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Golden parachute generous severance package agreed

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Golden parachute – generous severance package agreed upon in case of hostile takeover g.iii. Poison pills – company gives shareholders certain rights in the case of a takeover 7. Lecture 6 – Formal organization: structure a. Structure balances specialization and integration (conflicting). Elements include: authority, hierarchy, centralization v decentralization, span of control, line manager (direct chain of command), staff managers (functional-area specialists b. Simple structure – oldest, most common. Staff is extensions of owner-manager (small) b.i. Advantages: highly centralized, little specialization of tasks, informal, few regulations and rules b.ii. Disadvantages: informality and lack of rules can lead to confusion and conflict with employees’ responsibilities. Employees may act in own self- interest, and there may be little opportunity for advancement. c. Functional structure – major functions are grouped internally, single or closely related product or service, high prod volume, and some vertical integration. This is for growing organizations that are still highly related. c.i. Advantages: Can enhance coordination and control with each area, more functional use of managerial talent, centralized decision making, career paths and development are available c.ii. Disadvantages: communication can be thwarted as functional areas increasingly view themselves as independent and sometimes with conflicting goals. Additionally each functional area may do what is best for each area and not what is best for the organization. It is difficult to establish uniform evaluation standards across the organization d. Divisional structure (multidivisional or M-form) – organized around products, projects, or markets. Operating divisions are relatively independent, have their own financial specialists. Rewards are based on income and revenue d.i. Advantages: separation of strategic (corporate) and operating (division). Each divisional manager can respond quickly to changes in environment. Minimize problem of sharing resources across functional departments bc
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each division has its own financial departments. Gen manager development is better. d.ii. Disadvantages: Expensive (duplication of personnel), sense of zero-sum between divisions (competition) differences in quality and image btwn divisions, focus on short-term since financial metrics are used to evaluate d.iii. Divisional form: Strategic business unit (SBU) – divisions with similar products are grouped. More related businesses are fewer sbus there are d.iii.1. Adv: businesses can react quicker to changes in environment bc they don’t report to corporate. Lev core competencies d.iii.2. Disad: Inc overhead, corporate is far from businesses, synergies may be difficult to realize d.iv. Divisional form: Holding company structure (conglomerate) – used when businesses are not related (opp of sbu), high degree of autonomy, small corp staff d.iv.1. Adv: cost savings, low overhead, divisional chiefs can respond quickly to market d.iv.2. Disad: lack of control from corporate, if key divisional exec leave youre fucked e. How to integrate parts?
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