Thirteen: Implementing Strategy in Companies That Compete Across Industries and Countries
Thirteen: Implementing Strategy in Companies That Compete Across Industries and Countries
Thirteen: Implementing Strategy in Companies That Compete Across Industries and Countries
Thirteen
Implementing
Strategy in
Companies
That Compete
Across
Industries and
Countries
“It is not the strongest
of the species that will
survive, not the most
intelligent, but the
ones most responsive
to change.”
- Charles Darwin
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Managing Corporate Strategy
Through the Multidivisional Structure
A company competing across industries and
countries confronts a new set of problems and
has to make a new series of organizational design
decisions for a global and multinational business.
The Multidivisional Structure
1. Divisions
• Responsible for day-to-day operations
• Self-contained – with a full set of value-chain functions
• May share value-chain functions with other divisions
2. Corporate headquarters staff
• Monitor divisional activities
• Exercise financial control over each division
• Strategic responsibilities
Addresses the problems and economizes the costs of
managing the handoffs between value-chain
functions across industries.
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Multidivisional Structure
Figure 13.1
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Implementing a
Localization Strategy
A company pursuing a localization strategy generally
operates with a global area structure, establishing
overseas divisions in regions or countries:
Value creation activities duplicated in every region or
country of operation
Decentralized authority in each overseas division
Managers at global headquarters evaluate
performance of overseas divisions
No integrating mechanisms needed
No global organizational culture
Duplication of specialist activities raises costs
Companies using a localization strategy lose
many of the benefits of operating globally.
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Global-Area Structure
Figure 13.2
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