Discuss the Similarities and Differences of the Organizational Structures Used

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The Answer is Both cost-leadership and product-differentiation strategies are implemented through the use of a functional, or U-form, organizational structure. However, where the U-form structure used to implement a cost-leadership strategy has few layers, simple reporting relationships, a small corporate staff, and focuses on only a few business functions, the U-form structure for a firm implementing a product-differentiation strategy can be somewhat more complex. For example, firms pursuing a product-differentiation strategy often use a matrix structure that includes temporary cross-divisional and cross-functional teams to manage the development and implementation of new, innovative, and highly differentiated products. These teams bring individuals together from different businesses and different functional areas to cooperate on a particular new product or service.
One of the key management controls in a product-differentiation strategy is broad decision-making guidelines. These broad decision-making guidelines help bring order to what otherwise might be a chaotic decision-making process. When managers have no constraints in their decision-making, they can make decisions that are disconnected from each other and inconsistent with a firm's overall mission and objectives. This results in decisions that are either not implemented or not implemented well.
However, if decision-making guidelines become too narrow, they can stifle creativity within a firm, and a firm's ability to differentiate its products is only limited by its creativity. Thus, decision guidelines must be narrow enough to ensure that decisions that are made are consistent with a firm's mission and objectives.

Discuss the Similarities and Differences of the Organizational Structures Used

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