Strategic Management: Formulation and Implementation

Geographic Structure

Another basic form structural grouping is geographic structure, in which activities and personnel are grouped by specific geographic locations. Each geographic unit includes all functions required to produce and market products in that region. The strengths and weaknesses of a geographic structure are listed in Figure 33.

Organizing according to geographic areas or territories is rather common structural form for largescale enterprises whose strategies need to be tailored to fit the particular needs and features of different geographical areas.

Decentralized Business Units

The decentralized business units was pioneered in the 1920s by General Motors and DuPont. Each unit or divisionis generally autonomous, with a division manager responsible for performance and holding complete strategic and operational decision making authority. A typical line of business organizational structure isshown in Figure 34.