Organizational Structure

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Organizational Structure and Controls,Functional Structure Functional department heads report to Chief Executive Officer who integrates decisions and actions from a company-wide point of view

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Presentation Transcript

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