Anna Rosinus

summary of 1
st
lectures
strategy
formulation
strategy
implementation
evaluation and
control
environmental
scanning
1 2
3 4
external analysis
(PESTLE, 5Forces,
hypercompetition &
benchmarking)
situation analysis &
business strategy
(SWOT & TOWS,
Vision/Mission, Porters
Generic Strategies,
strategic groups)
m
a
r
k
e
t

g
r
o
w
t
hh
ig
h
(
2
0
%
)
lo
w
(
0
%
)
1
0
%
low (0) medium (~1) high
relative market share
A
B
C
D
internal analysis
(VRIO, value chain,
corporate culture)
corporate strategy
(directional strategies,
portfolio analysis)
Anna Rosinus
Strategic management Process (2)
Mission
Reason for
existence

Objectives
What resul t s t o
accompl i sh by
when
Strategies
Plan to achieve
the mission &
objectives
Policies
broad guidelines
for decision-
making



Environmental
Scanning
Strategy Formulation Strategy
Implementation
Evaluation
and Control
Anna Rosinus
Strategic management Process (2)
Mission
Reason for
existence

Objectives
What resul t s t o
accompl i sh by
when
Strategies
Plan to achieve
the mission &
objectives
Policies
broad guidelines
for decision-
making



Environmental
Scanning
Strategy Formulation Strategy
Implementation
Evaluation
and Control
2. Environmental
Scanning & Industry
Analysis
3. Internal Scanning &
Organisational
Analysis
4. Strategy Formulation
a. Situation Analysis & Business
Strategy
b. Corporate Strategy
c. Functional Strategy &
Strategic Choice
5. Strategy Implementation
a. Organising for
Action
b. Staffing & Directing
6. Evaluation &
Control
Quiz!!!
Anna Rosinus
Strategy Implementation
what are the different steps in strategic management?
strategy
formulation
strategy
implementation
evaluation and
control
environmental
scanning
1 2
3 4
situation
analysis &
business
strategy
corporate
strategy
functional
strategy and
strategic choice
Anna Rosinus
Hierarchy of Strategy
what is the relationship between different types of strategies?
adapted from Wheelen, Hunger (2012)
Corporate Strategy:
what do we want to do? in which industries do we want to be?
overall
direction
industries &
markets to
target
Business Strategy
how can we outpace our competitors?
competitive
strategies
cooperative
strategies
Functional Strategies
which resources shall we use, where&how?
Resource
Allocation
Maximisation of
Productivity
121
Anna Rosinus
Strategy Formulation: Functional Strategy & Strategic Choice
functional strategies
Marketing Strategy
Financial Strategy
Research and Development (R&D) Strategy
Operations Strategy
Purchasing Strategy
Logistics Strategy
Human Resource Management (HRM) Strategy
Information Technology Strategy
strategies to avoid
strategic choices: selecting the best strategy
development of policies
what to expect?
122
Anna Rosinus
Functional Strategies
what are? strategies of the functional units
what is their purpose? contribute to achieve corporate and
business unit objectives and strategies
how? by maximising resource productivity
multidivisional corporations have several business units (divisions),
each with its own set of functional units
these functional units have their own functional strategies
e.g. in a corporation with 4 divisions there are 4 Marketing strategies
how to achieve corporate and business unit objectives?
123
Anna Rosinus
Functional Strategies
functional units (and their strategies) shall
develop and nurture distinctive competencies
in order to provide a company or business unit with a competitive
advantage
=> determining functional strategy =
identify business units core competencies
ensure that competencies are continually strengthened
manage competencies so that competitive advantage is preserved
whilst following the respective business units (and corporate) strategy


how to achieve corporate and business unit objectives?
124
Anna Rosinus
The Resource-Based Approach to Strategy (1)
resources: an organisations assets what we have
tangible
intangible
capabilities: a corporations ability to exploit its resources
core and distinctive competencies what we do well
competency: a cross-functional integration and
coordination of capabilities
core competency: a collection of competencies
that is wide-spread throughout the corporation
across divisional boundaries;
something the corporation does exceedingly well
distinctive competency: core competencies
that are superior to those of the competition
link to outsourcing

what makes the difference?
CAPABILITIES
RESOURCES
COMPETENCIES
125
Anna Rosinus
Marketing
pricing, selling and distributing a product meeting needs profitably
1

