1. Organization Structure and Control

2. Structure Follows Strategy
Changes in corporate strategy lead to changes in organizational structure.
New strategy is created
New administrative problems emerge
Economic performance declines
New appropriate structure is invented
Profit returns to its previous levels

3. Strategy Formulation Determinants
The determination of strategy formulation involves answering a set of questions in the relevant areas, such as:
what is the target group of customers?
What are their needs and preferences?
What segment of market do they represent?
What is the geographic area of the market to be covered?

4. Strategy Formulation Determinants
What will be market niche?
What specific products or services should be produced?
Which products should receive the maximum emphasis?
What ought to be the Price- Quality relationship of the Product lines?
What are the distinctive characteristics of the Product?
Can these characteristics be differentiated from those of similar competing products?

5. Stages of corporate development
Simple Structure
Functional Structure
Divisional Structure

6. Simple Structure Stage I: Entrepreneur
Decision making tightly controlled
Little formal structure
Planning short range/reactive
Flexible and dynamic

7. Functional Structure Stage II: Management team
Functional specialization
Delegation decision making
Concentration/specialization in industry

8. Functional Structure Disadvantages Advantages
Functional orientation creates communication problems.
Performance and profitability measurement problems.
Location versus function problems (coordination).
Strategic problems due to structural (vertical and horizontal) mismatches.
Advantages
Task grouping facilitates specialization and productivity.
Better monitoring of work processes, reduced costs.
Greater control over organizational activities.

9. Divisional Structure Stage III: Diverse product lines
Decentralized decision making
Almost unlimited resources

10. Evaluation & Control

11. Types of Controls Behaviour control
How something is done through policies, procedures, rules, SOP’s.
ISO 9000 Standards Series
ISO Standards Series
Output control
What is to be accomplished; focus on end result through performance targets.
Input control
Resources – skills, abilities, values, motives.

12. Primary Measures of Performance
Traditional Financial Measures
Return on investment (ROI)
Earnings per share (EPS)
Return on equity (ROE)
Operating cash flow
Free cash flow

13. Primary Measures of Performance
Shareholder
Shareholder value
Economic value added (EVA)
Market value added (MVA)

14. Primary Measures of Performance
Balanced Scorecard Approach
Financial
Customer
Internal business perspective
Innovation and learning

15. THANK YOU!