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Expert answer:mgt problems - colle writers

Expert answer:mgt problems

Solved by verified expert:1. students should locate a recent news article (no more than six months old please) that is relevant to the subjects/concepts introduced in that module/chapter and prepare a short analysis/summary of the news article. The analysis/summary should be posted onto your blog site on Canvas before the due date. Each blog entry should consist of a link to the article you have found and your analysis as to why and how it is related to the topic introduced in that module (one paragraph with 150-200 words). Please do not use sources such as news paper columns, commentaries, blogs, case studies, white papers, research reports and the like as your chosen news articles. According to Merriam-Webster, news is a report of recent events.2. Read the attached case “Strategy Implementation at Dell Computer” and answer the following questions. You are encouraged to comment on others’ answers.a. What organizational structures has Dell Computer used since its inception? What seemed to drive all these changes in the firm’s organizational structure? b. How does the firm use organizational structures, organizational controls and culture to support its low-cost strategy?3. Read the attached case “Ford’s CEO Designs a New Global Structure” and answer the following questions. You are encouraged to comment on others’ answers.a. Which worldwide structure did Ford use initially? What problems did the structure have?b. How did the CEO restructure Ford? What is the rationale for the changes?4. You may still remember the exercise “Alaska Gold Mine” in Module 1. Revisit the first part of the exercise then read the second part of the exercise (attached) and answer the following questions.a. What was your choice? Explain the rationale. b. How are you going to implement the plan? Please try to be specific and detailed.
strategy_implementation_at_dell_computer.pdf

ford_designs_a_new_global_structure.pdf

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ch11__1_.pptx

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Chapter 12 Implementing Strategy in Companies That Compete in a Single Industry
8. What are the sources of your company’s distinctive competencies? Which functions are
most important to it? How does your company design its structure, control, and culture to enhance its (a) efficiency, (b) quality,
(c) innovativeness, and (d) responsiveness to
customers?
9. How does it design its structure and control
systems to strengthen its business model? For
example, what steps does it take to further
cross-functional integration? Does it have a
functional, product, or matrix structure?
419
10. How does your company’s culture support its
business model? Can you determine any ways
in which its top management team influences
its culture?
11. Based on this analysis, would you say your
company is coordinating and motivating its
people and subunits effectively? Why or why
not? What changes (if any) would you make
to the way your company’s structure operates? What use could it make of restructuring
or reengineering?
Strategy Implementation at Dell Computer
Dell Computer was one of the fastest-growing companies of the 1990s, and its stock price increased at
the rate of 100% per year, delighting its stockholders. Achieving this high return has been a constant
challenge for Michael Dell. One of his biggest battles
has been to manage and change Dell’s organizational
structure, control systems, and culture as his company grows.
Michael Dell was 19 in 1984, when he took
$1,000 and spent it on the computer parts he assembled into PCs that he sold over the phone. Increasing
demand for his PCs meant that within a few weeks,
he needed to hire people to help him. Soon he found
himself supervising three employees who worked
together around a six-foot table to assemble computers while two more employees took orders over
the phone.54
By 1993, Dell employed 4,500 workers and was
hiring more than 100 new workers each week just to
keep pace with the demand for the computers. When
he found himself working 18-hour days managing the
company, he realized that he could not lead the company single-handedly. The company’s growth had to
be managed, and he knew that he had to recruit and
hire strategic managers who had experience in managing different functional areas, such as marketing,
finance, and manufacturing. He recruited executives
from IBM and Compaq. With their help, he created
a functional structure, one in which employees were
grouped by their common skills or tasks they performed, such as sales or manufacturing, to organize
the value chain activities necessary to deliver his PCs
to customers. As a part of this organizing process,
Dell’s structure also became taller, with more levels
in the management hierarchy, to ensure that he and
his managers had sufficient control over the different activities of his growing business. Michael Dell
delegated authority to control Dell’s functional value
chain activities to his managers, which gave him the
time he needed to perform his entrepreneurial task of
finding new opportunities for the company.
Dell’s functional structure worked well and, under
its new management team, the company’s growth
continued to soar. Moreover, Dell’s new structure had
given functional managers the control they needed to
squeeze out costs, and Dell had become the lowestcost PC maker. Analysts also reported that Dell had
developed a lean organizational culture, meaning
that employees had developed norms and values that
emphasized the importance of working hard to help
each other find innovative new ways of making products to keep costs low and increase their reliability.
