Exam 14: Implementing Corporate Strategy: Managing the Multibusiness Firm

Although sharing resources among the different businesses within the multibusiness corporation can offer substantial cost economies,these savings are often offset by:

Within a multidivisional company,"portfolio management" refers to decisions over which business the company should own,how resources should be allocated among these businesses,and how to manage the linkages between the businesses in order to exploit the synergies among them.

Oliver Williamson argument that the multidivisional corporation resolves the agency problem in large public corporation has not been verified in practice.

The choice between strategic planning and financial control as a corporate management style for a particular company depends upon:

The strategic planning systems of multibusiness corporations have been criticized for the fact that they do not make strategy.

The axes of the BCG and GE/McKinsey portfolio planning matrices act as proxies for two key strategic variables:

The axes of the BCG and GE/McKinsey business portfolio matrixes represent the two fundamental sources of profitability for a business: the attractiveness of its industry and its competitive advantage.

Increasingly,the corporate headquarters of multibusiness companies are being divided into two parts: that which exerts financial and strategic control over the businesses and that which provided common services to the businesses.

.The GE/McKinsey portfolio planning matrix is less sophisticated than the BCG growth-share matrix,but is easier to apply.

Mintzberg identified a key rigidity of the multidivisional firm its tendency to impose standardized corporate management systems across all its divisions.

The concept of "parenting advantage" is best summarized by the following statement:

The closer the linkages between the business units of a multibusiness corporation,the more involved corporate management must be in coordinating across the businesses.

The principal mechanisms through which the corporate headquarters seeks to improve the strategic and operational management of its businesses are:

Williamson believed that one of the key advantages of the M-form was that it centralized decision making in corporate headquarters.

A key challenge for the strategic planning systems of large corporations is reconciling top-down strategic leadership with bottom-up strategy initiatives.

Most multibusiness companies have a dual planning process: strategic planning focuses on the short and medium term,financial planning on the medium to long term

"Restructuring" is a corporate strategy that involves acquiring companies then intervening to cut costs,divest assets,revise competitive strategies,and adjust financial structure.

The fundamental issue that implementing corporate strategy addresses is:

The principal merit of the BCG portfolio planning matrix is:

The key issues with regard to the implementation of corporate strategy concern the relationships between the corporate headquarters and the individual businesses.