that need to be considered when conducting contribution analysis?

When conducting contribution analysis, the following four major categories of business need to be considered:

1. Marketing: Understand market needs, sell products to consumers, provide services to consumers, and ensure successful sales of products in the market.
2. Innovation: Developing new products or services to meet consumer needs and gain market share.
3. Productivity: Optimize the production process, reduce costs, improve product quality and production efficiency to obtain more profits.
4. Capital Management: Effectively manage funds to ensure the company's financial stability and invest in projects that will bring long-term returns.

These business types are critical to a business's success, are interconnected and work together to drive its growth.

Question 12:What is the difference between business that produces results and business that contributes to results?

The difference between businesses that produce results and those that contribute to results lies primarily in their roles and responsibilities in achieving corporate goals.

Businesses that generate results usually refer to departments or business units that directly create corporate revenue, such as sales departments, production departments, or service departments. These business units typically have clear revenue and profit targets and are directly responsible for the overall bottom line of the business. Their behaviors and decisions directly affect the economic performance and operational effects of the enterprise.

The businesses that contribute to results usually refer to those departments or business units that create value for the enterprise but do not directly realize revenue, such as human resources departments, finance departments, marketing departments, etc. The responsibilities of these departments or business units are usually to support and manage the company's internal operations, employee benefits, marketing, financial management, etc., to help the company achieve its strategic goals and long-term development.

Although these departments or business units do not directly generate revenue, their work and decisions have a significant impact on the overall performance and results of the business. For example, the human resources department can improve employee quality through recruitment and training, thereby improving production efficiency and product quality; the finance department can ensure the safety and effective use of the company's funds through financial management and risk control; the marketing department can increase brand awareness and promotion through marketing market share, thereby attracting more consumers and increasing sales.

Therefore, although the business that produces results and the business that contributes to results play different roles in achieving corporate goals, they are both important parts of the business and are critical to the successful operation and long-term development of the business.

Question 13:What are examples of conscience business?

Conscientious business means that a company adheres to ethical principles such as honesty, fairness, and social responsibility in its business operations, and conducts business in an honest, transparent, and conscientious manner. Here are some examples of ethical business:

1. JD.com: As an e-commerce platform, JD.com has always been committed to providing high-quality goods and services and strictly cracking down on counterfeit and shoddy goods. In order to ensure product quality, JD.com has taken a variety of measures, such as establishing a strict audit system, conducting real-name authentication of sellers, and setting up a quality inspection department. At the same time, JD.com also actively responds to national policies and promotes corporate social responsibility, such as donating to public welfare projects and supporting educational undertakings.
2. SF Express: As an express delivery company, SF Express always adheres to customer-centeredness in the service process and conducts business in an honest, transparent and conscientious manner. SF Express strictly controls the quality during the transportation of goods to ensure that the goods reach their destination safely. At the same time, SF Express also actively assumes social responsibilities, such as supporting public welfare undertakings, donating money and materials, etc.
3. Starbucks: As a coffee chain, Starbucks has always been committed to providing high-quality coffee and service. Starbucks adheres to the principles of integrity, transparency, and conscience in its operations, and conducts strict training and assessment of employees to ensure that employees provide high-quality services. At the same time, Starbucks also actively pays attention to environmental protection and social responsibility, such as using environmentally friendly materials to make coffee cups and supporting public welfare undertakings.
4. Walmart: As a retail giant, Walmart has always been committed to providing high-quality and affordable goods and services. Walmart adheres to the principles of integrity, transparency, and conscience in its business operations, and conducts strict audits and supervision of suppliers to ensure that suppliers provide high-quality products. At the same time, Wal-Mart also actively assumes social responsibilities, such as supporting public welfare undertakings, donating money and materials, etc.

These enterprises are examples of conscientious business. They not only pursue economic benefits during their operations, but also pay attention to ethics and social responsibility. Through honest, transparent and conscientious business practices, these companies have won the trust and support of consumers and made positive contributions to society.

Question 14:Why is it a good idea to put logistics in the hands of the work community?

Putting the logistics in the hands of the work community is a good idea for the following reasons:

1. Improved efficiency: A work community is a group of people working in the same location who can communicate and coordinate their work more easily, thereby improving work efficiency. By handing over logistics operations to the working community, communication and coordination costs can be reduced and work efficiency improved.
2. Enhance team cohesion: Members of a work community are usually colleagues or classmates who share common goals and interests. By sharing logistical tasks, team cohesion can be enhanced and employee satisfaction and loyalty increased.
3. Develop leadership skills: In logistics work, employees can develop their leadership and organizational skills. By taking on logistical tasks, employees can better understand the company's operations and processes and improve their management capabilities.
4. Reduced costs: Putting logistics operations in the hands of the work community can reduce costs. Since members of a work community are often people who work in the same location, rental and property costs can be reduced. In addition, operational costs can be reduced by optimizing processes and reducing waste.
5. Improved quality of service: By offloading logistics to the working community, the quality of service can be improved. Members of a work community are typically professionals or people with specific skills who can better understand a company's needs and provide better services. In addition, by optimizing processes and improving communication, the consistency and quality of services can be improved.

In summary, handing over logistics operations to the work community can bring many benefits, including increased efficiency, enhanced team cohesion, development of leadership skills, reduced costs and improved service quality. Therefore, this is a good idea to consider.

Question 15:What are the four basic characteristics that determine the nature of any decision in a business?

The nature of any decision in an enterprise is usually determined by four basic characteristics: goals, resources, constraints and priorities.

1. Goal: Any decision needs to have a clear goal. This goal can be long-term, such as achieving the business's vision and mission, or short-term, such as increasing sales or reducing costs. Goals provide direction and measurement for decision-making.
2. Resources: In order to achieve goals, companies need to utilize various resources, including human, material, financial, time, etc. Decisions need to take into account the availability and limitation of resources, so resources need to be allocated and utilized appropriately.
3. Constraints: Decision-making will be restricted by various constraints, such as laws and regulations, ethics, market competition, technical capabilities, etc. These constraints prevent decisions from being arbitrary and require trade-offs based on the actual situation.
4. Prioritization: Under multiple goals or multiple constraints, enterprises need to prioritize. Prioritization requires consideration of various factors such as importance and urgency, long-term and short-term impact, etc. Correct prioritization can enable enterprises to achieve maximum benefits with limited resources.

These four basic characteristics are interrelated and influence each other. When making decisions, companies need to comprehensively consider these characteristics to make reasonable, scientific and effective decisions.

Question 16:What are the diseases of organizations?

Tissue disorders often include the following:

1. Bloated organization: The organizational structure is too complex and personnel are redundant, resulting in a waste of resources and increased management difficulty.
2. Poor communication: There is a lack of effective communication between various departments, resulting in poor information flow and difficulty in collaboration.
3. Inefficient decision-making: The organization’s decision-making process is slow and the quality of decisions is low, resulting in missed market opportunities.
4. Insufficient innovation: The organization lacks innovation awareness and innovation capabilities, resulting in the inability to adapt to market changes and customer needs.
5. Low employee satisfaction: Employees are dissatisfied with the organization's management and working environment, resulting in low employee morale and low work efficiency.
6. Poor organizational culture: The organization lacks a positive cultural atmosphere, resulting in employees lacking a sense of belonging and cohesion.
7. Poor organizational performance: The overall performance level of the organization is not high and cannot meet customer needs and market expectations.

The above are common organizational diseases, and different companies have more or less problems. Therefore, companies need to regularly diagnose and optimize the organization to keep the organization healthy and operating efficiently.