Chap 10

Advantages of Functional Structure

Pooling of specialists Enhances coordination and control Centralized decision making Enhanced organizational-level perspective More efficient use of managerial and technical talent Facilitated career paths and development in specialized areas

disadvantages of virtual structures

Potential loss of operational control among partners Loss of strategic control over emerging tech Difficulty in determining where one company ends and another begins due to close interdependencies

org structure

Refers to formalized patterns of interactons that link a firms tasks, technologies & ppl

advantages of divisional structure

Separation of strategic and operating control Quick response to important changes in external environment Minimal problems of sharing resources across functional departments Development of general management talent is enhanced

Diversification

Strategic business unit (SBU) and holding company structures result from extensive

related diversification; unrelated diversification

Strategic business unit (SBU) structures are best suited for corporations pursuing ________, whereas holding company structures are best suited for companies with ________ strategies. A) product-market diversification; international

- need for the division of tasks into meaningful groupings - need to integrate the Groupons for efficiency and effectiveness

Structure provides a means of balancing 2 conflicting forces

Resources

Structures help to ensure that ________ are used effectively in accomplishing the mission of the organization.

Advantages of teams according to Jeffrey Pfeffer

Teams substitute peer based control for hierarchical control of work Teams often develop more creative solutions Bc they share Teams permit the absorption of administrative tasks previously performed by specialists

modular organizations

The local firm retains full strategic control

Strategy and structure influence each other

The relationship between strategy and structure can be best described as

Three major contingencies influence structure adopted by firms with international operations

Type of strategy driving the firm's foreign operations Product diversity Extent to which the firm is dependent on foreign sales

Major contingencies that influence the structure a firm choose when expanding into foreign markets

Type of strategy that is driving the company foreign operations Product diversity The extend to with a firm is dependent on foreign sales

Types of boundary less organizations

Virtual Modular Barrier-free

centralizing the purchasing function.

Whole Foods tried to overcome some of the limitations of a divisional structure by

global start-up

a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries. Right from the beginning, it uses inputs from around the world and sells its products and services to customers around the world.

worldwide functional structure

a functional structure in which all departments have worldwide reponsibilities.

geographic-area division structure

a type of divisional organizational structure in which operations in geographical regions are grouped internally

Worldwide Matrix Structure

a type of matrix organizational structure that has one line of authority for geographic-area divisions and another line of authority for worldwide product divisions. Global strategies are driven by economi

Divisional Organizational Structure

An organizational form in which products, projects, or product markets are grouped internally. Also called multidivisional structure or M-Form

Holding company structure

An organizational form in which the divisions have a high degree of autonomy both from other divisions and from corporate headquarters.

functional structure

An organizational form in which the major functions of the firm, such as production, marketing, R&D, and accounting, are grouped internally. Usually found in organizations where there is a HIGH VOLUME PRODUCTION

simple structure

An organizational form in which the owner-manager makes most of the decisions and controls activities, and the staff serve as an extension of the top executive. Usually small firms with a narrow product market scope will adopt it There's little specialization of tasks It encourages great and individualism since there are few rules and regulations Characterized by LOW SPECIALIZATION & HIGH CENTRALIZATION

outsourced

As illustrated in the opening case for Chapter 10, Boeing lost a lot of control and, therefore, incurred high operating costs for its build out of the 787 Dreamliner because it ________ design and manufacturing.

Functional Structure

At ACME Corporation, work is divided into units that specialize in production, marketing, research and development, and other management tasks. This is an example of a

Disadvantages of divisional structure

Can be very expensive Can be dysfunctional competition among divisions Differences in image and quality may occur across divisions Can focus on short-term performance

modular organization

Central hub surrounded by networks of outside suppliers and specialists an organization that outsources noncore business activities to outside companies, suppliers, specialists, or consultants

Disadvantages of matrix structure

Complicated working relationships Intense power struggles Excessive reliance on group processes

Disadvantages of simple structure

Employees may not understand their responsibilities May take advantage of lack of regulation

Structure follows strategy

Generally speaking, discussions of the relationship between strategy and structure strongly imply that

Worldwide Product Division Structure

Global strategies are driven by economic pressures that require managers to view operations in different geographic areas to be managed for overall efficiency. One structure consistent with the efficiency perspective is the ______ a product division structure in which all divisions have worldwide responsibilities.

