CHAPTER 8 regarding behavioral strategies that enhance organizational

STRUCTURAL DYNAMICS AND CONTROL performance. Here are Several strategies to increase sales volume
STRATEGIES 1. Market Research
Effective strategic controls help the firm understand what it 2. Procing strategy
STRUCTURAL ALIGNMENT OF ORGANIZATION takes to be successful. 3. Sales and Marketing

Organizational structure provides the framework within Characteristics of Strategic Controls B. Geographical Distribution
which strategies are used and provide the necessary 1. It helps firm understand what it intends to do.  Geographical Distribution of products and services
mechanism for its effective implementation and control. 2. They are subjective criteria needs new breed of managers and executives who
3. It examines what fits to be done will handle the provincial and regional activities to
In the organizational set up, the top executives of the firm 4. It demands effective communication cope with the increasing demand of the market.
have the final responsibility for ensuring the matching of its 5. It verifies the sharing of appropriate strategies
strategies with the appropriate organizational structure and Vertical and Horizontal Integration
the changes that would be necessary when needed. Characteristics of Effective Financial Controls  This growth factor develops a higher caliber of
1. Financial controls are effective indicators of executives who are trusted by the management in
Structural stability is the capacity of the firm to performance their strategies for corporate growth.
consistently and predictably manage its ongoing activities 2. They are objective criterial that measure
and its daily routine without effect to its direction of performance Product Diversification
profitable operation. 3. It evaluates present performance against previous  The manufacturing of new products of the
record integration of new technology in the production of
Structural flexibility on the other hand is the capacity of 4. It is the indicators in safeguarding the corporate goods needs new structure and at the same time
the firm to explore opportunities in the future and shape assets developed new strategies to make the product
the strategy for competitive advantage that will generate 5. It ensures that transactions are properly survive in the market competitiveness.
successful operation. authorized.
6. It provides reliable information in the use of Business Diversification
Effective strategic leadership
- presupposes the ability to select the most
financial resources.  The development of a new business organization
that is consistent with the corporate expansion
appropriate strategies and match it with the appropriate The structural effectiveness is determined how strategic program to other business ventures needs a more
organizational structure that would deliver the firm to its and financial controls interplay in the achievement of the elaborate structure that will help deliver the
target objectives. desired profit objectives. desired profit and return on investments.
To align with objectives, firm should have: The Interdependence Of Structure and Strategy Based on the above growth patterns three major
• Strong relationship of strategies
organizational structures were used to implement
• Organizational Structures There exists a reciprocal relationship between strategy and strategies.
• Effective Control System structure. Strategic formulation is the plan of actions while
strategic implementation is the extent by which the firm 1. Simple Structures
What should a Firm do during their expansion? operates based on plans and goals. The owner-manager makes all major decisions and
supervises all operations from production to marketing od
• The firm must modify the structure to fit the changes with In the development of firm's structure, top executives must products or services.
new strategies. see to it that there exists a reciprocal matching of the
structure and the strategy that provides the stability to use The simple structure in the view of management
• Top management must act proactively in changing the current competetive advantage. professionals is the development of line organization with
structure and its corresponding strategies
simple direct line of supervision and control through the
PATTERNS OF RELATIONSHIP BETWEEN STRATEGY direct line relationship between the owner or manager.
• Changes in structure and strategies must be made before AND STRUCTURE
the firm experience performance decline
A. The line organizational structure
Most firms started in simple structure as operation starts
THE IMPORTANCE OF ORGANIZATIONAL CONTROL small especially when it starts sole proprietorship.
Organizational controls are important aspects of A. Increase in sales volume
structure. It guides the use of strategy and indicates
performance standards. It compares actual results from the
 as the firms increase its sales volume, they need
new people to handle marketing and distribution of
projected outcome.
its products then later on develop its own
advertising agency to handle its promotional
It is difficult to achieve competitive advantage without
activities.
effective control measures that provide clear insights
 2. Functional structure - corporate growth and  Over expansion may create vacuum in the
expansion are investable as the compny expands organizational ladder
in wider operation in market growth and product  Needs trusted and committed executives
differentiation strategy or at times expansion in  Higher caliber of top executives often is difficult to
other business operations. find
 Divisional Functional Structure

Advantages  Divisional Product or Regional Structure Strategy and structure influence each other. While strategy
 Ease of operation and control as few layers in has stronger influence in the competitive advantage of the
decision making. firm tends to change the structure when operations dictates
 Few lines in the structure that facilitate for either expansion or contraction. Increasing importance
communication. in the development of structure is the matching of strategy
 The structure contributes to low cost operational with the operational needs of the organization.
dynamics

Disadvantages
 Lacks system of specialization
 Limited opportunities for learning and growth.
Advantages
B. The line and staff organizational structure  Effective communication and coordination
 Effective sharing of knowledge and information
 Allows functional specialization that allows
innovation

Disadvantages
 May have negative effect on communication
 Needs close coordination among units
 Few formal rules and regulations
3. The Growth of Multi-Divisional Structure
Most diversified corporations continue to grow and succeed
not only in the local operations but also internationally

Advantage
 Services of staff assistant that develop better
research and development strategies.
 Greater horizontal and vertical communication.
Disadvantages
 More executives to pay
 Jealousy among executive may exist.
 Over confidence creates lesser control of
operation.
Advantages
 Accurate monitoring of business performance
 Simplified operational and problem control
 Each unit operates as a separate center
Disadvantages