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Chapter 12 - Organizing and Planning for Effective Implementation
End of Chapter Discussion Questions and Answers
1. Suppose you have been offered the job of developing and managing a new medical
products unit for a major electronics manufacturer. The purpose of the new SBU will
be to adapt technology from other parts of the company for medical applications
(diagnostic equipment such as CAT scanners, surgical lasers, etc.) and to identify and
build markets for the new products the unit develops. The new unit’s performance over
the next several years will be judged primarily on its success at developing a variety of
new products and its rate of growth in sales volume and market share. Before
accepting the job, what assurances would you seek from the company’s CEO
concerning the administrative relationships to be established between the new SBU and
corporate headquarters? Why?
Answer:
Student answers may vary. Answers may contain the following elements:
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 12 - Organizing and Planning for Effective Implementation
The text lists three aspects of the corporate-business unit relationship that can affect the
SBU’s success in implementing a particular competitive strategy. Among them is the degree
of autonomy of each business unit manager. The company appears to be a prospector.
Prospector businesses perform better on dimensions of new product success and
increases in volume and market share when organizational decision-making is
Increasingly, companies around the world are adopting some form of pay-for-performance
compensation scheme.
2. Now that you have accepted the job described in question 1, you have been given a $50
million operating budget for the first year. Your first task is to staff the new unit and to
allocate your budget across its various functional departments. Although you obviously
want to hire good people for every position, which departments require the most
competent and experienced personnel, and which departments should receive relatively
large shares of the available budget? Why?
Answer:
Student answers may vary. The insights offered by the text include the following:
Successful implementation of a given strategy is more likely when the business has the
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 12 - Organizing and Planning for Effective Implementation
The firm seems to be using a prospector strategy:
Competence in marketing, sales, product R&D, and engineering is critical to the
3. As general manager, what type of organizational design would you select for the new
SBU described in question 1? Justify your choice in terms of its ability to help the SBU
implement its strategy and accomplish its primary objectives. What potential
disadvantages—if any—might be associated with your chosen organizational
structure?
Answer:
Students’ answers may vary. The insights offered by the text include the following:
Product market organization should be used
When a company or SBU has many product-market entries, the simple functional form
of organization is inadequate.
Product management organizations have a number of advantages:
The ability to identify and react quickly to threats and opportunities individual
product-market entries face
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 12 - Organizing and Planning for Effective Implementation
A product management organization also has shortcomings:
The major one is the difficulty of obtaining the cooperation necessary to develop and
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