essentially McCarthys 4P
place policies
product policies
pricing policies
promotion policies
link to growth strategies
how can Marketing support corporate and business strategies?
1: Kotler, Keller (20xx)
Anna Rosinus
Growth Strategies Ansoff Matrix

adapted from Ansoff (1988)
Market
Penetration
Product
Development
Market
Development
Diversification
new existing
n
e
w
e
x
i
s
t
i
n
g
products
m
a
r
k
e
t
s
126
Anna Rosinus
Marketing Market Oriented Decisions
market penetration
increase market share by fighting competition (price, promotion etc.)
develop new uses for current products
market development
develop new markets for existing products
circumvent market saturation
make use of synergies
develop new markets for new products*
product development
develop new products for existing markets
develop new products for new markets*
line extension- using a successful brand name to market other products
how can Marketing support corporate and business strategies?
127
Anna Rosinus
Marketing Pricing
pricing approaches:
cost-based,
value-based, and more
static pricing policies
price discrimination,
high/low, premium/discount pricing, and more
dynamic pricing policies
skimming: skim the cream from the top of the demand
curve with a high price while the product is new and there
are not many competitors yet
penetration pricing: enter the market with low prices in
order to achieve a high market share fast, thereby making
use of scale economies (experience/learning curve), or
setting an industry standard (customer lock-in)


how can Marketing support corporate and business strategies?
t
p
t
p
128
Anna Rosinus
Marketing Promotion
how can Marketing support ?
satisfying needs
1:1
communication
interaction, e.g.
Social Media
content marketing
proving
knowledge &
experience
customisation
etc.
creating demand
1:many communication
advertisements,
commercial, displays
mass production
securing shelf-space
etc.
Anna Rosinus
Finance
examination of the financial
implications of corporate
and business-level strategic
options
identifies the best financial
course of action
aims at maximising financial
value of the company
how can Finance support corporate and business strategies?
Anna Rosinus
Finance
examination of the financial
implications of corporate
and business-level strategic
options
identifies the best financial
course of action
aims at maximising financial
value of the company
how can Finance support corporate and business strategies?
MICHAEL KRAMER, CFO, Apple Retail
When Ron [Ron Johnson - team leader for the
design/ development retail stores] told me
about the Genius Bar, I asked, So how big
is it?
he said, Five people in every store.
So you're going to take away 20% of the
sales floor?
Yeah.
What are we going to charge?
Nothing.
Most CFOs would say, Are you fucking
crazy? but even as a financial guy at
Apple, you have to have a reverence for
the creative side of the business. You have
to figure out ways to say yes.
Anna Rosinus
Finance
financial strategy includes the management of:
dividends (growth vs. dividends, stock buybacks)
stock price (e.g. reverse stock splits)
financial strategy and growth (e.g. diversification)
debt vs. equity financing (unrelated vs. related diversification)
leveraged buyout- company is acquired in a transaction financed largely
by debt usually obtained from a third party
current trends:
private equity, venture capital
crowdfunding
how can Finance support corporate and business strategies?
131
Anna Rosinus

crowdfunding: some examples
Anna Rosinus
Anna Rosinus
R&D
product and process innovation and improvement
technological leader- pioneers innovation
technological follower- imitates the products of competitors
current trends:
use of strategic alliances, partnerships and/or networks with other
corporations, governmental or academic institutions to develop new
products and processes
open innovation

how can R&D support corporate and business strategies?
Anna Rosinus

successful open
innovation
With the introduction of LEGO Mindstorms,
advanced users began to hack the system
to customize and use it in a way that the
Danish company had not foreseen . After
trying to fight these hackers, LEGO finally
became aware of the potential that laid
behind them.
Anna Rosinus
Operations
how & where a product/service is manufactured ( manufacturing type)

examples of manufacturing types:
mass production systems
(dis-)connected line flow (assembly line/batch)
job shops
flexible manufacturing systems
continuous improvement
modular manufacturing
mass customisation

