Strategic Management Concepts – Chapter 11: Organizational Structure and Controls

Vocabulary flashcards covering key terms from Chapter 11 on organizational structure, controls, and related network concepts.

Organizational Structure

The formal arrangement of jobs and reporting relationships in a firm, designed to balance the need for stability with the need for flexibility.

Organizational Controls

Information-based procedures and systems used to guide and monitor the implementation of strategy.

Strategic Controls

Controls that assess the fit between strategy and the external environment, emphasizing long-term, qualitative performance.

Financial Controls

Controls that track short-term, quantitative indicators such as ROI, sales growth, and EPS.

Strategy–Structure Relationship

The reciprocal link in which strategy should shape structure, though structure can in turn influence strategic choices.

Simple Structure

A loose, informal form with one owner–manager, low specialization, few rules, and centralized decision making.

Functional Structure

Groups employees by business functions; shifts in specialization, centralization, and formalization support either cost leadership or differentiation.

Multidivisional (M-Form) Structure

Organizes the firm into semi-autonomous product or geographic divisions, each with its own functions, overseen by corporate headquarters.

Strategic Business Unit (SBU) Structure

A “division over divisions” grouping related businesses; SBUs may foster either cooperation or competition among their divisions.

Cooperative Form (of M-Form)

An M-form variant that encourages resource sharing and collaboration among divisions to exploit economies of scope.

Competitive Form (of M-Form)

An M-form variant that stimulates internal competition among divisions to improve performance and discipline capital allocation.

Matrix Structure

Overlays two or more lines of authority (e.g., function and product), so employees report to multiple managers.

Worldwide Geographic Area Structure

Groups international operations by region, supporting a multidomestic strategy that stresses local responsiveness.

Worldwide Product Divisional Structure

Groups international operations by product line, supporting a global strategy that emphasizes worldwide integration.

Combination (Hybrid) Structure

A flexible mix of multiple structures—often used in transnational strategies or whenever diverse structural needs coexist.

Network Structure

A set of independent firms linked by contracts and alliances, coordinated by a strategic center firm to deliver value.

Strategic Center Firm

The hub firm in a network that orchestrates partners by coordinating outsourcing, developing competencies, and supporting technology and learning.

Outsourcing Coordination

Arranging and managing external partners to perform activities previously done in-house, often led by the strategic center firm.

Competency Development and Support

Network activities that help partners build, share, and leverage distinctive capabilities.

Technology Development and Support

Efforts by the network’s center firm to provide or facilitate access to new technologies among partners.

Race to Learn

The continuous effort in networks to acquire new knowledge and capabilities faster than rivals.

Distributed Strategic Networks

Network configurations where multiple hub firms coordinate clusters of partners across regions or industries.