Corporate politics: Strategy and structure

Ara Y.

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Corporate politics: Strategy and structure

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Abstract

Organizational management theories are models based on the strategic core elements that define corporate structure. These strategic essentials are aimed towards corporate planning and decisional management processes. By essence, models follow the economic principle of ceteris paribus - “all other variables in the logical equation are assumed constant and fixed” – Wolfgram. Consequently, the need for organizations to reassess their structure and set new strategies in compliance of the market's regulations mechanisms is an understatement. In fact, growing evidence supports the argument that corporate models are archaic and need to be in compliance with the current environment. We will illustrate how corporation asset and liability management can swerve the orientation of a business into a misleading direction. Companies should focus instead in specialization and diversification of their operational and strategic avenues. These avenues feed from a corporate political system enabling businesses to be proactive and strategically functional to track, audit, and integrate many economic, financial, and operational variables

Abstract
Introduction
Corporate assessment
The shared cost structure under the experience curve model
1. Keichel's experiment regarding the cost structure
2. Answering the question 'what purpose shared cost and experience curve models serve?'
The Asset Segmentation model
1. Implication of specialization
2. The control panel and the maturity level of the portfolio
Value chain model and globalization
Conclusion
References

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[...] These two variables are intimately imbricated with the structural mapping of operational and managerial processes which leads me to the core content that corporate structure and strategic models are too complex for them to be assigned to archaic and obsolete models. When we exclusively funnel the benefits deriving from shared cost and experience curve models to other divisions without considering the major dysfunctional consequences, we take the risk to face many internal and external challenges. To the question: what purpose shared cost and experience curve models serve? [...]

[...] Specialization implies that all efforts are aligned within the corporate political and strategic structure and aimed towards specific goals. The objective is to achieve a sense of zenithal performance and gain a decisive competitive edge. every business must also try to obtain the most from its specialization. It must diversify. The balance between these two determines the scope of a business” (Kumar, 2005). In fact, the specialization factor reaches its end once the company accomplishes the above-mentioned objectives, but remains strictly linked to the diversification process. [...]

[...] Retrieved 10 Mar from http://www.bcg.com/publications/files/experience_curve_I_the_concept_1973.pd f The author explains the cost benefit implications derived from the experience curve model and briefly summarizes the relationships with various economic factors. Chandler Jr., Alfred D. Corporate strategy, structure and control methods in the United States during the 20th Century. (1962/1998). Retrieved 30 Mar from http://icc.oxfordjournals.org/cgi/reprint/1/2/263.pdf This article written by the American academic Alfred D. Chandler Jr. illustrates the evolution of corporate structure and strategy from century old “business organizational forms”. The author presents a chronological analysis on the “development of corporate strategies, structures and control systems” and identifies three founding sources. The analytical approach is carried from those sources. [...]

[...] He details how to balance these elements before adding another concept often misused or poorly applied: diversification. This article supports my thesis since it elaborates with a different approach the urgent need to consider and combine strategy and structure as a whole. Montreal spring meeting. Wanted Dead or Alive: Asset Segmentation RSA97V23N260D. (June 19-20, 1997). Retrieved 12 Mar from http:// /search?q=cache:SSbICu60U4UJ:www.soa.org/library/procee dings/record-of-the-society-of-actuaries/1990- 99/1997/january/rsa97v23n260d.pdf+critics+of+segmentation+strategy&hl=en&ct= clnk&cd=11&gl=us The author engages two “distinguished” professionals to debate on the asset segmentation model. The purpose of the debate is to show the relevant usage of the segmentation model when companies tend to [...]

[...] Drucker, the need to make strategy and structure compatible remains the biggest issue. “Planning, organizing, staffing, and organizational development are the key functions of top management in any organization” but the mismatch between strategy and structure has led many organizations to “devote their attention to lower- level tasks: operating, controlling, and budgeting.” (Willamette University, n.d) Furthermore, strategy and structure often collide and deform the flow of information and/or processes. When this collision of purposes occurs, the “impersonal forces argument [becomes inactive in eliminating] inefficient and unproductive institutions” (Willmott, 2000). [...]

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