MGMT 425 Final Exam .txt

  1. Organizational structure specifies:
    • -the firm's formal reporting relationships, procedures, controls, and authority & decision-making processes,
    • -the task to be done and how to do them, given the firm's strategies, organizational structure facilitates effective strategy implementation
  2. Strategy and Organizational structure relations
    rule #1:strategy determines organizational structure rule#2:once in place, structure influences strategy rule#3:strategy has a stronger influence on structure than the reverse
  3. Strategy and Structure match
    look at powerpoint organizational structure slide 5
  4. Simple structure
    • -owner-manger makes all major decisions and monitor all activities,
    • -staff acts as extension of manager's supervisory authority,
    • -few rules, limited task specialization, unsophisticated technology system,
    • -as firms grow more complex they need to add layers and controls
  5. Functional structure/Cost leadership strategy
    • -simple reporting relationships,
    • -few decision making and authority layers,
    • -centralized corporate staff,
    • -strong operational focus on process improvements,
    • -low cost culture,
    • -centralized staff decision making authority,
    • -jobs specialization,
    • -highly formalized rules and procedures
  6. Functional structure/Differentiation strategy
    • -complex and flexible reporting relationships,
    • -cross-functional product development teams,
    • -strong focus on marketing and product R&D,
    • -development oriented culture,
    • -decentralized decision making,
    • -broad job descriptions,
    • -informal rules and procedures
  7. Cooperative form
    organizational structure using horizontal integration to bring about interdivisional cooperation
  8. Cooperative M-Form/Related Constrained strategy
    • -divisions formed around products, markets or both,
    • -all of the divisions share one or more corporate strengths, -interdivisional sharing depends on cooperation,
    • -links resulting from effective integration mechanisms support sharing of both tangible and intangible resources, -centralization is one integrating mechanism that can be used to link activities among divisions allowing firms to exploit common strengths and share competencies
  9. Strategic business unit form
    • multidivisional organization structure with three levels to support the implementation structure with three levels to support the implementation diversification strategy.
    • 1.corporate headquarters
    • 2.strategic business units
    • 3.SBU division
  10. SBU M-Form/Related Linked strategy
    • -divisions within each SBU are related in terms of shared products and/or markets,
    • -divisions of one SBU have little in common with divisions of other SBU,
    • -divisions within each SBU share product or market competencies to develop economices of scope,
    • -integrations used in cooperative form are equally effective for the SBU form,
    • -each SBU is a profit center,
    • -financial controls are more vital for evaluating performance,
    • -operations are partially centralized (in SBUs)
  11. Competitive form
    organizational structure in which the firm's divisions are completely independent
  12. Competitive M-Form/Unrelated Diversification strategy
    • -operations are decentralized to divisions,
    • -divisions do not share common corporate strengths,
    • -integrations devices not developed to coordinate activities across divisions,
    • -specific performance expectation sand accountability for independed divisions stimulate internal competitions for future resources,
    • -headquarters maintains a distant relationship to avoid intervention in divisional affairs,
    • -strategic controls are used to monitor performance relative to targeted returns,
    • -headquarters remains responsible for cash flow allocation, performance appraisal, resource allocation, and the legal aspects related to acquisitions
  13. Worldwide Geographic Area structure
    organizational structure emphasizing national interests and facilitates decentralized efforts to satisfy local or cultural differences
  14. Worldwide geographic area structure/Multidomestic strategy
    • -focuses on variations of competition within each country,
    • -customizes products to meet specific needs and preferences of local customers,
    • -decentralizes the firm's strategic and operating decisions to business units in each country
  15. Worldwide Product Divisional structure
    organizational structure with centralized decision making authority in the WW division headquarters to coordinate and integrate decisions and actions among divisional business units
  16. Worldwide product divisional structure/Global strategy
    • -centralizes the firm's strategic and operating decisions at the home office,
    • -involves divisional business units operating in each country that are interdependent,
    • -home office attempts to achieve integration across divisional business units, adding management complexity
  17. Hybrid-form Combination structure
    organizational structure that consists of a combination of product and geographic area division
  18. Hybrid-form combination structure/Transnational strategy
    • -assets and operations may be centralized/decentralized,
    • -functions may be integrated/nonintegrated,