how can Operations support corporate and business strategies?
135
Anna Rosinus

trend mass customisation
Anna Rosinus

Anna Rosinus
Mass Customisation
Dell, begun in Michael Dells Texas dorm room in 1984, revolutionised the PC industry. It
allowed customers to easily customise their computers and crucially, because Dell sold
direct and pioneered use of Chinese component suppliers and assembly plants, it was
cheap.
The internet has greatly increased the possibilities for mass customisation. For example,
Dell, a computer company, established its leadership of the PC market by allowing
customers more or less to assemble their own PCs online. The company put together the
components as requested at the last minute before delivery.
By the late 2000s, Dell's "configure to order" approach of manufacturingdelivering
individual PCs configured to customer specifications from its US facilities was no longer as
efficient or competitive with high-volume Asian contract manufacturers as PCs became
powerful low-cost commodities
2013: posted by a DELL-employee: Thanks for posting your comments and bringing this
to our attention. I agree with you. Few years back we did have more options to customize
and build your own system. But right now you do have an option to upgrade the
processor, memory, video card, display and hard drive on most of the systems
how did mass customisation change over time?
Anna Rosinus
Operations
level of vertical integration in the production process ( outsourcing)





deployment of physical resources
relationships with suppliers
how can Operations support corporate and business strategies?
136
Anna Rosinus
Outsourcing
= opposite of vertical Integration (insourcing)
activities previously carried out internally are subcontracted to
external suppliers
examples:
subcontracting the production of components to a specialist supplier
Outsourcing of after-sales services to a cheaper location (e.g. call centres)
drivers/motivation:
cost reduction
quality improvements
focus on core competencies/ distinctive capabilities, externalising non-
core activities, e.g. (professor = world-champion in typewriting,
nonetheless most writing is done by its secretary; having a housekeeper)
insourcing or outsourcing what should a company do?
137
Anna Rosinus
Outsourcing Matrix
how to decide which activities shall be outsourced and how?
MAKE/BUY
taper vertical
integration
(produce some
internally)
BUY
outsource
completely
(purchase via
open
market)
BUY
outsource
completely
(purchase with
long-term
contracts)
MAKE
full vertical
integration
(produce all
internally)
low high
h
i
g
h

l
o
w

activitys total value-added
to firms products and
services
a
c
t
i
v
i
t
y

s

p
o
t
e
n
t
i
a
l

f
o
r


c
o
m
p
e
t
i
t
i
v
e

a
d
v
a
n
t
a
g
e

Anna Rosinus
outsourcing, offshoring, reshoring
via the economist
Anna Rosinus
outsourcing, offshoring, reshoring
Anna Rosinus
Purchasing
obtaining raw materials, parts and supplies needed to perform the
operations function
options include:
multiple sourcing
sole suppliers/sole sourcing (Deming)
just-in-time/ just-in-sequence
parallel sourcing
web-based procurement

how can Purchasing support corporate and business strategies?
139
Anna Rosinus
Logistics
flow of products into and out of the manufacturing process
trends include:
centralisation
outsourcing
internet

how can Purchasing support corporate and business strategies?
140
Anna Rosinus
HR
low-skilled employees
low pay
repetitive tasks
high turnover
skilled employees
high pay
cross-trained
self-managing teams
trends include:
self-managed teams
360-degree appraisal
diversity

how can HR support corporate and business strategies?
141
Anna Rosinus
Information Systems (IT)
providing the technological basis to
build/enhance competitive advantage,
facilitate communication, and
strengthen knowledge
trends include:
follow the sun management
internet/extranet
intranet
social media
cloud computing
EDI
bring-your-own-device
how can IT support corporate and business strategies?
142
Anna Rosinus

entreprise 2.0
Anna Rosinus
Functional Strategy Red Bull Bio
background: Red Bull aims at enlarging the customer base by
introducing a new product line of organic and healthy energy lifestyle
drinks
the main target group shall be young professionals (20-30), but in
general the high price, branded product shall be attractive for all
adults

Please form groups of 2-5 and develop the appropriate
functional strategies:
1/3 of the class: Marketing
1/3 of the class: Operations and Purchasing
1/3 of the class: R&D and IT
practical application: group work
143
Anna Rosinus
Strategies to Avoid
follow the leader
hit another home run
arms race
do everything
losing hand
what should be avoided as well as on corporate, business and functional level?
144
Anna Rosinus
Strategic Choice: Selecting the Best Strategy
corporate scenarios
risk management
process of strategic choice
how to decide on strategic topics?
145
Anna Rosinus

example corporate scenario
Anna Rosinus
Strategic Choice and Risk
composition of risk
likelihood of entry of events
impact of these events
amount of assets committed
length of time of asset commitment

