Fast Food Organizational Structure

Chapter 11

Organizational Structure and Controls

Competitiveness

Chapter 3Internal

Environment

Chapter 2External

EnvironmentThe StrategicThe StrategicManagementManagement

ProcessProcessStrategic IntentStrategic Mission

StrategicCompetitivenessAbove Average

ReturnsFeedback

Strategy Formulation

Chapter 4Business-Level

Strategy

Chapter 5CompetitiveDynamics

Chapter 6Corporate-Level

Strategy

Chapter 8International

Strategy

Chapter 9Cooperative

Strategies

Chapter 7Acquisitions &Restructuring

Strategy Implementation

Chapter 10Corporate

Governance

Chapter 11Structure& Control

Chapter 12Strategic

Leadership

Chapter 13Entrepreneurship & Innovation

Stra

tegi

cIn

puts

Stra

tegi

cA

ctio

nsSt

rate

gic

Out

com

es

•Effective OS’sEffective OS’s•Evolution of OS’s (Chandler’s Thesis)Evolution of OS’s (Chandler’s Thesis)•OS’s for Single/Dominant BusinessesOS’s for Single/Dominant Businesses•OS’s for Related-Constrained DiversifiersOS’s for Related-Constrained Diversifiers•OS’s for Related-Linked DiversifiersOS’s for Related-Linked Diversifiers•OS’s for Unrelated DiversifiersOS’s for Unrelated Diversifiers•OS’s for Global StrategiesOS’s for Global Strategies•OS’s for Multidivisional StrategiesOS’s for Multidivisional Strategies•OS’s for Cooperative StrategiesOS’s for Cooperative Strategies

Organization Structure (OS): OverviewOrganization Structure (OS): Overview

Effective OS’s:Effective OS’s:•Organizing Divisions:

•Discrete Units•Interdependent Activities

•Unit Managers•Authority•Rewards

Organization Structures (OS)Organization Structures (OS)

Used to Implement strategiesUsed to Implement strategies•Allocate/Leverage R&C’s•Define Reporting Relationships•Create Accountability

Chandler’s Thesis: OS EvolutionChandler’s Thesis: OS Evolution

Functional StructureFunctional Structure

Simple StructureSimple Structure

Multidivisional StructureMultidivisional Structure

Stage IStage I

Stage IIStage II

Stage IIIStage III


Owner / Manager (OM)Owner / Manager (OM)

•OM makes all major decisionsOM makes all major decisions•Little SpecializationLittle Specialization•Little FormalizationLittle Formalization•Single products/single marketsSingle products/single markets•Focus StrategiesFocus Strategies

EmployeeEmployeeEmployeeEmployee EmployeeEmployee EmployeeEmployee EmployeeEmployee EmployeeEmployee

Owner/ManagerOwner/Manager


•First stage after Simple StructureFirst stage after Simple Structure

•Specialization / Learning CurveSpecialization / Learning Curve

•Overcomes limits of owner/managerOvercomes limits of owner/manager

•Functional mgrs report to CEO who makes Functional mgrs report to CEO who makes company-wide decisions.company-wide decisions.

•Risk: Myopic function managersRisk: Myopic function managers

•Single or dominant-business firmsSingle or dominant-business firms


ProductionProductionFinanceFinance R&DR&D AccountingAccounting Sales & Sales & MarketingMarketing

Human Human ResourcesResources

Chief Executive OfficerChief Executive Officer


ProductionProductionFinanceFinance R&DR&D AccountingAccounting Sales & Sales & MarketingMarketing




Differentiation Business-Differentiation Business-level strategy usually level strategy usually employs a decentralized employs a decentralized structure and emphasizes structure and emphasizes Product R&D and Sales Product R&D and Sales & Marketing& Marketing

Low Cost Business-level Low Cost Business-level strategy usually employs strategy usually employs a centralized structure a centralized structure and emphasizes Process and emphasizes Process R&D and OperationsR&D and Operations

Transparency 11-11

A Process-Oriented Functional Structure

General Manager

Foundry &Castings

ScrewMachining Inspection Customer

Service

Milling &Grinding

Finishing &Heat Treating

Loading &Shipping

Billing &Accounting

Transparency 11-12

Evolution of Multi-Divisional StructureEvolution of Multi-Divisional Structure

Corporate Office (Staff)Corporate Office (Staff)


Product AProduct A Product BProduct B

Transparency 11-13





ProductionProductionFinanceFinance EngineeringEngineering AccountingAccounting Sales & Sales & MarketingMarketing


Transparency 11-14

FinanceFinance



ProductionProduction EngineeringEngineering AccountingAccounting Sales & Sales & MarketingMarketing






Transparency 11-15

Product AProduct A

North North AmericaAmerica EuropeEurope AsiaAsia


Product BProduct B Product CProduct C Product DProduct D





Cooperative FormCooperative Form Related-ConstrainedRelated-Constrained

MDSMDS Corp. StrategyCorp. Strategy

Strategic Business Strategic Business Unit (SBU) StructureUnit (SBU) Structure Related-LinkedRelated-Linked

Competitive FormCompetitive Form Unrelated /Holding Unrelated /Holding CompanyCompany

Multi-Divisional Corporate Structures (MDS)Multi-Divisional Corporate Structures (MDS)

