Question: For this question, well combine a topic from Chapter 8 (diversification strategy) with a topic from Chapter 9 (organization structure). The idea that structure follows
For this question, well combine a topic from Chapter 8 (diversification strategy) with a topic from Chapter 9 (organization structure). The idea that structure follows strategy indicates that some structures are better suited for some strategies. First, describe the high-diversification strategy that is often referred to as conglomerate. (You reviewed some conglomerates in Discussion 4.) Second, explain the multidivisional structure that keeps most of the functions (e.g., marketing, research & development, human resources) under the control of the specific business units rather sharing them across the entire corporation. Third, explain why this structure matches well with this strategy. Why does it make sense to manage a conglomerate strategy with a multidivisional structure with many of the administrative functions held at the business-unit level rather than combined at the corporate level (i.e., little control by corporate management)? Why are the business units managed so separately?
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