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11-7dBuilding Effective Technical SkillsExercise OverviewTechnical skills are necessary to understand or perform the specific kind ofwork that an organization does. This exercise asks you to use your technicalskills to understand the impact of an organization’s strategy on its structure.Exercise BackgroundYou’re a manager in a firm that’s developed an innovative new system ofpersonal transportation, much like the Segway HT but different enough to getyou a patent. (If you’re not familiar with Segway products, go to the website atwww.segway.com.)Exercise TaskEach of the following items provides you with a hypothetical direction for yourfirm’s corporate-level strategy. Combining this information about your strategywith your knowledge of your Segway-like product, choose an appropriate formof organization structure for your company.1. Your corporate-level strategy calls for continued production of a limitedline of similar products for sale in the United States. What would be themost appropriate organization structure for your firm?2. Your corporate-level strategy calls for continued production of your coreproduct only, but you intend to sell it in Asia and Europe as well as NorthAmerica. What would be the most appropriate organization structure foryour firm?1/24/2021Print Previewhttps://ng.cengage.com/static/nb/ui/evo/index.html?dockAppUid=101&eISBN=9781305630314&id=1052777260&nbId=2185005&snapshotId=2185005&2/23. Your corporate-level strategy calls for you to move into areas related toyour core product, integrating the design innovations that you developedfor that product into several other products. What would be the mostappropriate organization structure for your firm?4. Your corporate-level strategy calls for you to exploit your expertise inpersonal ground transportation in order to move into other areas, suchas personal air or personal water transport. What would be the mostappropriate organization structure for your firm?5. Your corporate-level strategy calls for you to invest the revenuegenerated by core-product sales in industries unrelated to that product.What would be the most appropriate organization structure for yourfirm?6. Review your responses to each of the five preceding strategies. Explainprecisely how a given strategy influenced your choice of a givenorganizational design

Newer Case Questions1. Recall our definition of strategy in Chapter 7 as “a comprehensive plan foraccomplishing an organization’s goals.” Explain why NOV’s approach toacquisitions qualifies as corporate-level strategy. Be specific by discussing thecompany’s moves, the nature and state of the industry that it’s in (drillingequipment and services), the nature and state of the industry to which it’sclosely related (oil and gas drilling), and, most importantly, its goals. What areNOV’s goals?2. How does each of the following situational influences on organizational designaffect organizational design (and strategy) at NOV—core technology,environment, and organizational size? How about organizational life cycle? Atwhat stage in that cycle would you put NOV? Which of NOV’s actions give anindication of the company’s life-cycle stage as management sees it? (Note:NOV intends to spend $100 billion in the next 10 years.)3. Wall Street has a surprisingly uneasy relationship with NOV. Stock price, forexample, hasn’t nearly kept pace with increase in earnings over the pastdecade. For one thing, some sectors of the company’s business make itsoverall performance somewhat volatile, and analysts at Motley Fool observethat “NOV’s volatility isn’t its best feature.” Asked about the spinoff ofDistributionNOW and the subsequent reorganization, Pete Miller replied: “Wethink it’s going to give the analysts a better opportunity to be able to look at1/24/2021Print Previewhttps://ng.cengage.com/static/nb/ui/evo/index.html?dockAppUid=101&eISBN=9781305630314&id=1052777260&nbId=2185005&snapshotId=2185005&4/6the company and say, ‘OK, I understand this part of it, and I understand thispart of it,’ and probably get a better valuation.”Strategically speaking, how would you characterize the message that thecombination spinoff and organizational redesign are supposed to send toinvestors and analysts? Why do you suppose NOV management felt the needto send it? Why do you suppose it was sent when it was sent?4. An investment analyst asked Pete Miller how his acquisitions strategy affectsthe company “from the top down in your company culture.” How does thecompany culture “allow your employees to buy into these new companiescoming into the fold?” Miller replied, “I don’t think a company like ours canhave a culture. We’re too spread out. In 63 countries, you’ve got all differentcultures.” But he also added that employees understand how a strategy ofacquisition provides opportunity. “I tell everybody in this company, I’m not surewhat a CEO is supposed to do, but one of the things that I do try to do isprovide opportunity to our employees. You provide that opportunity bygrowing. As you continue to grow and people actually see the opportunity,then they see what it affords to employees as well as customers.”What about you? Would this theory of company culture, along with its theoryabout employee appreciation of opportunity, appeal to you? Would it berelevant to you in deciding whether to take a job at NOV? Would you want towork for a company with 64,000 employees in 63 countries?
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