Policy & Strategy There Are Term Paper

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Cons are that SBUs add a layer of management, the SBU executive. This gives rise to organizational complexity at high levels, including potential conflicts with regards to senior management roles and performance recognition.

A line of business structure has the benefit of being very product-focused. This allows decisions to be made at a level much closer to the day-to-day operating environment of each product. This structure, however, encourages duplication of staff functions. Moreover, each business line is removed that much further from the corporate objectives, and corporate executives risk losing touch with individual lines of business, leaving them unable to respond or react to problems quickly.

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Matrix structures combine two or more other structures. This encourages cooperation across business and functional units, and refocuses everybody on what is best for the company as a whole, rather than their individual area. This in turn creates a system of balances. However, matrix structures are very complex and difficult to manage. Furthermore, it is hard to move efficiently through multiple channels of authority......

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