fast food organizational structure
TRANSCRIPT
Chapter 11
Organizational Structure and Controls
Competitiveness
Chapter 3Internal
Environment
Chapter 2External
EnvironmentThe StrategicThe StrategicManagementManagement
ProcessProcessStrategic IntentStrategic Mission
StrategicCompetitivenessAbove Average
ReturnsFeedback
Strategy Formulation
Chapter 4Business-Level
Strategy
Chapter 5CompetitiveDynamics
Chapter 6Corporate-Level
Strategy
Chapter 8International
Strategy
Chapter 9Cooperative
Strategies
Chapter 7Acquisitions &Restructuring
Strategy Implementation
Chapter 10Corporate
Governance
Chapter 11Structure& Control
Chapter 12Strategic
Leadership
Chapter 13Entrepreneurship & Innovation
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•Effective OS’sEffective OS’s•Evolution of OS’s (Chandler’s Thesis)Evolution of OS’s (Chandler’s Thesis)•OS’s for Single/Dominant BusinessesOS’s for Single/Dominant Businesses•OS’s for Related-Constrained DiversifiersOS’s for Related-Constrained Diversifiers•OS’s for Related-Linked DiversifiersOS’s for Related-Linked Diversifiers•OS’s for Unrelated DiversifiersOS’s for Unrelated Diversifiers•OS’s for Global StrategiesOS’s for Global Strategies•OS’s for Multidivisional StrategiesOS’s for Multidivisional Strategies•OS’s for Cooperative StrategiesOS’s for Cooperative Strategies
Organization Structure (OS): OverviewOrganization Structure (OS): Overview
Effective OS’s:Effective OS’s:•Organizing Divisions:
•Discrete Units•Interdependent Activities
•Unit Managers•Authority•Rewards
Organization Structures (OS)Organization Structures (OS)
Used to Implement strategiesUsed to Implement strategies•Allocate/Leverage R&C’s•Define Reporting Relationships•Create Accountability
Chandler’s Thesis: OS EvolutionChandler’s Thesis: OS Evolution
Functional StructureFunctional Structure
Simple StructureSimple Structure
Multidivisional StructureMultidivisional Structure
Stage IStage I
Stage IIStage II
Stage IIIStage III
Simple StructureSimple Structure
Owner / Manager (OM)Owner / Manager (OM)
•OM makes all major decisionsOM makes all major decisions•Little SpecializationLittle Specialization•Little FormalizationLittle Formalization•Single products/single marketsSingle products/single markets•Focus StrategiesFocus Strategies
EmployeeEmployeeEmployeeEmployee EmployeeEmployee EmployeeEmployee EmployeeEmployee EmployeeEmployee
Owner/ManagerOwner/Manager
Simple StructureSimple Structure
•First stage after Simple StructureFirst stage after Simple Structure
•Specialization / Learning CurveSpecialization / Learning Curve
•Overcomes limits of owner/managerOvercomes limits of owner/manager
•Functional mgrs report to CEO who makes Functional mgrs report to CEO who makes company-wide decisions.company-wide decisions.
