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Corporate Organizational StructureAfter by-passing the current organizational structure and being careful not to lump distinct businesses together, it becomes clear that every company can be logically viewed as a collection of "N" businesses. In order to reap economies of scale and other advantages, corporations often establish horizontal units (centralized departments or cost centers) for functions like information systems development and human resource management in order to serve the needs of two or more businesses. These horizontal units are shown as the gray bars going across the page. Note that not all horizontal units perform an activity for every business unit within the corporation. The total set of business units and the total set of horizontal units comprise the basic components of corporate strategy. |
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