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Understanding Multidivisional Structures and Their Impact on Corporate Strategy

This resource examines the multidivisional structure in managing corporate strategies. It details the advantages such as improved financial and strategic control, as well as growth potential. It also addresses challenges like establishing authority relationships, dealing with restrictive financial controls, competition for resources, transfer pricing, and resource duplication. Furthermore, the importance of implementing strategies across countries—localization, international, global, and transnational—will be explored to enhance understanding of global corporate management.

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Understanding Multidivisional Structures and Their Impact on Corporate Strategy

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  1. Learning Objectives • To know the advantages and disadvantages of multidivisional structures. • To know the issues involved in managing organization structure across countries.

  2. Managing Corporate Strategy Through the Multidivisional Structure • Self-contained divisions. • Corporate headquarters staff. • Advantages: - Improved corporate financial control. - Improved strategic control. - Growth.

  3. Managing Corporate Strategy Through the Multidivisional Structure (cont) • Problems: • Establishing the divisional-corporate authority relationship. • Restrictive financial controls leading to a short-run focus. • Competition for resources. • Transfer pricing. • Duplication of functional resources.

  4. Implementing Strategy Across Countries • Implementing a localizationstrategy. • Implementing international strategy. • Implementing global strategy. • Implementing transnational strategy.

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