•Risk: Myopic function managersRisk: Myopic function managers
•Single or dominant-business firmsSingle or dominant-business firms
Functional StructureFunctional Structure
ProductionProductionFinanceFinance R&DR&D AccountingAccounting Sales & Sales & MarketingMarketing
Human Human ResourcesResources
Chief Executive OfficerChief Executive Officer
Functional StructureFunctional Structure
ProductionProductionFinanceFinance R&DR&D AccountingAccounting Sales & Sales & MarketingMarketing
Human Human ResourcesResources
Chief Executive OfficerChief Executive Officer
Functional StructureFunctional Structure
Differentiation Business-Differentiation Business-level strategy usually level strategy usually employs a decentralized employs a decentralized structure and emphasizes structure and emphasizes Product R&D and Sales Product R&D and Sales & Marketing& Marketing
Low Cost Business-level Low Cost Business-level strategy usually employs strategy usually employs a centralized structure a centralized structure and emphasizes Process and emphasizes Process R&D and OperationsR&D and Operations
Transparency 11-11
A Process-Oriented Functional Structure
General Manager
Foundry &Castings
ScrewMachining Inspection Customer
Service
Milling &Grinding
Finishing &Heat Treating
Loading &Shipping
Billing &Accounting
Transparency 11-12
Evolution of Multi-Divisional StructureEvolution of Multi-Divisional Structure
Corporate Office (Staff)Corporate Office (Staff)
Chief Executive OfficerChief Executive Officer
Product AProduct A Product BProduct B
Transparency 11-13
Corporate Office (Staff)Corporate Office (Staff)
Chief Executive OfficerChief Executive Officer
Product AProduct A Product BProduct B
Evolution of Multi-Divisional StructureEvolution of Multi-Divisional Structure
ProductionProductionFinanceFinance EngineeringEngineering AccountingAccounting Sales & Sales & MarketingMarketing
Human Human ResourcesResources
Transparency 11-14
FinanceFinance
ProductionProductionFinanceFinance EngineeringEngineering AccountingAccounting Sales & Sales & MarketingMarketing
Human Human ResourcesResources
ProductionProduction EngineeringEngineering AccountingAccounting Sales & Sales & MarketingMarketing
Human Human ResourcesResources
Corporate Office (Staff)Corporate Office (Staff)
Chief Executive OfficerChief Executive Officer
Product AProduct A Product BProduct B
Evolution of Multi-Divisional StructureEvolution of Multi-Divisional Structure
Transparency 11-15
Product AProduct A
North North AmericaAmerica EuropeEurope AsiaAsia
Chief Executive OfficerChief Executive Officer
Product BProduct B Product CProduct C Product DProduct D
ProductionProductionFinanceFinance EngineeringEngineering AccountingAccounting Sales & Sales & MarketingMarketing
Human Human ResourcesResources
Corporate Office (Staff)Corporate Office (Staff)
Evolution of Multi-Divisional StructureEvolution of Multi-Divisional Structure
Cooperative FormCooperative Form Related-ConstrainedRelated-Constrained
MDSMDS Corp. StrategyCorp. Strategy
Strategic Business Strategic Business Unit (SBU) StructureUnit (SBU) Structure Related-LinkedRelated-Linked
Competitive FormCompetitive Form Unrelated /Holding Unrelated /Holding CompanyCompany
Multi-Divisional Corporate Structures (MDS)Multi-Divisional Corporate Structures (MDS)
President
Legal AffairsGov’t Affairs
StrategicPlanning
Corp.R&D
Corp.HRM
Corp.Mktg
Corp.Finance
Headquarters
ProductDivision
ProductDivision
ProductDivision
ProductDivision
ProductDivision
Cooperative Form MDS (Related-Constrained Strategy)
Options for Supplementing the Basic Organization Structure
• Cross-functional task forces
• Self-contained work teams
• Special project teams
• Venture team approach
• Process teams
• Contact managers
• Relationship managers
Transparency 11-19
A Matrix Organization Structure
HeadManufacture
HeadR&D
VentureManager 1
HeadMarketing
HeadFinance
VentureManager 2
VentureManager 3
VentureManager 4
R&DSpecialists
ProductionSpecialists
MarketingSpecialists
FinanceSpecialists
R&DSpecialists
ProductionSpecialists
MarketingSpecialists
FinanceSpecialists
R&DSpecialists
ProductionSpecialists
MarketingSpecialists
FinanceSpecialists
R&DSpecialists
ProductionSpecialists
MarketingSpecialists
FinanceSpecialists
President
Strategic Strategic Business Business Unit AUnit A
DivisionDivision
