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CHAPTER 13

Implementing Strategy in Companies That Compete Across Industries and Countries


01Summary of Chapter
20. A company uses organizational design to combine structure, control systems, and culture in ways that allow it to implement its multibusiness model successfully. 30. As a company grows and diversifies, it adopts a multidivisional structure. Although this structure costs more to operate than a functional or product structure, it economizes on the bureaucratic costs associated with operating through a functional structure and enables a company to handle its value creation activities more effectively. 40. As companies change their corporate strategies over time, they must change their structures because different strategies are managed in different ways. In particular, the move from unrelated diversification to vertical integration to related diversification increases the bureaucratic costs associated with managing a multibusiness model. ach re!uires a different combination on structure, control, and culture to economize on those costs. "0. As a company moves from a localization to an international, global standardization, and transnational strategy, it also needs to switch to a more comple# structure that allows it to coordinate increasingly comple# resource transfers. $imilarly, it needs to adopt a more comple# integration and control system that facilitates resource sharing and the leverage of competencies around the globe. %hen the gains are substantial, companies fre!uently adopt a global&matri# structure to share 'nowledge and e#pertise or to implement their control systems and culture.

(0. )o encourage internal new venturing, companies must design an internal venturing process that gives new&venture managers the autonomy they need to develop new products. *orporate managers need to provide the oversight that 'eeps new&venture managers motivated and on trac'. +0. )he profitability of mergers and ac!uisitions depends on the structure and control systems that companies adopt to manage them and the way a company integrates them into its e#isting businesses. ,0. I) is having increasingly important effects on the way multibusiness companies implement their strategies. -ot only does I) help improve the efficiency with which the multidivisional structure operates, but it also allows for the better control of comple# value&chain activities. )he growth of outsourcing has also been promoted by I), and some companies have developed networ' structures to coordinate their global value&chain activities.