Organizational Structure: Difference between revisions
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[[U-form]] unitary form - split functional responsibilities Mfg. Marketing , Personnel, Finance etc | [[U-form]] unitary form - split functional responsibilities Mfg. Marketing , Personnel, Finance etc | ||
When firms got too larger especially when the diversified firm made it ineffective. In response Duport, GM etc developed the Multi-divisional [[M-form]] that allowed semi-autonomous divisions each with its own set of functions based on Brand, | When firms got too larger especially when the diversified firm made it ineffective. In response Duport, GM etc developed the Multi-divisional [[M-form]] that allowed semi-autonomous divisions each with its own set of functions based on Brand, Product or Regional Lines. Successful because Execs could focus on [[Corporate Strategy]] | ||
Advantages of [[M-form]] | |||
*1. Addition / deletion is easier | |||
*2. Accountability, | |||
*3. Comparison | |||
[[Chandler]] says these can lead to Scales / Scope advantages but also higher admin costs. | [[Chandler]] says these can lead to Scales / Scope advantages but also higher admin costs. | ||
Organizational structures | ==Organizational structures== | ||
Functional - Centralized around key functions | *Functional - Centralized around key functions | ||
Functional Holding - core centralized around key function - rest is decentralized | *Functional Holding - core centralized around key function - rest is decentralized | ||
Holding - Highly decentralized | *Holding - Highly decentralized | ||
Multi-divisional, | *Multi-divisional, centralized strategically, decentralized ops | ||
Criticisms | ==Criticisms== | ||
1. No academic link between | *1. No academic link between relatedness and performance more to do overcoming issues with Industry structure and firm specific characteristics | ||
2. [[Prahalad and Hamel]] decry the tyranny of the SBU as it does not facilitate complex interactions | *2. [[Prahalad and Hamel]] decry the tyranny of the SBU as it does not facilitate complex interactions | ||
[[Category:Strategy]] | [[Category:Strategy]] | ||
Revision as of 08:51, 31 October 2012
U-form unitary form - split functional responsibilities Mfg. Marketing , Personnel, Finance etc When firms got too larger especially when the diversified firm made it ineffective. In response Duport, GM etc developed the Multi-divisional M-form that allowed semi-autonomous divisions each with its own set of functions based on Brand, Product or Regional Lines. Successful because Execs could focus on Corporate Strategy
Advantages of M-form
- 1. Addition / deletion is easier
- 2. Accountability,
- 3. Comparison
Chandler says these can lead to Scales / Scope advantages but also higher admin costs.
Organizational structures
- Functional - Centralized around key functions
- Functional Holding - core centralized around key function - rest is decentralized
- Holding - Highly decentralized
- Multi-divisional, centralized strategically, decentralized ops
Criticisms
- 1. No academic link between relatedness and performance more to do overcoming issues with Industry structure and firm specific characteristics
- 2. Prahalad and Hamel decry the tyranny of the SBU as it does not facilitate complex interactions
