1. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-1 Chapter 13: Matching Structure and Control to Strategy Text by Charles W. L. Hill Gareth R. Jones Multimedia Slides by Milton M. Pressley Univ. of New Orleans

2. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-2Preview 4Structure and Control at the Functional Level 4Structure and Control at the Business Level 4Designing a Global Structure 4Structure and Control at the Corporate Level 4Special Issues in Strategy- Structure Choice

3. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-3 Structure and Control at the Functional Level ManufacturingManufacturing Research and DevelopmentResearch and Development SalesSales

4. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-4 Table 13.1: Generic Strategy, Structure, and Control Structure and Control at the Business Level

5. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-5 Table 13.1: Generic Strategy, Structure, and Control Structure and Control at the Business Level

6. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-6 Table 13.1: Generic Strategy, Structure, and Control Structure and Control at the Business Level

7. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-7 Designing a Global Structure 4Multidomestic Strategy 4International Strategy 4Global Strategy 4Transnational Strategy Recall from Chapter 8:

8. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-8 Table 13.2: Global Strategy-Structure Relationships Designing a Global Structure (Continued) Multi- domesticInternationalGlobal Trans- national Low High Centrali- zation of Authority Decentral- ized to National Unit CoreCom- petencies Centralized. Others De- centralized to National Units Central- ized at Optimal Global Location Simultan- eously Central- ized and Decentral- ized Horizontal Differentia- tion Global Area Structure International Division Structure Global Pro-duct Group Structure Global Matrix Structure Need for Complex Integrating Mechanisms LowMediumHighVery High Organiza- tional Culture Not Important Quite Important Very Important Need for Coordination Bureaucratic Costs

9. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-9 Figure 13.1: Global Area Structure Corporate Headquarters North American Region South American Region European Region Pacific Region

10. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-10 Table 13.2: Global Strategy-Structure Relationships CoreCom- petencies Centralized. Others De- centralized to National Units Central- ized at Optimal Global Location Simultan- eously Central- ized and Decentral- ized GlobalInternational Division Structure Global Pro-duct Group Structure Global Matrix Structure MediumHighVery High Quite Important Very Important Designing a Global Structure (Continued) Multi- domesticInternationalGlobal Trans- national Low High Centrali- zation of Authority Decentral- ized to National Unit Horizontal Differentia- tion Need for Complex Integrating Mechanisms Organiza- tional Culture Need for Coordination Bureaucratic Costs Area Structure Low Not Important

11. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-11 Figure 13.2: International Division Structure Corporate Headquarters Product Group 1 United States United Kingdom JapanFrance Product Group 2 Product Group 3

12. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-12 Table 13.2: Global Strategy-Structure Relationships Need for Coordination Bureaucratic Costs Designing a Global Structure (Continued)

13. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-13 Figure 13.3: Global Product Group Structure Corporate Headquarters Division 1Division 2 Division 3 International Division United States United Kingdom JapanFrance

14. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-14 Table 13.2: Global Strategy-Structure Relationships Need for Coordination Bureaucratic Costs Designing a Global Structure (Continued)

15. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-15 Figure 13.4: Global Matrix Structure N. American SBU S. American SBU Pacific SBU Product Group 1 Product Group 2 Product Group 3 Individual Operating Companies

16. Copyright  1998 by Houghton Mifflin Company. All rights reserved. Multi- domesticInternationalGlobal Trans- national Low High Centrali- zation of Authority Decentral- ized to National Unit CoreCom- petencies Centralized. Others De- centralized to National Units Central- ized at Optimal Global Location Simultan- eously Central- ized and Decentral- ized Horizontal Differentia- tion Global Area Structure International Division Structure Global Product Group Structure Global Matrix Structure Need for Complex Integrating Mechanisms LowMediumHighVery High Organiza- tional Culture Not Important Quite Important Very Important 13-16 Table 13.2: Global Strategy-Structure Relationships Designing a Global Structure (Continued) Need for Coordination Bureaucratic Costs

17. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-17 Table 13.3: Corporate Strategy and Structure and Control Structure and Control at the Corporate Level

18. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-18 Table 13.3: Corporate Strategy and Structure and Control Structure and Control at the Corporate Level

19. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-19 Table 13.3: Corporate Strategy and Structure and Control Structure and Control at the Corporate Level

20. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-20 Special Issues in Strategy-Structure Choice Mergers, Acquisitions, and StructureMergers, Acquisitions, and Structure Internal New Ventures and StructureInternal New Ventures and Structure Network Structure and the Virtual OrganizationNetwork Structure and the Virtual Organization

21. Copyright  1998 by Houghton Mifflin Company. All rights reserved. 13-21 Chapter Summary   STRUCTURE AND CONTROL AT THE FUNCTIONAL LEVEL   STRUCTURE AND CONTROL AT THE BUSINESS LEVEL   DESIGNING A GLOBAL STRUCTURE   STRUCTURE AND CONTROL AT THE CORPORATE LEVEL   SPECIAL ISSUES IN STRATEGY- STRUCTURE CHOICE