Chief Executive OfficerChief Executive Officer
SBU’s Help to Solve Complexity IssuesSBU’s Help to Solve Complexity Issues
Corporate Office (Staff)Corporate Office (Staff)
Strategic Strategic Business Business Unit BUnit B
Strategic Strategic Business Business Unit CUnit C
Strategic Strategic Business Business Unit DUnit D
DivisionDivision DivisionDivision
Strategic Business Units (SBUs) are used to organize Strategic Business Units (SBUs) are used to organize related businesses into groups for strategy developmentrelated businesses into groups for strategy development
Transparency 11-21
President
LegalAffairs
Corp.Auditing
Corp.Finance
Headquarters
Division Division Division Division Division
Competitive Form MDS (Unrelated Strategy)
Cooperative Cooperative M-FormM-Form
SBUSBU M-FormM-Form
Competitive Competitive M-FormM-Form
Structural Structural CharacteristicsCharacteristics
Degree ofDegree ofCentralizationCentralization
Use ofUse ofIntegratingIntegratingMechanismsMechanisms
DivisionalDivisionalPerformancePerformance
AppraisalAppraisal
DivisionalDivisionalIncentive Incentive
CompensationCompensation
Type of Type of StrategyStrategy
Related-Related-ConstrainedConstrained
Mixed RelatedMixed Relatedor Unrelatedor Unrelated
Centralized atCentralized atCorporate OfficeCorporate Office
CentralizedCentralizedin SBUsin SBUs
DecentralizedDecentralizedto Divisionto Division
ExtensiveExtensiveSynergiesSynergies
ModerateModerateSynergiesSynergies
FinancialFinancialCriteriaCriteria
Strategic &Strategic &FinancialFinancialCriteriaCriteria
Linked toLinked to CorporateCorporate
PerformancePerformance
Linked toLinked toCorporation,Corporation,
Division & SBUDivision & SBU
Linked toLinked toDivisionalDivisional
PerformancePerformance
NonexistentNonexistentSynergiesSynergies
Subjective/Subjective/StrategicStrategicCriteriaCriteria
Attributes of Various Structural FormsAttributes of Various Structural Forms
UnrelatedUnrelated
Product AProduct A
Chief Executive OfficerChief Executive Officer
Product BProduct B Product CProduct C Product DProduct D
Corporate Office (Staff)Corporate Office (Staff)
A Structure based on Product lines implies a A Structure based on Product lines implies a GlobalGlobal International Strategy International Strategy
International Multi-Divisional StructuresInternational Multi-Divisional Structures
A Structural based on Geographic lines implies aA Structural based on Geographic lines implies aMulti-DomesticMulti-Domestic International Strategy International Strategy
North North AmericaAmerica AustraliaAustraliaEuropeEurope AsiaAsia Latin Latin
AmericaAmerica AfricaAfrica
Chief Executive OfficerChief Executive Officer
Corporate Office (Staff)Corporate Office (Staff)
Product AProduct A Product BProduct B Product CProduct C Product DProduct D
International Multi-Divisional StructuresInternational Multi-Divisional Structures
Strategic OutsourcingStrategic Outsourcing
Capability DevelopmentCapability Development
Technology SharingTechnology Sharing
Building Linkages to Facilitate LearningBuilding Linkages to Facilitate Learning
Critical Functions of Strategic Center Firm (SCF):Critical Functions of Strategic Center Firm (SCF):
Strategic NetworksStrategic Networks
Strategic Center Firm (SFF)Strategic Center Firm (SFF)
A Strategic NetworkA Strategic Network
Network Firms (NF)Network Firms (NF)
A Strategic NetworkA Strategic Network
SCF Manages SCF Manages Strategic OutsourcingStrategic Outsourcing
SCFSCF
NetworkNetworkFirmsFirms
Technology Sharing (TS)Technology Sharing (TS)
Manage development and sharing of TS among Manage development and sharing of TS among partnerspartners
Strategic Center Firm’s function:Strategic Center Firm’s function:
Strategic NetworksStrategic Networks
Capability Development & Learning (CDL)Capability Development & Learning (CDL)
Develop CDL and promote sharing among partnersDevelop CDL and promote sharing among partners
SCF PromotesSCF PromotesTS & CDLTS & CDL
A Strategic NetworkA Strategic Network
A Strategic NetworkA Strategic Network
A Distributed Strategic NetworkA Distributed Strategic Network
Distributed Strategic Center FirmsDistributed Strategic Center Firms
Main Strategic Main Strategic Center FirmCenter Firm
A Distributed Strategic NetworkA Distributed Strategic Network
A Distributed Strategic NetworkA Distributed Strategic Network
MainSCF