final notes - Chandler: The Enduring Logic of Industrial...

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Unformatted text preview: Chandler: The Enduring Logic of Industrial Success Claim : Successful firms capitalize on economies of scale and scope, create management structures, and invest in R&D (bigger is better). Once the firm lost this opportunity, its hard to regain competitive capabilities, even in its own domestic market. First mover : first companies that puts in the necessary investments to be the leaders. Economies of scale : large plants can produce products at a much lower cost than small ones because the cost per unit drops as the volume of output rises. geographic expansion Economies of scope : large plants can use many of the same raw and semi finished materials and intermediate production processes to make a variety of different products. Vertical/horizontal integration : companies grow horizontally by combining with competitors and vertically by moving backward to control materials and forward to control outlets. Related/unrelated diversification (do not go into a business you have no skill in): diversification to acquire businesses in which companies had few if any organizational capabilities to give them a competitive edge. Research and development Entrepreneurial enterprisestaying small Stock market pressure Greiner: Evolution and Revolution as Organizations Grow Claim: organizational growth is characterized as a series of developmental phases. Management practices that work well in one phase bring on the crisis in the next Secondary claims: organizations should not try to skip phases/ top managers whose style is no longer appropriate should remove themselves/growth is inevitable/ behaviour is determined by the past events and experiences rather than by what lies ahead. Each phase is at once a result of the previous phase and a cause for the next phase. Creativity : informal communication, long hours of work, market place feedback. Crisis of leadership (necessary knowledge and skills to introduce new business techniques) Direction : hierarchy, specialized tasks, more formal communication, new manager & key supervisors institute direction crisis of autonomy Delegation : decentralized organizational structure, empowering, motivation of lower-levels managers crisis of control (top management seeks to regain control over the company as a whole) Coordination : formal planning, top-level executives take responsibility for the initiation and administration of new systems red tape crisis (too much regulation, lack of control and confidence, bureaucratic system, restrictiveness) Collaboration : more teamwork, quick problem-solving, matrix structure, open-door...
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This note was uploaded on 04/08/2011 for the course COMM 210 taught by Professor Islam during the Spring '08 term at Concordia Canada.

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final notes - Chandler: The Enduring Logic of Industrial...

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