President

Legal AffairsGov’t Affairs

StrategicPlanning

Corp.R&D

Corp.HRM

Corp.Mktg

Corp.Finance

Headquarters

ProductDivision

ProductDivision

ProductDivision

ProductDivision

ProductDivision

Cooperative Form MDS (Related-Constrained Strategy)

Options for Supplementing the Basic Organization Structure

• Cross-functional task forces

• Self-contained work teams

• Special project teams

• Venture team approach

• Process teams

• Contact managers

• Relationship managers

Transparency 11-19

A Matrix Organization Structure

HeadManufacture

HeadR&D

VentureManager 1

HeadMarketing

HeadFinance

VentureManager 2

VentureManager 3

VentureManager 4

R&DSpecialists

ProductionSpecialists

MarketingSpecialists

FinanceSpecialists

R&DSpecialists



FinanceSpecialists

R&DSpecialists



FinanceSpecialists

R&DSpecialists



FinanceSpecialists

President

Strategic Strategic Business Business Unit AUnit A

DivisionDivision


SBU’s Help to Solve Complexity IssuesSBU’s Help to Solve Complexity Issues


Strategic Strategic Business Business Unit BUnit B

Strategic Strategic Business Business Unit CUnit C

Strategic Strategic Business Business Unit DUnit D

DivisionDivision DivisionDivision

Strategic Business Units (SBUs) are used to organize Strategic Business Units (SBUs) are used to organize related businesses into groups for strategy developmentrelated businesses into groups for strategy development

Transparency 11-21

President

LegalAffairs

Corp.Auditing

Corp.Finance

Headquarters

Division Division Division Division Division

Competitive Form MDS (Unrelated Strategy)

Cooperative Cooperative M-FormM-Form

SBUSBU M-FormM-Form

Competitive Competitive M-FormM-Form

Structural Structural CharacteristicsCharacteristics

Degree ofDegree ofCentralizationCentralization

Use ofUse ofIntegratingIntegratingMechanismsMechanisms

DivisionalDivisionalPerformancePerformance

AppraisalAppraisal

DivisionalDivisionalIncentive Incentive

CompensationCompensation

Type of Type of StrategyStrategy

Related-Related-ConstrainedConstrained

Mixed RelatedMixed Relatedor Unrelatedor Unrelated

Centralized atCentralized atCorporate OfficeCorporate Office

CentralizedCentralizedin SBUsin SBUs

DecentralizedDecentralizedto Divisionto Division

ExtensiveExtensiveSynergiesSynergies

ModerateModerateSynergiesSynergies

FinancialFinancialCriteriaCriteria

Strategic &Strategic &FinancialFinancialCriteriaCriteria

Linked toLinked to CorporateCorporate

PerformancePerformance

Linked toLinked toCorporation,Corporation,

Division & SBUDivision & SBU

Linked toLinked toDivisionalDivisional

PerformancePerformance

NonexistentNonexistentSynergiesSynergies

Subjective/Subjective/StrategicStrategicCriteriaCriteria

Attributes of Various Structural FormsAttributes of Various Structural Forms

UnrelatedUnrelated

Product AProduct A


Product BProduct B Product CProduct C Product DProduct D


A Structure based on Product lines implies a A Structure based on Product lines implies a GlobalGlobal International Strategy International Strategy

International Multi-Divisional StructuresInternational Multi-Divisional Structures

A Structural based on Geographic lines implies aA Structural based on Geographic lines implies aMulti-DomesticMulti-Domestic International Strategy International Strategy

North North AmericaAmerica AustraliaAustraliaEuropeEurope AsiaAsia Latin Latin

AmericaAmerica AfricaAfrica



Product AProduct A Product BProduct B Product CProduct C Product DProduct D

International Multi-Divisional StructuresInternational Multi-Divisional Structures

Strategic OutsourcingStrategic Outsourcing

Capability DevelopmentCapability Development

Technology SharingTechnology Sharing

Building Linkages to Facilitate LearningBuilding Linkages to Facilitate Learning

Critical Functions of Strategic Center Firm (SCF):Critical Functions of Strategic Center Firm (SCF):

Strategic NetworksStrategic Networks

Strategic Center Firm (SFF)Strategic Center Firm (SFF)

A Strategic NetworkA Strategic Network

Network Firms (NF)Network Firms (NF)


SCF Manages SCF Manages Strategic OutsourcingStrategic Outsourcing

SCFSCF

NetworkNetworkFirmsFirms

Technology Sharing (TS)Technology Sharing (TS)

Manage development and sharing of TS among Manage development and sharing of TS among partnerspartners

Strategic Center Firm’s function:Strategic Center Firm’s function:

Strategic NetworksStrategic Networks

Capability Development & Learning (CDL)Capability Development & Learning (CDL)

Develop CDL and promote sharing among partnersDevelop CDL and promote sharing among partners

SCF PromotesSCF PromotesTS & CDLTS & CDL


A Distributed Strategic NetworkA Distributed Strategic Network

Distributed Strategic Center FirmsDistributed Strategic Center Firms

Main Strategic Main Strategic Center FirmCenter Firm


MainSCF

Fast Food Organizational Structure

Documents

Transcript of Fast Food Organizational Structure