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BusinessPolicyNotes13 - Chapter 13 Implementing Strategy in...

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Unformatted text preview: Chapter 13 Implementing Strategy in Companies That Compete Across Industries and Countries 326 STRATEGIC MANAGEMENT Opening Case Lecture 13 .:. GM Searches for Right Global Structure Dr. John Kraft I I 3 1 3 2 Strategy in Action ·:·Amoco, ARCO, and Burmah Castrol Become Part of BP 3 • Managing Corporate Strategy Through the Multidivisional Structure A company competing across industries and countnes confronts a new set of problems and has to make a new series of oraanizational design decisions for a global and multinational business. The Multidivisional Structure 1. Divisions • Responsible for dlIy-tCMlay operotions • S.tf..c;;ontlined- with • full 5ft of YIII~hain functions • May sharw value-chain functions with other divisions 2. Corporate headquarters staff .• Monitor divisional .c:tivit:iu .• Exercise financlill control over ueh division .• S lra ic re s n s ib ilitie s Addresses the problems and economizes the costs of managing the handoffs between value-chain functions across industries. 3 3 ~Castrol •• bp ,. 1 iiA T ~ -.-.... A M O C O ~ ~ I " Managing Corporate Strategy Through the Multidivisional Structure ·:·Functional or product structures are not sufficient when a company enters new industries ·:·Multidivisional structure innovations • Divisions (operating responsibility) • Corporate headquarters staff to monitor divisions (strategic responsibility) • Each division may be organized differently Multidivisional Structure Agure 13.1--- , " ~ ---- ~ i ! l =.:.:-=-:-=-:-=-: 3 5 3 • 1 327 Strategy in Action .:. SAR's and ERP's Systems 3 7 Related Diversification Principle benef"tts of related diversification come from transferrin9.. sharing, or leveraging functional resources or skIlls and some exchange of distinctive competencies across divisions. •:. Gains derived from the transfer, sharing, or leveraging across divisions • R&D knowledge • Industry Information • Customer bases .:. Output control difficult as businesses share resources • Not easy to measunt performance of individual divisions .:. Integration and control at divisional level required .:. Incentives and rewards for cooperation necessary High bureaucratic costs The aim is to design structure and control systems to maximize strategic benefits while economizing on costs. Global Matrix Structure Honh~·~ _. I _. SIU .sau I S8U •••••••••1 •••••• '1 ·......;:.1 . _ 2 ) ••••••• I ~I • Ind;";dlAI operllting ~Nes ~.~ •."=...""\?'..,J,l;~ 3 I Corporate Strategy and Structure and Control Table 13.1 ~ .,e:-.... c . i , - ••...•.•.. •...... .•......-..r' •.. ....•..-- .".~ ~ ...~,,,.;"~/ .•....
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BusinessPolicyNotes13 - Chapter 13 Implementing Strategy in...

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