Indeed, Dell rose to the top of the customer satisfaction rankings for PC makers because few customers
420
Part 4 Implementing Strategy
complained about its products. Its employees became
known for the excellent customer service they gave
to PC buyers who were experiencing problems with
setting up their computers.
However, Michael Dell realized that new and
different kinds of problems were arising. Dell was
now selling huge numbers of computers to different kinds of customers, for example, home, business,
and educational customers and different branches
of government. Because customers were demanding
computers with different features or more computing power, the company’s product line broadened
rapidly. It became more difficult for employees to
meet the needs of these customers efficiently because
each employee needed information about all product
features or all of Dell’s thousands of different sales
offers across its product range.
By the late 1990s, Michael Dell moved to change
his company to a market structure and created separate divisions, each geared to the needs of a different
group of customers: a consumer division, a business division, and so on. In each division, teams of
employees specialized in servicing the needs of one of
these customer groups. This move to a more complex
structure also allowed each division to develop a
unique subculture that suited its tasks, and employees were able to obtain in-depth knowledge about the
needs of their market that helped them to respond
better to their customers’ needs. So successful was
this change in structure and culture that by 2000,
Dell’s revenues were more than $35 billion and its
profits in excess of $3 billion, a staggering increase
from 1984.55
Michael Dell has continued to change his company’s structure in the 2000s to respond to changing
customer needs and increasing competitive challenges from Apple and HP. For example, Michael
Dell realized that he could leverage his company’s
strengths in materials management, manufacturing,
and Internet sales over a wider range of computer
hardware products. He decided to begin assembling
servers, workstations, and storage devices to compete
with IBM, Sun, and HP. The increasing importance
of the Internet also led him to pay more attention to
more specialized groups of customers and find the
best way to customize its approach to best meet each
group’s specific needs over the Internet. Today, for
example, Dell can offer large and small companies
and private buyers a complete range of computers,
workstations, and storage devices that can be customized to their needs.
To help coordinate its growing activities, Dell is
increasingly making use of its corporate Intranet to
standardize activities across divisions and integrate
its activities across functions to reduce costs. Dell’s
hierarchy is shrinking as managers increasingly
delegate decision making to employees who use its
advanced IT to access the information they need to
provide excellent customer service. To reduce costs,
Dell has also outsourced most of its customer service function to India.56 As a result of these moves,
Dell’s smaller United States workforce has become
even more committed to maintain a low-cost advantage. Its cost-conscious culture is more than ever an
important factor affecting its competitive advantage
that has been threatened by the many cost-saving
moves made by competitors such as Apple and HP
that have imitated and even improved on its costsaving strategies.57
Case Discussion Questions
1. Why has Dell moved to different kinds of organizational structures over time?
2. Has Dell’s performance been improved?
3. Search the Internet to find out how Dell has
been trying to increase its performance and how
its competitors such as Apple and HP have also
been working to improve theirs.
454
Part 4 Implementing Strategy
Ford’s CEO Designs a New Global Structure
Designing a global organization structure to operate efficiently across many countries is a critical issue
for multinational companies, as Ford has discovered
over time. Ford realized early in its history that a
major opportunity to increase its profitability was to
take its American car-manufacturing skills and apply
them in countries abroad. Over time, it established
car-manufacturing divisions in different countries
in Europe, Asia, and Australia. Ford decentralized
decision-making authority to each global division,
which controlled its own activities and developed
cars suited to the local market. The result was that
each division came to operate independently from
its United States parent company. Ford of Europe,
for example, became the largest and most profitable
carmaker in Europe.
Ford remained a highly profitable company until
Japanese carmakers began to flood the world with
their small, reliable, low-priced cars in the 1980s.
As car buyers began to buy the Japanese imports in
large numbers, Ford tried to draw on the skills of
its European unit to help build smaller, more fuelefficient cars for the United States market. But it had
never before tried to get its United States and European design and manufacturing units to cooperate;
this proved difficult to achieve because its decentralized global organizational structure did not encourage them to cooperate. In the 1990s, Ford embarked
on a massive project to create a new global-matrix
structure that would solve the decentralized task
and authority problems that were preventing it from
utilizing its resources effectively.
