Exam 13: Implementing Corporate Strategy: Managing the Multibusiness Firm

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.

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

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

A strategic inflection point is a point where major changes in a firm's competitive environment require a complete change of strategy

Portfolio planning techniques, (also called portfolio matrixes), contribute to the following corporate management function:

A major disadvantage of legislation to improve corporate governance by imposing more stringent reporting requirements on public companies and increasing the penalties that directors face for negligence and misconduct is:

Managing linkages among businesses through transferring skills and sharing resources would appear to offer greater potential for creating value than portfolio management because:

In large multibusiness, multinational companies shared service organizations are almost always located close to their corporate headquarters.

By separating their corporate headquarters into a corporate management unit and a shared services organization, large corporations anticipate the following benefits:

A major limitation of the BCG matrix in guiding corporate strategy is:

Which of the following is not a key difference between a multidivisional company and a holding company?

IBM and Samsung Electronics are examples of large, mature corporations that have:

If corporate management focuses heavily upon enforcing financial performance targets on its individual businesses, this increases the need for corporate management to guide the strategic plans of the individual businesses.

Evidence that companies make only minor changes in their allocation of capital expenditure among their businesses from year to year supports Oliver Williamson's argument that multidivisional structures (the "M-form") permit more rationale, less politicized decision making at the corporate level.

Oliver Williamson said two main corporate governance advantages of the multidivisional structure ("M-form") for large, diversified companies were:

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

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

As boards of directors have become increasingly preoccupied with compliance issues, they have become less effectives in guiding the strategies of the companies they oversee.

According to Jack Welch, the advantages of focus that single business companies possess are outweighed the advantage that multibusiness companies possess in terms of their ability to share the ideas from many different sources.

Within a multidivisional company, "portfolio management" involves managing the linkages among the businesses in order to exploit the synergies between them.