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Unformatted text preview: Chapter 11: Organizational Structure and Controls Chapter 11 Organizational Structure and Controls KNOWLEDGE OBJECTIVES 1. Define organizational structure and controls and discuss the difference between strategic and financial controls. 2. Describe the relationship between strategy and structure. 3. Discuss the functional structures used to implement business-level strategies. 4. Explain the use of three versions of the multidivisional (M-form) structure to implement different diversification strategies. 5. Discuss the organizational structures used to implement three international strategies. 6. Define strategic networks and discuss how strategic center firms implement such networks at the business, corporate and international levels. CHAPTER OUTLINE Opening Case Ciscos Evolution of Strategy and Structure ORGANIZATIONAL STRUCTURE AND CONTROLS Organizational Structure Organizational Controls RELATIONSHIPS BETWEEN STRATEGY AND STRUCTURE EVOLUTIONARY PATTERNS OF STRATEGY AND ORGANIZATIONAL STRUCTURE Simple Structure Functional Structure Multidivisional Structure Matches between Business-Level Strategies and the Functional Structure Matches between Corporate-Level Strategies and the Multidivisional Structure Strategic Focus Hewlett-Packard Implements the Related Constrained Strategy through the Cooperative M-form Structure Matches between International Strategies and Worldwide Structures Matches between Cooperative Strategies and Network Structures Strategic Focus PepsiCo Moving from the Geographic Area Structure toward the Combined Structure Implementing the Transnational Strategy IMPLEMENTING BUSINESS-LEVEL COOPERATIVE STRATEGIES IMPLEMENTING CORPORATE-LEVEL COOPERATIVE STRATEGIES IMPLEMENTING INTERNATIONAL COOPERATIVE STRATEGIES SUMMARY REVIEW QUESTIONS EXPERIENTIAL EXERCISES VIDEO CASE NOTES 11-1 Chapter 11: Organizational Structure and Controls LECTURE NOTES Chapter Introduction : As students will recall, the discussion in the previous chapter (Chapter 10) described how governance mechanisms are used to align the interests of a firms top-level managers with those of the firms owners. It also described how those mechanisms influence the firms ability to execute strategies that have been implemented successfully as the firm strives to achieve a competitive advantage in the new competitive landscape. The same could be said of organizational structure, the focus of the current chapter. OPENING CASE Ciscos Evolution of Strategy and Structure Cisco growth was driven by its primary focus on nework equipment that enabled voice, video, and data to travel across computer networks. During the early growth of the company, it was organized into three lines of business: Internet service providers; large enterprises; and small and medium-sized businesses. Within each of these lines was a self-contained organization with separate marketing and operational groups. This structure was effective because the market was expanding rapidly. To reduce costs and stay customer-...
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- Spring '11