risk management depends on
pressures from stakeholders
influence of corporate culture
management personalities and ambitions
how to deal with uncertainties and risks?
Issues-Priority-Matrix
probable impact on company
p
r
o
b
a
b
i
l
i
t
y

o
f

o
c
c
u
r
e
n
c
e
low high
l
o
w
low priority
medium
priority
h
i
g
h
high
priority
146
Anna Rosinus
Corporate Scenarios
(1) drawing alternative scenarios
(2) estimating effects of alternatives on cost, income etc.
(3) developing pro forma balance sheets and income statements that
forecast return on investment in the different scenarios
commonly used:
best case
base case
worst case
how deal with uncertainties and future situations?
147
Anna Rosinus
Strategic Choice - The Process
evaluation of
alternative
strategies
selection of the
best alternative
potential pitfalls
how are strategic decisions made?
149
Anna Rosinus
Strategic Choice - Evaluation of Alternative Strategies
criteria, which alternatives to evaluate should meet:
mutual exclusivity
internal consistency
feasibility and good probability of success
completeness
how are strategic decisions made?
150
Anna Rosinus
Strategic Choice - Selection of the Best Alternative
often/better not consensus-based
entails (or better should involve) discussions, disagreement
programmed conflict
devils advocate
dialectical inquiry
how are strategic decisions made?
151
Anna Rosinus
Strategic Choice - Potential Pitfalls
rush to judgment
failure-prone decision-making practices such as following influential
stakeholders
investigation of too few options
how are strategic decisions made?
152
Anna Rosinus
Strategic Choice Devils Advocate
(1) form groups of 4
(2) two group members present and defend one of the following ideas
(3) the other 2 play devils advocate
idea (A) Starbucks:
background: Starbucks success in Europe (non UK) has been rather limited
introduction of a University line in Europe, i.e. coffee houses at selected
universities in Germany, France and Spain
giving students the opportunity to do group work there whilst having a
coffee/snack as well as the traditional take away offerings are planned
a bonus card system shall strengthen customer loyalty and retention, in addition
coffees for free can be earned by (successfully) participating in an open
innovation project
idea (B) Audi:
background: so far (new) cars are sold only offline, i.e. through independent
dealerships
launch of an online shop for new cars
first models to be sold are the A1, the A3 as well as the Q3
special packages shall prevent dealership cannibalisation and price wars

practical application: group work
Anna Rosinus
Strategic management Process (3)
source: Wheelen, Hunger (2012)
Programs
Act i vi t i es needed
t o accompl i sh a
pl an
Budgets
Costs of the
programs
Procedures
Sequence of steps
needed to do a job



Environmental
Scanning
Strategy Formulation Strategy
Implementation
Evaluation
and Control
154 - 1
Anna Rosinus
Strategy Implementation
what are the different steps in strategic management?
strategy
formulation
strategy
implementation
evaluation and
control
environmental
scanning
1 2
3 4
development of programs,
budgets,
and procedures
155
Anna Rosinus
Strategy Implementation: Organising for Action
strategy implementation
deals with all activities and decisions required for the execution of a
strategic plan
is the process by which strategies and policies are put into action
who implements strategy?
responsibilities,
staffing
what must be done?
developing programs, budgets and procedures,
achieving synergy, align company operations in the intended direction
how is strategy to be implemented how to structure the activities?
structure follows strategy,
stages of corporate development, organisational life cycle, advanced types
of organisational structures
what to expect?
156
Anna Rosinus
A new Strategy for Siemens
practical application
Joe Kaeser, a 34-year Siemens veteran, became CEO
in August 2013 & announced a review of the
individual businesses in November.
Siemens Vision 2020 as announced on 7
th
May 2014:
focus on growth fields along the electrification,
automation and digitalization
acquisition of Rolls-Royce gas turbine and compressor
business
joint venture with Mitsubishi Heavy Industries for Metals
Technologies
public listing of audiology
new organization with flatter structures (9 instead of 16
division, elimination of sector level)
As of 2015, the Divisions will be
assigned target profit margin ranges
(oriented on the profit margins of
each Divisions main competitors).
Aside from deals
with MNCs such as
Rolls Royce or
Alstom, Mr. Kaeser
was expected to
alter Siemens'
structure.
1
2
3 4
Anna Rosinus
Strategy Process: Responsibilities
step 1a: initiation either regular process or special
order
step 1b: preparation nomination of ambassadors,
collection of information
step 2: evaluation of internal and external
information, strategy formulation
step 3: implementation communication, roll-out
and action
step 4: evaluation & control monitoring, feedback,
corrective measures
who is involved in strategy formulation and implementation?
it is time to
rethink our
strategy!
157
Anna Rosinus
step 1a: initiation either regular process or special order
it is time to
rethink our
strategy!
m
a
n
a
g
e
m
e
n
t

