Strategic Management: Formulation and Implementation

Changes In Center Of Gravity

Changes in the center of gravity usually occur by a new star-up at a new center of gravity rather than by a shift in the center of established firms. Changing of gravity is difficult because it requires a dismantling of the current power structure, rejection of parts of the old culture, and establishing all new management systems.

The companies that are successful are those that began as downstream companies and established their center of gravity there.

Strategy And Structure

Each strategy has an associated organizational structure consistent with the above view of strategy and diversification. These relationships are summarized in the tale below.

Strategy Structure
Single businessFunctional
Vertical by Products Functional with profit centers
Related businessesDivisional
Intermediate businessesMixed structures
Unrelated Businesses Holding company