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    Competitive Rivalry and Competitive Dynamics: Hitt, Ireland, and Hoskisson

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    Ranbir Kapoor

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    Competitive Rivalry and Competitive Dynamics: Hitt, Ireland, and Hoskisson

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    Ranbir Kapoor
    22 views13 pages

    Original Title

    HIH SM8e ch11

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    Download as ppt, pdf, or txt
    22 views13 pages

    Competitive Rivalry and Competitive Dynamics: Hitt, Ireland, and Hoskisson

    Uploaded by

    Ranbir Kapoor

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    You are on page 1of 13

    Chapter 11

    Competitive Rivalry and


    Competitive Dynamics

    Hitt, Ireland, and Hoskisson


    Organizational structure and controls
     Organizational structure  Organizational controls
     The firm’s formal reporting  Guides the use of strategy,
    relationships, procedures, indicates how to compare
    controls, authority and
    actual and expected results,
    decision-making processes.
    suggests actions to take to
     It specifies the work to be
    done and how to do it, given improve performance when
    the firm’s strategy. it falls below expectations.
     It influences how managers
    work and the decisions
    resulting from that work.

    A proper match between strategy and structure


    can lead to a competitive advantage.
    Copyright © 2008 Cengage
    Organizational controls

     Organizational controls
     Strategic controls (largely subjective criteria)
     financial controls (largely objective criteria)
     Both controls are critical, although their
    degree of emphasis varies based on
    individual matches between strategy and
    structure.

    Copyright © 2008 Cengage


    Strategy and structure

     Strategy and structure - a reciprocal


    relationship
     Although strategy has a stronger influence on
    structure.
     Firms tend to change structure when declining
    performance forces them to do so.
     Effective managers anticipate the need for
    structural change and quickly modify structure to
    better accommodate the firm’s strategy when
    evidence calls for that action.

    Copyright © 2008 Cengage


    Simple structure
     Simple structure
     A structure in which the owner-manager makes all major
    decisions and monitors all activities while the staff serves
    as an extension of the manager’s supervisory authority.
     Associated strategy
     Focus strategies, often used in small firms, require a simple
    structure until such time that the firm diversifies in terms of
    products and/or markets.

    Copyright © 2008 Cengage


    Functional structure
     The functional structure
     Used to implement business-level strategies.
     Structure includes a chief executive officer and a limited
    corporate staff, with functional line managers in dominant
    organizational areas such as production, accounting,
    marketing, R&D, engineering, and human resources.
     Associated strategy
     Cost leadership strategy requires a centralized functional
    structure—one in which manufacturing efficiency and
    process engineering are emphasized.
     Differentiation strategy uses a functional structure that
    decentralizes implementation-related decisions.

    Copyright © 2008 Cengage


    Multidivisional structures

     The multidivisional (M-form) structure


     Consists of operating divisions, each representing
    a separate business or profit center in which the
    top corporate officer delegates responsibilities for
    day-to-day operations and business-unit strategy
    to division managers.
     Cooperative M-form
     SBU M-form structure
     Competitive M-form structure

    Copyright © 2008 Cengage


    Characteristics of the Structures Necessary to
    Implement the Related Constrained, Related Linked,
    and Unrelated Diversification Strategies
    Overall Structural Form

    Cooperative M-Form SBU M-Form Competitive M-Form


    Structural (Related Constrained (Related Linked (Unrelated Diversification
    Characteristics Strategy)a Strategy)a Strategy)a
    Centralization of Centralized at Partially centralized Decentralized to
    operations corporate office (in SBUs) divisions
    Use of integration Extensive Moderate Nonexistent
    mechanisms
    Divisional Emphasize subjective Use a mixture of Emphasize objective
    performance (strategic) criteria subjective (strategic) (financial) criteria
    appraisals and objective
    (financial) criteria
    Divisional incentive Linked to overall Mixed linkage to Linked to divisional
    compensation corporate corporate, SBU, and performance
    performance divisional performance

    Copyright © 2008 Cengage


    Multi-domestic strategy

     The multi-domestic strategy


     Implemented through the worldwide geographic
    area structure
     emphasizes decentralization
     locates all functional activities in the host country
    or geographic area.

    Copyright © 2008 Cengage


    Transnational strategy

     Transnational strategy
     Combines local responsiveness of multi-domestic
    strategy and global efficiency of global strategy,
    implemented through the combination structure
     Combination structure - difficult to organize and manage
    because it must be simultaneously centralized and
    decentralized, integrated and nonintegrated, and
    formalized and non-formalized

    Copyright © 2008 Cengage


    Implementing transnational strategy

     2 structural designs suggested


     Both have geographic and product-oriented divisions
     Matrix structure
     Unites local market and product expertise into teams
     Problem: employees may be accountable to multiple
    managers
     Reporting relationships may be complex and vague
     Hybrid structure
     Some oriented toward products, others toward market
    areas

    Copyright © 2008 Cengage


    Cooperative strategies and network structures

     Cooperative strategies
     Are increasingly important to competitive success
     Are implemented through organizational
    structures framed around strategic networks.
     Strategic center firms play a critical role in
    managing strategic networks.

    Copyright © 2008 Cengage


    Network strategies

     Strategic network
     Group of firms formed to create value by
    participating in multiple cooperative arrangements
     Strategic center firm
     Foundation for the strategic network’s structure.
     Strategic center firm has 4 primary tasks
     Strategic outsourcing
     Competencies
     Technology
     Race to learn

    Copyright © 2008 Cengage

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