d
i
v
i
s
i
o
n
s
/
b
u
s
i
n
e
s
s

u
n
i
t
s

f
u
n
c
t
i
o
n
a
l

u
n
i
t
s

s
t
r
a
t
e
g
i
s
t
s

158
Anna Rosinus
step 1b: preparation nomination of ambassadors, collection of information
m
a
n
a
g
e
m
e
n
t

d
i
v
i
s
i
o
n
s
/
b
u
s
i
n
e
s
s

u
n
i
t
s

f
u
n
c
t
i
o
n
a
l

u
n
i
t
s

s
t
r
a
t
e
g
i
s
t
s

a
m
b
a
s
s
a
d
o
r
s

159
Anna Rosinus
Phases of Strategic Management
how did strategic management change over time?
basic financial
planning
forecast-based
planning
externally
oriented
strategic
planning
strategic
management
160
Anna Rosinus
step 2: evaluation of internal and external information, strategy formulation
+ board approval
m
a
n
a
g
e
m
e
n
t

d
i
v
i
s
i
o
n
s
/
b
u
s
i
n
e
s
s

u
n
i
t
s

f
u
n
c
t
i
o
n
a
l

u
n
i
t
s

s
t
r
a
t
e
g
i
s
t
s

a
m
b
a
s
s
a
d
o
r
s

161
Anna Rosinus
step 3: implementation communication, roll-out and action
EVERYBODY IS INVOLVED IN STRATEGY!!!
m
a
n
a
g
e
m
e
n
t

d
i
v
i
s
i
o
n
s
/
b
u
s
i
n
e
s
s

u
n
i
t
s

f
u
n
c
t
i
o
n
a
l

u
n
i
t
s

s
t
r
a
t
e
g
i
s
t
s

a
m
b
a
s
s
a
d
o
r
s

162
Anna Rosinus
step 4: evaluation & control monitoring, feedback, corrective measures
m
a
n
a
g
e
m
e
n
t

d
i
v
i
s
i
o
n
s
/
b
u
s
i
n
e
s
s

u
n
i
t
s

f
u
n
c
t
i
o
n
a
l

u
n
i
t
s

s
t
r
a
t
e
g
i
s
t
s

a
m
b
a
s
s
a
d
o
r
s

Anna Rosinus
Strategy Communication
every single employee is somehow involved in strategy
implementation
the success of a new strategy depends on the contribution of many
different people in the organisation
communicating strategy and strategic change is a crucial part of the
strategic management process!
group work:
imagine you were the leader of Siemens strategy team how would you try to communicate
the new strategy to the 360k employees worldwide?
use a role play: each group member may choose one of the following positions:
leader of Siemens strategy team
CEO
director internal communications
CMO (chief marketing officer)
director HR
group work
Anna Rosinus
example strategy communication Facebook (compare chapter 3)
2010 was a big year for Facebook
and the revelation of the 2010
strategy infographic was no
exception.
Mark Zuckerberg unintentionally
revealed the infographic that was
printed on the inside of his hoodie
at the D8 conference.
The hoodie with the famous
infographic was reportedly given to
all Facebook employees in 2010.
Anna Rosinus
example strategy formulation & communication with a strategy map:
Volkswagen do Brazil ao para vencer
source: Kaplan, R. (2012)
Anna Rosinus
vw do brasil
source: Kaplan, R. (2012)

example strategy formulation & communication with a strategy map:
Volkswagen do Brazil ao para vencer
Anna Rosinus
vw do brasil
example strategy formulation & communication with a strategy map:
Volkswagen do Brazil ao para vencer
source: Kaplan, R. (2012)

