MGMT 101 Outline1 RM

Advantages separation of strategic and operating

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Advantages : separation of strategic and operating control (contrast to business vs. corporate level strategy), which is not possible in the functional structure; quick response to changes in the external environment; development of general management talent is enhanced Disadvantages : can be very expensive to duplicate; can be dysfunctional competition among divisions; differences in image and quality may occur across divisions Strategic Business Unit (SBU) Structure: places related divisions together: divisions with similar products, markets, and/or technologies are grouped into homogeneous SBUs Holding Company Structure ( Conglomerate): divisions are put together but unrelated: appropriate when businesses in a corporation’s portfolio have little in common Whatever structure you use, how do you integrate the parts you’ve separated? Integrating all of the parts is always challenging. There are four methods to do so: Matrix Structure : is a cross between divisional and functional structure; usually requires one subordinate to answer to more than one manager; usually created when neither a functional or regional structure works well enough; considered very complex 9 Liaison Roles : one person per department and all the departments stay in contact through this person Task Force : one person per department and all are in contact together; in contrast to cross-functional, they usually just meet and discuss rather than actually working together that often Cross-Functional Team : teams that are made up of people from all functional areas within a company—marketing, engineering, sales, and human resources, for example. Integrating Role : senior managers provide members of cross-functional team with relevant information from other teams and divisions
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Advantages : facilitates the use of specialized personnel, equipment, and facilities; provides professionals with a broader range of responsibility and experience Disadvantages : may cause uncertainty and lead to intense power struggles; working relationships become more complication and decisions may take longer to make Internal Operations : Implications for Organizational Structure : examples may be international division, geographic-area division, worldwide functional (typically oil companies), worldwide product division, worldwide matrix; the choice ultimately depends on the firm’s strategy, product diversity, and its importance of foreign sales When choosing your structure, you must ensure that there’s an Organizational Control System in place: Focuses employee attention on meaningful objectives Assess/monitors whether employees are performing effectively Rewards (or punishes) certain behaviors Needs to be congruent with the structure What controls people’s motivation to perform? Intrinsic Motivation Extrinsic Rewards: formal ($), informal (verbal praise) Sanctions: Formal, Informal (?) Control Process Steps 1. Establish the standards, goals, or targets against which performance is evaluated; goals must be consistent with the organization’s strategy and structure 2. Measure the actual performance; measure outputs resulting from behaviors or measure the
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