matching structure with strategy

Project Description:

learning activity 1
a. changes in strategy often require changes in structure

1. changes in strategy often require changes in the way an organization is structured for two major reasons.

a. first, structure largely dictates how objectives and policies will be established. for example, objectives and policies established under a geographic organizational structure are couched in geographic terms. objectives and policies are stated largely in terms of products in an organization whose structure is based on product groups. the structural formula for developing objectives and policies can significantly impact all other strategy-implementation issues.

b. the second major reason why changes in strategy often require changes in structure is that structure dictates how resources will be allocated.

2. changes in strategy lead to changes in organizational structure. structure should be designed to facilitate the strategic pursuit of a firm and, therefore, follow strategy.

3. there is not just one optimal organizational design or structure for a given strategy or type of organization.

4. as illustrated in table 7-6, symptoms of an ineffective organizational structure include too many levels of management, too many meetings attended by too many people, too much attention being directed toward solving interdepartmental conflicts, too large a span of control, and too many unachieved objectives.

review the article in the link below. this video provides additional insight into why the alignment structure and processes are essential to the effective implementation of strategy.

http://www.youtube.com/watch?v=vgphjmc9wua

learning activity

complete assurance of learning exercise 7c – revise walt disney's organizational chart

with the information you received from the video and the information in chapter 7 complete step 1.

learning activity 2

projected financial statements

1. projected financial statement analysis is a central strategy-implementation technique because it allows an organization to examine the expected results of various implementation decisions.

2. a 2013 projected income statement and balance sheet for the litten company are provided in table 8-7.

3. the six steps required to perform a projected financial analysis:

a. prepare the projected income statement before the balance sheet. start by forecasting sales as accurately as possible.

b. use the percentage of sales method to project the cost of goods sold (cgs) and the expense items in the income statement. for example, if cgs is 70 percent of sales in the prior year then use that same percentage to calculate cgs in the future year. items such as interest, dividends, and taxes must be treated independently and cannot be forecasted using the percentage-of-sales method.

c. calculate the projected net income.

d. subtract from the net income any dividends to be paid for that year. this remaining net income is retained earnings. reflect the retained earnings total on both the income statement and balance sheet because this item is the key link between the two projected statements. bring this retained earnings amount for that year (ni-div = re) over to the balance sheet by adding it to the prior year's re shown on the balance sheet. the re on the balance sheet is a cumulative number rather than money available for strategy implementation.

e. project the balance sheet items, beginning with retained earnings and then forecasting stockholder's equity, long-term liabilities, current liabilities, total liabilities, total assets, fixed assets, and current assets (in that order). use the cash account as the plug figure; that is use the cash account to make the assets total the liabilities and net worth. then, make appropriate adjustments.

f. list comments on the projected statements. any time a significant change is made in an item from a prior year to the projected year, a remark should be provided.

learning activity

it has been argued by many strategist that projected financial statement analysis is considered both a strategy-formulation and a strategy-implementation tool.

please provide your rational/opinion for or against this argument. as a ceo of an organization would you rely more heavily on financial statement analysis in any of the three phases? explain why.
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