Anna Rosinus
Programs
make the strategy action oriented
what to determine?
interdependencies between different programs
feasibility
sequence of execution, milestones
change management: location, pace and nature of change
stakeholder involvement, interactions, objections,
gap analysis: compare proposed programs and activities with
current programs and activities

how to turn strategy into action?
166
Anna Rosinus
t
h
e

a
c
t
i
o
n

p
l
a
n

t
h
e

p
r
o
g
r
a
m

s
o
u
r
c
e
:

s
l
i
g
h
t
l
y

a
d
a
p
t
e
d

f
r
o
m

W
h
e
e
l
e
n
,

H
u
n
g
e
r

PROGRAM OBJECTIVES: to run a new advertising and promotion campaign for
the Christmas season
EMPLOYEES ADDRESSED: Jan Lewis, Marketing Manager & Rick Carter Marketing
Assistant
Anna Rosinus
Budgets
assigning costs (and returns) to the programs
financial dimension of strategic planning (budgetary process)
the last real check on the feasibility of the selected strategy (and the
programs necessary to implement it)

do we have the necessary financial resources to realise the strategy?
167
Anna Rosinus
Procedures
often: Standard Operating Procedures (SOPs),
also: organisational routines
procedures detail the various activities that must be carried out to
complete a corporations programs
SOPs shall serve to ensure consistency over time and among stores
(compare McDonalds, Vapiano, Starbucks or Apple Stores)
procedures depend on strategy:
e.g. differentiation vs. cost leadership

what activities are needed to realise the programs?
168
Anna Rosinus
Strategy Implementation Example: SOPs
what should be done?
source: 2.bp.blogspot.com; mcdonalds.com.hk
Anna Rosinus

how to be a genius: apple's employee training manual
Anna Rosinus

how to be a genius: apple's employee training manual
Anna Rosinus
Achieving Synergy
2+2=5
if the return on investment (ROI) of the combined businesses is
greater than the combined returns of the independent businesses
AND/OR if the return on investment (ROI) of a multidivisional
companys business unit is greater than if it were a
separate/standalone businesses
different forms of synergy
shared know-how
shared tangible resources
pooled negotiating power
economies of scale, scope and skill
coordinated strategies (horizontal competition)

how can strategy implementation achieve superior results?
169
Anna Rosinus
Horizontal Competition: World Coffee Market
how to improve ones competitive position?
sources: telegraph.co.uk; welt.de;
foxbusiness.com
1
2
3
Jacobs
Douwe
Egberts
DE Master Blenders agreed to hand US-based Mondelez $5bn (2.9bn) in cash and a 49pc
stake in the combined company
The global leader Nestle (22%), Mondelez (13%), and D.E. Master Blenders (6%) together
account for about 40% of the $81 billion global coffee market.
Anna Rosinus
Challenges to Strategy Implementation
more time needed than originally planned
unanticipated major problems
ineffective coordination
distraction by other activities, unexpected events
insufficient capabilities and/or inadequate training
uncontrollable external environmental factors
inadequate leadership and direction
poor definition of implementation tasks and activities
ineffective monitoring (& information) systems
what can go wrong?
according to a 1991 survey of 93 Fortune500 companies via Wheelen, Hunger
170
Anna Rosinus
Change Management
need for change
direction of change
strategy matters
the right approach depends on the circumstances
there is no one right way
context matters
getting people to change from existing ways of
doing things is challenging
inertia and resistance
how to succeed in changing?
Anna Rosinus
Blocks to Change
INTERNAL
lack of resources
lack of ability
refusal of top management to
delegate
loyalty
task orientation
single-mindedness
(working in isolation)

EXTERNAL
economy
labor shortages
lack of market growth
what might hamper changes in strategy?
171
Anna Rosinus
Strategy Implementation and Structure
A. Chandler (1960s):
Structure follows Strategy
= changes in corporate strategy need to be accompanied by changes
in organisational structure
later on much criticism
today, e.g. G. Hamel:
Those who dispute Chandlers thesis that structure follows strategy
miss the point, [] of course, strategy and structure are inextricably
intertwined.
=> different types of organisations (sizes, ages, but also
environments etc.) call for different organisational structures
how are strategy and structure linked?
172
Anna Rosinus
Structure in Different Stages of Corporate Development
how does structure develop over a companys lifetime?
simple structure
entrepreneur
functional
structure
divisional
structure
beyond SBUs
matrix & network
Anna Rosinus
Structure in Different Stages of Corporate Development
how does structure develop over a companys lifetime?
simple structure
entrepreneur
functional
structure
divisional
structure
beyond SBUs
matrix & network

Anna Rosinus
Structure in Different Stages of Corporate Development
how does structure develop over a companys lifetime?
simple structure
entrepreneur
functional
structure
divisional
structure
beyond SBUs
matrix & network

