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Organizational structure
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Specifies the firm's formal reporting relationships, procedures, controls, and authority and decision-making processes
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Structural stability
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Provides capacity the firm requries to consistently and predictably manage its daily work routines
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Structural flexibility
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Provides the opportunity to explore competitive possibilities and then allocate resources to activities that will shape the CA the firm will need to be successful in the future; exploit current CA while developing new ones to be used in future
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Organizational controls
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Guide the use of strategy, indicate how to compare actual results with expected results, and suggest corrective actions to take when the difference is unacceptable; supported by both strategic and financial contorls
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Strategic controls
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Largely subjective criteria intended to verify that the firm is using appropriate strategies for the conditions in the external environment and the company's CA
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Financial controls
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Largely objective criteria used to measure the firm's performance against previously established quantitative standards
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Strategy and structure growth pattern
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Simple structure -> sales growth (coordination and control problems) -> functional structure -> sales growth -> multidivisional structure
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Simple structure
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Structure in which the owner-manager makes all major decisions and monitors all activities while the staff serves as an extension of the manager's supervisory authority
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Functional structure
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Consists of a chief executive officer and a limited corporate staff, with functional line managers in dominant organizational areas such as production, acct, mktg, R&D, engineering, and HR
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Mutlidivisional (M-form) structure
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Consists of a corporate office and operating divisions, each operating division representing a separate business or profit center in which the top corporate officer delegates responsibilities for day-to-day operations and business-unit strategy to division managers
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