BUILDING AN ORGANIZATION CAPABLE OF GOOD STRATEGY EXECUTION : PEOPLE, CAPABILITIES AND STRUCTURE

Now, let's continue another chapter.....

Strategy- Supportive Resources and Capabilities

   1) Staffing the organization

   2) Acquiring, Development and Strengthening Key Resources and Capabilities

Strategy- Supportive Organizational Structure

 1) Structuring the organization and work effort

Centralized - retained by top management

Decentralized - delegated to lower-level managers and employees

Simple structure -  handles all major decision and oversees all operation with staffs.

Functional structure  - organized into functional departments. eg: department marketing, department operations, department sales.

Matrix structure - two or more organization forms.

Multidivisional structure - decentralized structure consisting of a set operating divisions.

CORPORATE STRATEGY : DIVERSIFICATION AND THE MULTIBUSINESS COMPANY

Assalamualaikum w.b.t....

What I understand from this chapter, corporate strategy means start diversify more than one industry.

Strategies Diversification Option have four which is :

   1) Sticking closely with the existing business lineup and pursuing opportunities presented by these businesses.

 eg : Affin Bank acquire Hwang-DBS, financial can be strong.

2) Broadening the current scope of diversification by entering additional industries.

eg : Tabung Haji not only manage people who want to make pilgrimage, but Tabung Haji have invest plantation and property.

3) Divesting some businesses and retrenching to a narrower collection of diversified businesses with better overall performance prospects.

4) Restructuring the entire firm by divesting some businesses and acquiring others to put a whole new face on the firm's business line up.

Three test before enter into industry

1. The Attractiveness Test : profits and return on investment as good or not.

                                                        Business focused- new entrance,supplier and other                                                   five forces

                                               conclusion - industry attractiveness

     2. The cost of Entry Test : cost overcoming entry barriers so great or reduce the potential for profitability.

    3. The Better-Off : synergy ( 1+1=3) - more than, not making only. It provides the best     company.

Intrapreneurship - everybody in company can create any idea to provide product.

Economic of Scale - the units price of goods little, produced many.

Economic of Scope - produce the same number with the low price.