Exam 11: Organizational Structure and Controls

The most centralized and most costly form of the multidivisional structure is the

The worldwide product divisional structure has centralized decision-making authority in the worldwide division headquarters to coordinate and integrate decisions and actions among business units.

Firms implementing the multidomestic strategy often attempt to isolate themselves from global competitive forces by establishing protected market positions or by competing in industry segments that are most affected by differences among local countries.

To implement a related constrained strategy, firms should use the cooperative form of the multidivisional structure.

A multidomestic strategy would be associated with

Firms seeking to differentiate particularly need support from the ____ and ____ functions.

Companies and business units using the differentiation strategy should emphasize financial rather than strategic controls.

Firms seeking to compete on the basis of cost leadership particularly need support from the ____ and ____ functions.

Describe the organizational structures used to implement cooperative strategies, giving attention to the role of the strategic center firm.

Research shows that structure has a more important influence on strategy than the reverse and hence the emphasis of the chapter on the subject of structure.

To implement a related-linked strategy, a firm usually needs an SBU structure.

To successfully implement a cost leadership strategy, there is a need for

Selecting the organizational structure and controls that effectively implement the chosen strategy is a challenge for managers because

An important lesson from the Chapter 11 Opening Case about Borders is that

Jumbo Industrial Supply has grown from a one-location firm with a restricted product line to a multi-state organization with numerous product lines and a large sales staff. Sales have doubled every year for the last three years. It currently has a simple structure with Jared Smith, the owner-manager, making all major decisions. Jumbo is probably now experiencing or will soon experience

Case Scenario 2: Palmetto. Palmetto was an early pioneer of personal data assistants (PDAs) and dominates that market space (in terms of market share) with its core product, the Palmetto Pidgy. Because this product category was entirely new to the market, Palmetto had to internally develop the hardware and software sides of the business, and today is both a manufacturer of PDAs and a programmer and licensor of its PDA operating system software. Recently however, the hand-held device maker's performance has taken a dive as a result of slumping sales and costly inventory problems. Palmetto has also had difficulty coordinating its software and hardware businesses, in part due to the near absence of a coherent structure and the differing economics underlying the two. Specifically, hardware for PDAs is increasingly a cost-based business, while software is a highly differentiated one. While Palmetto is doing pretty well in both businesses, its own resource base does not allow it to compete any differently than that proscribed for other industry participants (i.e., competes on cost with hardware and features with software). In addition to these fundamental differences, new large entrants are entering both the equipment (e.g., Sony) and software (e.g., Microsoft) sides of its business, putting further pressure on margins. Management has decided that it is unable to focus on the complexities of each of these businesses so it is opting to break Palmetto into two separate, independent public companies - Pal, Inc. will be devoted to hardware and Mettolink, Inc. will be devoted to software. -(Refer to Case Scenario 2) What basic structural form would you recommend for both Pal and Mettolink? What must each firm be careful to avoid with this structure?

Which of the following multidivisional structures is CORRECTLY paired with the appropriate corporate-level strategy?