SGMT 3000 Chapter Notes - Chapter 13: Vertical Integration, None Of The Above, Pentre
12 Dec 2015
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Chapter 13 implementing strategy in companies that compete across industries & countries. Multi-divisional structure: each division given full responsibility to run own operations; each division held accountable for its own performance; companies move to this strategy as the company grows and starts to diversify. Multi-divisional structure: allows company to grow and diversify while reducing coordination and control problems; uses self-contained divisions and has separate corporate headquarters staff; each division treated as its own profit centre. Self-contained division: independent business unit that contains all value-chain functions needed to pursue its own business model successfully. Divisional management: have operating responsibility; look after day-to-day operations of each division; divisional managers can choose which organizational structure, control systems, culture to adopt in the implementation of its business model and strategies. Output control: used to monitor and evaluate divisional performance; return on invested capital (roic) is a common measure; easier to identify high-performing and underperforming divisions.