In the 2000 plan, Ford laid out a timetable of
how all its global carmaking units would learn to
cooperate using one set of global support functions,
such as design, purchasing, and so on. Country
managers continued to resist the changes, however,
to preserve their country empires and forced Ford
to redesign its proposed global structure again and
again. By the mid-2000s, Ford’s United States, European, and Asia/Pacific divisions were still operating
as a collection of different autonomous “empires.”
Ford had failed to lower its cost structure or design
and make a profitable “world car” that could be sold
to customers around the globe.
Once again, Ford decided to restructure itself.
It moved to a “world structure,” in which one set
of managers was given authority over the whole of
a specific global operation such as manufacturing
or car design. Then Ford began to design cars for
the global market. Its new structure never worked
to speed car design and production, even as it constantly changed global lines of authority and the
locations in which it operated to increase profitability. Ford went through multiple reorganizations
to try to meet the Japanese challenge, but nothing
worked. Losing billions of dollars, Ford announced
in 2006 a revamped “Way Forward” plan to turn
around its United States and global operations,
a plan that called for cutting 44,000 jobs; closing
16 plants; and freshening 70% of the company’s
Ford, Mercury, and Lincoln car lineup.
In October 2006, Ford also appointed a new
president and CEO, Alan Mulally, an expert in organizational design, to help turn around its operations.
Mulally, a former Boeing executive, had led that
company’s global reorganization effort. He began
to work out how to change Ford’s global structure
to reduce costs and speed product development. In
the structure Mulally inherited, Ford’s American
unit reported to the CEO, but its other global and
functional operations reported to the next two most
senior executives, Mark Fields, president of Ford’s
Americas operation, and Mark Schulz, president of
international operations. Mulally decided that Ford’s
downsizing should be accompanied by a major reorganization of its hierarchy, and he decided to flatten
Ford’s structure and recentralize control. At the same
time, however, he put the focus on teamwork and
adopted a cross-functional approach to handling the
enormous value chain challenges that still confronted
the organization.
The position of president of international operations was eliminated, and Mark Fields continues to
report to Mulally but so also do the heads of the
other two world regions: Lewis Booth, head of Ford
of Europe, and John Parker, head of Ford of Asia
Pacific and Africa and Mazda. Two levels in the hierarchy are gone, and Mulally’s new organizational
design clearly defines each global executive’s role
Chapter 13 Implementing Strategy in Companies That Compete across Industries and Countries
in the company’s hierarchy. Ford can begin acting
like one company instead of separate global units,
each with their own interests.33 In addition, the
heads of its global value chain functions also now
report directly to Mulally, not to Fields. These heads
include Tony Brown, global head of purchasing;
Nick Smither, head of IT; Richard Parry-Jones, chief
technical officer; and Bennie Fowler, head of quality
and advanced manufacturing engineering. Mulally’s
goal is to provide a centralized focus on using the
company’s global functional assets to better support
its carmaking business units.
At the same time, Mulally also took a major
restructuring step, announcing the creation of a new
position, global product development chief, who
is responsible for overseeing the development of
Ford’s entire global lines of vehicles. He appointed
Derrick Kuzak, head of product development in the
Americas, to head Ford’s new global engineering
design effort, and he also reports directly to Mulally.
Kuzak oversees efforts to streamline product development and engineering systems around the world.
As Mulally commented, “An integrated, global product development team supporting our automotive
business units will enable us to make the best use
of our global assets and capabilities and accelerate
development of the new vehicles our customers prefer, and do so more efficiently.”34
Mulally’s goal was to force a cross-functional
approach on all his top managers—one that he will
455
personally oversee—to standardize its global carmaking and allow functional units to continuously
improve quality, productivity, and the speed at which
new products can be introduced. But beyond streamlining and standardizing its approach, its new-product
development group must also ensure that its new
vehicles are customized to better meet the needs of
regional customers. All Ford’s executives now understand the company’s very survival was at stake; they
had to work together to accelerate efforts to reduce
costs and catch up to more efficient competitors such
as Toyota.
Despite the fact that in 2009 Ford was still losing
billions of dollars as the 2008 recession continued, its
new global organizational structure did seem to be
working. Ford was in the best competitive position
of any United States carmaker, and it had not needed
to borrow billions of dollars from the United States
government so that it could continue to operate. Only
time will tell, but Mulally remains confident.35
Case Discussion Questions
1. What kind of global strategy did Ford pursue at
the beginning? What kind of global strategy does
it pursue now?
