Corporate Level Strategy And Structure Combinations - Strategic Business Unit and Functional Level Strategies

The need for having the right structure for implementation of strategy need not be over emphasized. Cost. The structural character-istics of specialization, centralization, and formalization play important roles in the successful implementation of the cost leadership strategy.

Corporate Level Strategy And Structure Combinations
 
The need for having the right structure for implementation of strategy need not be over emphasized. Cost. The structural character-istics of specialization, centralization, and formalization play important roles in the successful implementation of the cost leadership strategy. Specialization refers to the type and number of job specialties that are re-quired to perform the firm’s work. For the cost leadership strategy, man-gers divide the firm’s work into homogeneous subgroups. The basis for these subgroups is usually functional areas, products being produced, or clients served. By dividing and grouping work tasks into specialties, firms reduce their costs through the efficiencies achieved by employees specializing in a particular and often narrow set of activities. Additional characteristics of the form of the functional structure used to implement the differentiation strategy are shown in Figure 4-4

Notes:

1. Marketing is the main function for keeping track of new product ideas

2. New product R & D is emphasized

3. Most functions are decentralized, but R & D and marketing may have centralized staffs that work closely with each other.

4. Formalisation is limited so that new product ideas can emerge eas-ily and change is more readily accomplished.

Overall structure is organic. Job roles are less structured.