Strategic Management: Formulation and Implementation

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

Managing Diversification

An organizations implements diversification must monitor and manage its strategy. The two major tools for managing diversification are organization structure and portfolio management techniques. How organziatio0ns structure can be used to manage a diversification strategy I discuss in detail in Chapter 3.

In Volume 2 I shall show portfolio management techniques that diversified organizations use to make decisions about those businesses to engage in and how to manage these multiple businesses in order to maximize corporate performance.