2. In what main ways has Ford changed its global
structure to allow it to coordinate the production
and sale of its products more effectively around
the world? In particular, what different forms of
organizational structure has it adopted?
Chapter 11
Organizational Structure and Controls
Organizational Structure
• Organizational structure specifies:
– the firm’s formal reporting relationships,
procedures, controls, and authority and
decision-making processes
– the work to be done and how to do it,
given the firm’s strategy or strategies.
• It is critical to match organizational
structure to the firm’s strategy.
Organizational Controls
• Purposes of organizational controls
– Guide the use of strategy
– Indicate how to compare actual results with
expected results
– Suggest corrective actions to take when the
difference between actual and expected results
is unacceptable
• Two types of organizational controls
– Strategic controls
– Financial controls
Organizational Controls
Strategic
Controls
Organizational
Controls
Financial
Controls
• Strategic Controls: Subjective criteria
– Concerned with examining the fit between:
• what the firm might do (opportunities in its
external environment).
• what the firm can do (competitive advantages).
– Evaluate the degree to which the firm focuses
on the requirements to implement its strategy
Organizational Controls
Strategic
Controls
Organizational
Controls
• Financial Controls: Objective criteria
– Accounting-based measures
• Return on investment
• Return on assets
– Market-based measures
• Economic Value Added (EVA)
Financial
Controls
Strategy vs. Structure: Evolutionary Patterns
• Chandler found firms tend to grow in a predictable
pattern, including the areas of volume, geography,
integration (horizontal & vertical) & product/
business diversification
– Growth pattern implies structural changes!
• Several structure forms, used to implement
strategies, evolved including
– 1. Simple
– 2. Functional
– 3. Multidivisional
Strategy and Structure Growth Pattern
Strategy and Structure:
Simple Structure
• Owner-manager
– Makes all major decisions directly
– Monitors all activities
• Staff
– Serves as an extension of the manager’s supervisor
authority
• Matched with focus strategies and businesslevel strategies
– Commonly complete by offering a single product line
in a single geographic market
Strategy and Structure:
Functional Structure
• Chief Executive Officer (CEO)
– Limited corporate staff
• Functional line managers in dominant organizational
areas of:






production
marketing
engineering
human resources
accounting
R&D
• Supports use of business-level strategies and some
corporate-level strategies
– Single or dominant business with low levels of diversification
Strategy and Structure:
Multidivisional Structure
• Strategic Control
– Operating divisions function as separate
businesses or profit centers.
• Top corporate officer delegates
responsibilities to division managers:
– for day-to-day operations.
– for business-unit strategy.
• Appropriate as firm grows through
diversification
Multidivisional Structure (cont’d)
• Three Major Benefits
1. Corporate officers are able to more accurately
monitor the performance of each business, which
simplifies the problem of control.
2. Facilitates comparisons between divisions, which
improves the resource allocation process.
3. Stimulates managers of poorly performing divisions
to look for ways of improving performance.
Matches between Business-Level Strategies
and the Functional Structure
• Different forms of the functional organizational
structure are matched to:
– cost leadership strategy
– differentiation strategy
– integrated cost leadership/differentiation strategy
• Differences in these forms are seen in three
important structural characteristics:
– specialization (number and types of jobs)
– centralization (decision-making authority)
– formalization (formal rules and work procedures)
Using the Functional Structure to Implement a
Cost Leadership Strategy
• Operations is the main function
– Process engineering is emphasized over
research and development
– Large centralized staff oversees activities
– Formalized procedures guide actions
– Structure is mechanical
– Job roles are highly structured
Using the Functional Structure to Implement a
Cost Leadership Strategy
Using the Functional Structure to Implement
the Differentiation Strategy
• Marketing is the main function for tracking
new product ideas.
– New product R&D is emphasized
– Most functions are decentralized
– Formalization is limited to foster change and
promote new ideas
– Overall structure is organic
– Job roles are less structured
Functional Structure for Implementing a
Differentiation Strategy
Matches between Corporate-Level Strategies
and the Multidivisional Structure
Cooperative Form of the Multidivisional Structure
Cooperative Form of the Multidivisional Structure for
Implementing a Related Constrained Strategy
• Cooperative …
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