The Star Model refers to a framework that guides the assessment, planning and implementation of organizational change to ensure sustainable performance improvement. In this model, there are five elements which are strategy, structure, processes and lateral capability, reward system, and people practices.
According to Liang (2009), strategy can be referred as the new direction an organization is taking in response to environmental forces, which can be defined by a set of strategic business objectives and a high-level vision for achieving those objectives. Next component to be concerned in Star Model is structure. Structure is defined as the official authority relationship and grouping of activities as represented on an organization plan (Palmer, 1957). Based on the research, structure is also refer to the changes to organizational design and lines of reporting that will be encouraged by the new strategy, such as the distribution of power between the level of centralisation and decentralisation.
Thirdly, processes and lateral capability. It means the formal or informal processes that coordinate activities throughout the organization. According to Galbraith (1973), processes and lateral capability also refer to the flow of information and decision processes across the organisation’s structure. Processes can be either vertical through planning and budgeting, or horizontal through lateral relationships. Next will be the reward systems.
It takes to align individual action to organizational practices which means systems that influence the motivation of organisation members to make employees’ targets in line with the organisation’s objectives (Palmer, 1957). Finally, people practices would be the last component. They are the combined human resource practices of the organization.
Based on Liang (2009), people practices can be referred as the changes to the employees’ roles, responsibilities and skill sets of individuals in the organization that result from implementing the new strategy. These five factors in Star Model must be internally consistent to enable effective behaviour.