2 Structure and Control at the Functional Level Manufacturing (standardization)Strategic activities for improving efficiency, quality (TQM), and customer responsiveness.Traditionally hierarchical structure shifts toward flatter structureResearch and development (decentralization)To develop distinctive competencies in innovation and technology to bring products to market.Project teamsSales (output controls)To attain specific sales goals and increase responsiveness to customers.Human Resources (budget control or output control)
3 Generic Strategy, Structure, and Control Cost LeadershipDifferentiationFocusAppropriate StructureFunctionalProduct team or matrixIntegrating MechanismsCenter on manufacturingCenter on R&D or marketingCenter on product or customerOutput ControlsGreat use (e.g., cost control)Some use (e.g., quality goals)Some use (e.g., cost and quality)Behavior ControlsSome use (e.g., budgets, standardization)Great use (e.g., rules, budgets)Some use (e.g., budgets)Organizational CultureLittle use (e.g., quality control circles)Great use (e.g., norms and values)
4 Designing a Global Structure Multidomestic strategyLocal customer responsiveness focusInternational strategyCentralized at-home R&D and marketingGlobal strategyValue creation functions dispersed globally to optimal locationsTransnational strategyLocal responsiveness and global integration
5 Choices of Structure and Control Systems How to distribute and allocate responsibility between domestic and foreign managers?How to select a horizontal differentiation level that makes the best use of resources and best serves customers?How to choose the right integration mechanism and organizational culture?
6 Global Strategy/Structure Relationships MultidomesticInternationalGlobalTransnationalLowNeed for CoordinationHighBureaucratic CostsCentralization of AuthorityDecentralized to national unitCore competencies centralized, others decentralized to national unitsCentralizedSimultaneously centralized and decentralizedHorizontal DifferentiationGlobal-area structureInternational-division structureGlobal product-group structureGlobal-matrix structure, matrix in the mindNeed for Complex Integrating MechanismsMediumVery HighOrganizational CultureNot importantQuite importantImportantVery important
11 Corporate Strategy and Structure and Control Types of ControlCorporate StrategyAppropriate StructureNeed for IntegrationFinancial ControlBehavior ControlOrganizational CultureUnrelated diversificationMultidivisionalLow (no exchanges between divisions)Great use (e.g., ROI)Some use (e.g., budgets)Little useVertical integrationMedium (scheduling resource transfers)Great use (e.g., ROI, transfer pricing)Great use (e.g., standard- ization, budgets)Some use (e.g., shared norms and values)Related diversificationHigh (achieving synergies between divisions by integrating roles)Great use (e.g., rules, budgets)Great use (e.g., shared norms, values, common language)
12 Special Issues in Strategy-Structure Choice Mergers, acquisitions, and structureRecognizing cultural and structure differences.Integration after merger and acquisitionInternal new ventures and structureMaintaining the entrepreneurial spirit and aspects.Network structure and the virtual organizationCreating a set of strategic alliances with suppliers, manufacturers, and distributors.For example, Nike, Topsy Tail