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    stages of strategic development


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    2 : Stages of corporate development Successful corporations tend to follow a pattern of structural development as they grow and expend. Beginning with the simple structure of the entrepreneurial firm (in which everybody does everything), they usually (if they are successful) get larger and organize along functional lines with marketing, production & financial dpt.
    3 : With continuing success, the company adds new product lines in different industries & organizes itself into interconnected divisions
    4 : Stage-1: Simple Structure This stage s typified by the entrepreneur, who founds the company to promote an idea (product & services). Company has little formal structure, which allows to directly supervise of every employee Planning is usually short range or reactive.
    5 : Stage 2: Functional Stage Entrepreneur is replaced by a team of managers who have functional specializations. The chief officer of the company must learn to delegate; otherwise, having additional staff members yield no benefits to the organization. Strength of stage-2 corporation lies in its concentration and specialization in one industry.
    6 : And the weakness is that all of its eggs are in one basket. So, the company needs to move to a different structure.
    7 : Stage 3: Divisional Structure This stage is typified by the corporations managing diverse product lines in numerous industries. It decentralizes the decision-making authority. These organizations grow by diversifying their product lines & expending to cover wider geographical areas.
    8 : Organizations move to a divisional structure with a central headquarters & decentralized operating divisions – each division or business unit is a functionally organized stage 2 company.
    9 : Stage 4: Beyond SBUs Even with its evolution into strategic business units during the 1970s to 1980s, the div. form is not the last word in organizational structure. The use of SBUs may result in a red tape crisis New advanced forms of organizational structure have emerged under conditions of Increasing environmental uncertainty, Greater use of sophisticated technological production methods and information system,
    10 : The increasing size and scope of worldwide business corporations, A greater emphasis on multy – industry competitive strategy, and A more educated cadre of managers and employees.
    11 :

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