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Chapter Ten. Implementing Strategy: Creating Effective Organizational Designs. Learning Objectives. TRANSPARENCY-84. After studying this chapter, you should have a good understanding of:.

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chapter ten

Chapter Ten

Implementing Strategy:Creating Effective Organizational Designs

after studying this chapter you should have a good understanding of

Learning Objectives

TRANSPARENCY-84

After studying this chapter, you should have a good understanding of:
  • The importance of organizational structure and the concept of the “boundary-less” organization in implementing strategies
  • The growth patterns of major corporations and the relationship between a firm’s strategy and its structure
  • Each of the traditional types of organizational structure—simple, functional, divisional, and matrix
  • The relative advantages and disadvantages of traditional organizational structures
  • The implications of a firm’s international operations for organizational structure
  • The different types of boundary-less organizations—barrier-free, modular, and virtual—and their relative advantages and disadvantages
slide3

Growth Patterns of Large Corporations

TRANSPARENCY-85

Exhibit 10.1

Phase 1

Strategy: Low revenue base; simple product-market scope

Structure: Simple

Phase 2

Strategy: Increase in revenues; engage in vertical integration (backward and/or forward)

Structure: Functional

Phase 3

Strategy: Expand into new, related product-markets and/or geographical areas

Structure: Divisional

Phase 4

Strategy: Expand into international markets

Structure: International Division, Geographic Area, Worldwide Product Division, Worldwide Functional, or Worldwide Matrix

functional structure advantages and disadvantages

Chief Executive Officer or President

Manager Production

Manager Engineering

Manager Marketing

Manager R&D

Manager Personnel

Manager Accounting

Lower-level managers, specialists, and operating personnel

TRANSPARENCY-86

Functional Structure: Advantages and Disadvantages

Exhibit 10.2

divisional structure advantages and disadvantages

Chief Executive Officer or President

Corporate Staff

Division A

General Manager

Division B

General Manager

Division C

General Manager

Manager Production

Manager Engineering

Manager Marketing

Manager R&D

Manager Personnel

Manager Accounting

Lower-level managers, specialists, and operating personnel

Organized similarly to Division 1

Organized similarly to Division 1

TRANSPARENCY-87

Divisional Structure: Advantages and Disadvantages

Exhibit 10.3

matrix structures advantages and disadvantages

Chief Executive Officer or President

Corporate Staff

Manager Administration and Human Resources

Manager Projects

Manager Manufacturing

Manager Engineering

Manager Marketing

Manager Public Relations

Project A

Project B

Project C

Project D

TRANSPARENCY-88

Matrix Structures: Advantages and Disadvantages

Exhibit 10.4

functional divisional and matrix structures advantages and disadvantages

TRANSPARENCY-89

Functional, Divisional, and Matrix Structures: Advantages and Disadvantages

Exhibit 10.5

Functional Structure

Divisional Structure

Matrix Structure