    • -relationshiops may be formal/informal,
    • -coordination mechanisms may leveerage efficiency/flexibility
  19. Content of Globalization debate
  20. Motives for going international
    increased market size, return on investment, economies of scale, location advantages
  21. Increased market size
    domestic market may lack the size to support efficient scale manufacturing facilities. ex:japanese electronics or automobile manufacturers
  22. Return on investment
    large investment projects may require global markets to justify the capital outlays. ex:aircraft manufacturers BOEING
  23. Economies of scale
    expanding size or scope of markets helps to achieve economies of scale in manufacturing as well as marketing, R&D or distribution. ex:Coca-Cola
  24. Location advantages
    low cost markets aid in developing competitive advantage by providing access to raw materials, transportation, lower labor costs, etc. ex:China's low labor cost, India's Bangalor region for IT workers, Irelands emerging service economy
  25. International corporate strategies
    multidomestic strategy, global strategy, transnational strategy
  26. Multidomestic strategy
    • -products and services are tailered to local markets,
    • -managerial practices:
    • ~focuses on competition in each market,
    • ~strategy and operating decisions are decentralized to strategic business units in each country,
    • ~business units in one country are independent of each other,
    • ~regional managers have considerable autonomy,
    • -higher uncertainty due to differences across markets
  27. Global strategy
    • -products are standardized across national markets;
    • ~emphasizes economies of scale,
    • ~requires resource sharing and coordination across borders,
    • -managerial practices:
    • ~business level decisions are centralized in the home office,
    • ~strategic business units are interdependent,
    • ~home office focuses on achieving integration across all SBUs,
    • -often lacks responsiveness to local markets
  28. Transnational strategy
    • -seeks to achieve both global efficiency and local responsiveness,
    • -managerial practices:
    • ~strong central control and coordination to achieve efficiency,
    • ~decentralization to achieve local market responsiveness,
    • ~firm must pursue organizational learning to achieve competitive advantage,
    • -difficult to achieve because of simultaneous requirements
  29. Global Integration
    recognize the similarities between international markets and integrate them into the overall global strategy
  30. Local Responsiveness
    a localization strategy focusing on increasing profitability by customizing product and service that can provide taste and preferences in different national markets
  31. Characteristics of International entry modes
    exporting, licensing, strategic alliance, acquisition, new wholly-owned subsidiary
  32. Conditions of Exporting
    a firm has strong home country advantage, limited foreign manufacturing expertise, and requires invenst only in distribution
  33. Conditions of Licensing
    a firm as exclusive intangible resources such as trademarks, patents, and production techniques
  34. Conditions of Strategic Alliance
    the firm needs to connect with an experienced partner already in the targeted market for product development and innovation, especially when facing uncertain situations such as an emergin economy or the need for local responsiveness is high
  35. Conditions of Acquisition
    the firm needs to secure a stronger presence in international markets quickly
  36. Conditions of New wholly-owned Subsidiary
    the firm's intellectual property rights in an emerging economy are not well protected, the number of firms in the industry is growing fast, and the need for global integration is high
  37. Exporting Advantages & Disadvantages
    • A:-no need to establish operations in other countries,
    • -establish distribution channels through contractual relationships.
    • D:-invovles high transportation costs,
    • -may encounter high import tariffs,
    • -may have less control on marketing and distribution
  38. Licensing Advantages & Disadvantages
    • A:firm authorizes another firm to manufacture and sell its products, -licensor receives royalty based payments,
    • -licensee takes risk in mfg investments
    • D:-has low control over manufacturing and marketing,
    • -offers lower potential returns(shared with licensee),
    • -involves risk of licensee imitating technology and product for own use,
    • -may have inflexible ownership arrangement
  39. Strategic Alliance Advantages & Disadvantages
    • A:-involve shared risks and resources(can also be considered as a disadvantage,
    • -facilitate development of core competencies ,
    • -involve fewer resources and costs required for entry,
    • D:-may involve possible incompatibility, conflict or lack of trust with partner
  40. Acquisition Advantages & Disadvantages
    • A:-allows for quick access to market.
    • D:-is costly, has complex negotiation and transaction requirments,
    • -involves possible integration difficulties
  41. New Wholly-Owned Subsidiary Advantages & Disadvantages
    • A:-allows for maximum control,
    • -has the highest potential returns.
    • D:-is costly,
    • -involves complex processes,
    • -carries high risk
Card Set
MGMT 425 Final Exam .txt
MGMT 425