EcoMerc

Strategic Organizational Consulting

Detailed discussion of organizational and strategic misfits

The OrgCondiagnosis of an organization's design typically describes three types of misfits : strategic, contingency, and organizational (design parameter).

Strategic misfits occur when the design situations are not internally consistent. OrgCon does not provide recommendations for correcting strategic misfits.


OrgCon identified three strategic misfits in Medtronic:

  1. High product diversity may be a misfit with a prospector strategy. Usually it is very costly only to have many new products and high product innovation.
  2. Medtronic has a group climate. This does not fit well with the very unpredictable environment. A group climate has a high ressistance to change. It may most likely not be able to engage fast enough the required adjustments.
  3. Medtronic has a group climate. This is a mismatch with a prospector strategy! A group climate has high resistance to change. A prospector strategy is committed to changes.

Contingency misfits exist when the situational factors of a company are not in alignment with the organizational structure. OrgCon does not provide recommendations for correcting contingency misfits.

OrgCon identified X contingency mistfits in Medtronic:

  1. A group climate is misfit with a high degree of complexity. The separation of jobs into rigid specialization is not likely to support or be supported by a group climate.
  2. The low degree of routine technology requires a much less specialized organizational structure than is given with the current high degree of complexity.
  3. The high degree of specialization suggested by the high degree of complexity may hamper the product innovation. Thus the high degree of complexity is a misfit with a prospector strategy.

Organizational misfits are said to exist whenever the level of an organization design parameter differs from the level recommended by OrgCon . OrgCon provides recommendations for correcting organizational misfits.

OrgCon identified three organizational misfits in Medtronic:

  1. Current and prescribed complexity do not match.
  2. Current and prescribed formalization do not match.
  3. Current and prescribed centralization do not match.

The OrgCon diagnosis for Medtronic determined that there was one organizational design parameter misfit related to the level of formalization. Specifically, the current and prescribed formalization do not match. Current formalization is medium (cf 89) while the recommended level is low (cf 64). The table below summarizes all recommendations for low formalization.

The configuration recommendation is probably the weakest of the group. OrgCon found that Medtronic’s current configuration was most likely a matrix but could also be an adhocracy. An adhocracy should have low formalization. The other five recommendations must be seriously considered, however.

When we re-examine the conditions within Medtronic that contribute to the misfit, we can conclude that it is probably the following factors which make the formalization higher than  OrgCon recommends:

  • The existence of job descriptions for virtually all employees: operational, lower and middle management, and some senior management
  • The high percentage of non-managerial employees that are given written operating instructions for their jobs
  • The large percent of rules and procedures that exist within the organization in writing

OrgCon´s recommendations for elimination of this misfit are a reduction in the number of written job descriptions and in the number of positions for which job descriptions are available. The latter recommendation may be achieved by different means. It may be as simple as discarding the job descriptions for existing positions or it may mean eliminating positions completely, possibly through recombination or redesign. It should not be interpreted as a directive to fire employees that have positions with job descriptions.