Advantages of simple structure

Highly informal Centralized decision making Little specialization

international division structure

an organizational form in which international operations are in a separate, autonomous division. Most domestic operations are kept in other parts of the organization.

matrix organizational structure

an organizational form in which there are multiple lines of authority and some individuals report to at least two managers.

advantages of holding company structure

cost savings associated with lower overhead autonomy increases the motivational level of divisional executives

worldwide product division

If an international firm has a global strategy and a relatively low level of product diversity, the best choice for its organizational structure is a _______

worldwide matrix

If an international firm has a multidomestic strategy and a relatively high level of product diversity, the best choice for its organizational structure is a__________

Disadvantages of functional structure

Impeded communication and coordination due to differences in functional orientations May lead to short-term thinking (functions vs. organization as a whole) Difficult to establish uniform performance standards

savings in personnel and overhead expenses associated with a small corporate office.

Important advantages of a holding company structure include

Advantage of matrix structure

Increased clarity in reporting relationships

Primary types of organizational structures used to manage international operations

International division Worldwide matrix Geographic area division Worldwide functional Worldwide product division

Structures used to manage international operations

International division Geographic-area division Worldwide functional Worldwide product division Worldwide matrix

Disadvantages of Barrier free form of organization

Lacks strong leadership can lead to coordination problems Democratic process can b time-consuming and difficult to manage If trust among employees is not sufficiently high, organizational performance may suffer

Strategic concerns of outsourcing

Loss of critical skills or developing the wrong skills Loss of cross functional skills Loss of control over a supplier

Outsourcing

Name of the practice that many modular orgs use to grow

people, resources

One of the disadvantages of divisional structure design is that they divide ________, ________, and knowledge. They insulate divisional managers from other divisional managers thus inhibiting their ability to coordinate activities, share resources, and learn from each other.

Asian conglomerates are made up of a set of legally separate corporations, each with its own board of directors and shareholders.

One of the reasons that Asian conglomerate business groups continue to grow and those in the United States are seen to be unfocused and unlikely to succeed is that

virtual organization

Organizations that give up part of their control and accept interdependent destinies Continually evolving network of independent companies (supplies, customers, even competitors) linked together to share skills, costs, and access to the markets of each other

increase the overall scope of operations.

Organizations that make it to the growth stage, design strategies to

The way team members treat each other

Orgs r increasingly using teams for many reasons. The difference between a good team and an outstanding team has been found to b

Advantage of SBU structure

task of planning and control by the corporate office more manageable individual businesses can react more quickly to important changes Divisions with similar products, markets, or tech are formed into homogeneous groups that can achieve synergies

disadvantages of sbu structure

may become difficult to achieve synergies additional level of management increases overhead expenses

Advantages of Outsourcing

Accessing best in class goods and services Enabling rapid expansion with relatively low capital investment Focusing scares resources on core competencies

strategic business unit structure

An organization such as ConAgra that has dozens of different divisions with similar products will probably have the greatest success with which form of organization structure?

Strategic business unit (SBU) structure

An organizational form in which products, projects, or product market divisions are grouped into homogeneous units.

3 Major contingencies that influence structure adopted by firms with international operations

- type of strategy driving the firms foreign operations - product diversity - extent to which the firm is dependent on foreign sales

social responsibility

32) Which of the following activities is not identified by organizational structure?

nature; magnitude

34) The appropriateness of the type of organizational structure depends upon the ________ and ________ of growth.

Communication and coordination across tome zones

A global start up faces many management challenges including

functional; divisional

A matrix organizational structure is characterized by a combination of the ________ structure and ________ structure.

disadvantages of holding company structure

inherent lack of control and dependence limited staff support