| Chapter 11 : Chapter 11 Organizational Structure
and Controls Michael A. Hitt
R. Duane Ireland
Robert E. Hoskisson ©2000 South-Western College Publishing |
| Slide2 : Chapter 3 Internal Environment Chapter 2 External Environment Strategic Intent Strategic Mission Strategic Competitiveness Above Average Returns Feedback Strategy Formulation Chapter 4 Business-Level Strategy Chapter 5 Competitive Dynamics Chapter 6 Corporate-Level Strategy Chapter 8 International Strategy Chapter 9 Cooperative Strategies Chapter 7 Acquisitions & Restructuring Strategy Implementation Chapter 10 Corporate Governance Chapter 11 Structure & Control Chapter 12 Strategic Leadership Chapter 13 Entrepreneurship
& Innovation Strategic Actions |
| Slide3 : Structure Types |
| Slide4 : Strategy & Structure
Growth Patterns Sales Growth Coordination
and Control Problems Efficient implementation
of formulated strategy Multidivisional
Structure Efficient implementation
of formulated strategy Sales Growth Coordination
and Control Problems Functional
Structure Simple
Structure |
| Slide5 : Simple Structure Owner/Manager makes all major decisions directly and monitors all activities Difficult to maintain this structure as the firm grows in size and complexity |
| Slide6 : Functional Structure |
| Slide7 : Functional Structure |
| Slide8 : Functional Structure for
Cost Leadership Strategy Operations is main function
Process engineering is emphasized rather than new product R&D
Formalized procedures allow for low-cost culture
Structure is mechanical; job roles are highly structured Relatively large centralized staff coordinates functions |
| Slide9 : Functional Structure for
Differentiation Strategy Marketing is the main function for tracking new product ideas
New product R&D is emphasized
Most functions are decentralized
Formalization is limited to foster change and promote new ideas
Overall structure is organic; job roles are less structured |
| Slide10 : Multi-Divisional Structure |
| Slide11 : Multi-Divisional Structure |
| Slide12 : Multi-Divisional Structure |
| Slide13 : Variations of the
Multi-Divisional Structure Multi-Divisional
Structure
(M-form) Related-Constrained
Strategy Related-Linked
Strategy Unrelated /Holding
Company Strategy |
| Slide14 : Strategic
Planning Corporate R&D Lab CorporateHuman
Resources Legal
Affairs
CorporateMarketing Corporate
Finance Cooperative Form Related-Constrained Strategy Government
Affairs
Structural integration devices create tight links among all divisions
Large corporate office with R&D likely to be centralized
Culture emphasizes cooperative sharing |
| Slide15 : President Strategic Business Unit A SBU Form Related-Linked Strategy Strategic Business Unit C Strategic Business Unit B Strategic Business Unit D Structural integration exists among divisions within SBUs, but not across SBUs
Each SBU may have its own budget for staff to foster integration
Corporate headquarters staff serve as consultants to SBUs and divisions |
| Slide16 : Competitive Form Unrelated /Holding Company Strategy President Legal
Affairs Finance Corporate headquarters has a small staff
Finance and auditing are the most prominent functions in the headquarters
Divisions are independent and separate for financial evolution purposes
Divisions retain strategic control, but cash is managed by the corporate office
Divisions compete for corporate resources Auditing |
| Slide17 : Multi-Divisional Structure |
| Slide18 : Attributes of Various Structural Forms |
| Slide19 : North America Australia Europe Asia Latin America Africa Product A Product B Product C Product D Product A Evolution of Multi-Divisional Structure Chief Executive Officer Corporate Office (Staff) |
| Slide20 : A Structural evolution based on Geographic lines usually implies a Multi-Domestic International Strategy Evolution of Multi-Divisional Structure North America Australia Europe Asia Latin America Africa Product A Product B Product C Product D Chief Executive Officer Corporate Office (Staff) |
| Slide21 : Implementation of a Multidomestic Strategy Worldwide
Geographic
Area
Structure Green circles indicate decentralization of operations
Emphasis is on differentiation by local demand to fit a culture
Corporate headquarters coordinates financial resources among independent subsidiaries
The organization is like a decentralized federation |
| Slide22 : Product A Product B Product C Product D A Structural evolution based on Product lines usually implies a Global International Strategy Evolution of Multi-Divisional Structure Chief Executive Officer Corporate Office (Staff) |
| Slide23 : Implementation of a Global Strategy Worldwide
Product
Divisional
Structure Green circle indicates centralization to coordinate information flow among worldwide products
Headquarters uses many intercoordination devices to facilitate global economies of scale and scope
Headquarters also allocates financial resources cooperatively
The organization is like a centralized federation |
| Slide24 : A Transnational International Strategy is likely to utilize a structure and that results in emphasis on both geographic and product structures Evolution of Multi-Divisional Structure |
| Slide25 : Strategic Networks |
| Slide26 : A Strategic Network Strategic
Center
Firm Network Firms |
| Slide27 : Strategic
Center
Firm Strategic Center Firm’s Critical Functions |
| Slide28 : Strategic
Center
Firm Strategic Outsourcing Center firm coordinates outsourcing among partners, initiates actions and coordinates problem solving |
| Slide29 : Strategic
Center
Firm Strategic Center Firm’s Critical Functions |
| Slide30 : Capability and Technology Strategic
Center
Firm |
| Slide31 : Strategic
Center
Firm Strategic Center Firm’s Critical Functions |
| Slide32 : Strategic
Center
Firm Building Linkages to Facilitate Learning |
| Slide33 : A Distributed Strategic Network Main
Strategic
Center
Firm Distributed Strategic Center Firms |