“Introduction: Strategy and Structure”
Looking at changing strategy and structure (stx.) of industrial enterprise in U.S. (large, private, profit-oriented businesses) through comparative analysis; specifically, he examines how executives coordinate, appraise, and plan

Multidivisional type of org.: findings reveal this organization form is used by firms to carry out most diverse economic activities…a general office plans, coordinates, and appraises the work of a number of operating divisions and allocates to them the necessary personnel, facilities, funds, and other resources…executives in charge of divisions have under their command most of the functions necessary for handling one major line of producers, etc…each executive is responsible for financial results of division…known as a “decentralized” structure (see p.10 chart)

Members of big four (du Pont, GM, Jersey Standard, Sears) initiated these reorganizations first, but he found that they did so independently of each other; important facts from study of big four:
1. for proper analysis, info. is required on entire administrative history and previous org. stx.
2. changes in org. stx. were related to the ways in which the enterprise expanded
3. expansion/growth reflected changes in US economy
4. expansion/growth was influenced by state of administrative art in US at the time

Propositions
1. administration is an identifiable entity…the concern of executives is more administration than the performance of functional work (e.g. buying, selling, processing)
2. executive faces different levels of decision-making:  tactical (day to day) and strategic (long-term planning)
3. stx. of administrative activity is in four different types of positions at different levels of authority (i.e. general office, central office, dept. headquarters, field units)…only in field units are managers involved in day to day activities

Each position handles a different range of admin. activities…different forms result from different types of growth…planning and carrying out of growth is considered a strategy, and the org. devised to administer these enlarged activities and resources are the structure…

Strategy is the determination of the basic long term goals and objectives, and the adoption of courses of action and the allocation of resources necessary for carrying out goals…
Structure is the design of the org. through which the enterprise is administered…two parts, (1) the lines of authority and communication between the different admin. offices and (2) officers and the info. and data that flow through these lines of communication and authority
Structure follows strategy

Growth resulted from the awareness of the opportunities and needs to employ existing or expanding resources more profitably and efficiently (where existing demand and technology created them)
Each admin. story has two parts:  creation of org. stx. after the first major growth or rebirth, and then its reorganization to meet the needs arising from the strategies of further expansion

“Historical Setting”
Railroads, canals, noted superintendent of canals was McCallum…beginning of careful and detailed definition of lines of authority + communication between headquarters and five divisions in the field

Building of RRs made this growth possible more than any other industry…expansion of market required enterprises to expand and subdivide their activities

Great impersonal corporate enterprises began to appear after Depression of 1880s and 1890s

Expansion in manufacturing through expansion/integration and large horizontal mergers (reduces competition)…legal instruments followed suit…consolidated and subsequent transformation allowed economies of scale through standardization of processes and procurement of material

Preponderance for large centralized stx. left few men entrusted with a great number of complex decisions…further changes rested on technological and pop. changes (urbanization)

Led to multidivisional structure

Growth through three strategies:
1. expansion of firm’s existing lines to same type of customers
2. quest for new markets and sources of supplies
3. opening of new markets by developing a wide range of new products for different types of customers

Growth through diversification increased number and complexity of operational and entrepreneurial activities --> intolerable strain on existing administrative stx., territorial expansion, and product diversification brought the multidivisional form (mostly product diversification, though), a new structure that called for both autonomous operating divisions and a controlling and administering general office