Chapter 7 - Organisational Strategy In Global Environment


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Unformatted text preview: EVEL Involves search of new domain in which to exploit and defend the ability to create value – Vertical integration: a strategy in which an organization takes over and owns its suppliers or its distributors – Related diversification: the entry into a new domain that is related in some way to an organization’s domain – Unrelated diversification: the entry into a new domain that is not related in anyway to an organization’s core domain CORPORATE-LEVEL STRATEGY AND STRUCTURE STRUCTURE For organizations operating in more than one domain, a multidivisional structure is appropriate. Conglomerate structure and unrelated diversification Conglomerate structure: a structure in which each business is placed in a self­contained division and there is no contact between divisions STRUCTURES FOR RELATED DIVERSIFICATION DIVERSIFICATION Related diversification creates value by sharing resources or transferring skills from one division to another. Requires lateral communication between divisions as well as vertical communication bet...
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