Anna Rosinus
Structure in Different Stages of Corporate Development
how does structure develop over a companys lifetime?
simple structure
entrepreneur
functional
structure
divisional
structure
beyond SBUs
matrix & network

Anna Rosinus
Structure in Different Stages of Corporate Development
how does structure develop over a companys lifetime?
simple structure
entrepreneur
functional
structure
divisional
structure
beyond SBUs
matrix & network
decision making
tightly controlled
little formal
structure
planning: short
range/reactive
flexible and
dynamic
management team
functional
specialization
delegation of
decision making
concentration/
specialisation in
industry
diverse product
lines
decentralized
decision making
SBUs
almost unlimited
resources
increasing
environmental
uncertainty
technological
advances
size and scope of
worldwide
businesses
multi-industry
competitive strategy
better educated
personnel
173
Anna Rosinus
Matrix Structure
functional and product forms divisional structure are combined
simultaneously at the same level of the organisation
=> each unit is controlled by two different managers, e.g. the
regional manager North America and the operations manager control
the manufacturing unit North America
conditions for Matrix structures include:
ideas need to be supportive for and mutually beneficial across different
projects or products
scarcity of resources
superior ability to process information
improved decision making
risks/problems?
what are the particularities of a matrix organisation?
174
Anna Rosinus
BOEINGs Matrix Structure
practical application
Anna Rosinus
Network Structure & Cellular/Modular Structure
network structure
non structure
elimination of in-house business functions
cellular/modular structure
a series of project groups or collaborations
in particular the division of a network into groups or communities
linked by non-hierarchical electronic networks
useful in unstable environments that require innovation and quick
response
virtual organisation
useful in unstable environments
useful when innovation and quick response
are needed


what are the particularities of a network structure?
175 - 2
Anna Rosinus
BOEINGs Partner Network
practical application
Anna Rosinus
NETWORK STRUCTURE in total up to 7
different parties
involved
Anna Rosinus
MODULAR STRUCTURE
in total only 3 different
(and more or less
stand alone) parties
involved
Anna Rosinus
Siemens Organisational Structure 2007-2014
practical application
D
i
v
i
s
i
o
n
s

S
e
c
t
o
r
s


M
a
n
a
g
i
n
g

B
o
a
r
d

Managing
Board
Energy
E
n
e
r
g
y

S
e
r
v
i
c
e

P
o
w
e
r

G
e
n
e
-
r
a
t
i
o
n

P
o
w
e
r

T
r
a
n
s
-
m
i
s
s
i
o
n

W
i
n
d

P
o
w
e
r

Health-care
A
u
d
i
o
l
o
g
y

S
o
l
u
t
i
o
n
s

C
l
i
n
i
c
a
l

P
r
o
d
u
c
t
s

C
u
s
t
o
m
e
r

S
o
l
u
t
i
o
n
s

D
i
a
g
n
o
s
-
t
i
c
s

I
m
a
g
i
n
g

&

T
h
e
r
a
p
y

S
y
s
t
e
m
s

Industry
C
u
s
t
o
m
e
r

S
e
r
v
i
c
e
s

D
r
i
v
e

T
e
c
h
n
o
-
l
o
g
i
e
s

I
n
d
u
s
t
r
y

A
u
t
o
-
m
a
t
i
o
n

M
e
t
a
l
s

T
e
c
h
n
o
-
l
o
g
i
e
s

Infra-
structure &
Cities
B
u
i
l
d
i
n
g

T
e
c
h
n
o
-
l
o
g
i
e
s

L
o
w

a
n
d

M
e
d
i
u
m

V
o
l
t
a
g
e

M
o
b
i
l
i
t
y

a
n
d

L
o
g
i
s
t
i
c
s

R
a
i
l

S
y
s
t
e
m
s

S
m
a
r
t

G
r
i
d

Anna Rosinus
s
e
p
a
r
a
t
e
l
y

m
a
n
a
g
e
d

Siemens Organisational Structure from 2014
practical application
D
i
v
i
s
i
o
n
s


M
a
n
a
g
i
n
g

B
o
a
r
d

Managing
Board
Power and
Gas
Wind Power
& Re-
newables
Process
Industries
and Drives
Financial
Services
Healthcare
Energy
Manage-
ment
Building
Techno-
logies
Mobility
Digital
Factory
Audiology