Report on Diversification and Managing Corporate Strategy in organisation to comprehend with requirement of employees

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Diversification and Managing Corporate Strategy


Diversification is one of the most important things in an organisation to comprehend with the requirement of employee and client satisfaction. In order to manage the entire system it is necessary to make sure that the people are working in a harmonious manner to keep up with the trend in the organisation (Azad & Parpala, 2017). There will be many issues that can have impact on the performance of the people but in the end it is going to have a delicate effect on the management process also. This is a realistic approach, which signifies the achievements of a CEO working in an organisation.

Diversification types

There are many diversification types but in this context the Horizontal and Concentric diversification is going to be taken into consideration. The main advantages and disadvantages are going to be discussed in this segment to find better idea of it. Diversification is a process with the help of which the one organisation develops and expands its current offerings to the targeted market (Saple, 2013).

Horizontal Diversification

The main attractiveness of the option is the companies make profit from investing in new things and offer new products and services to the people who are their main target group. The products offered by the companies make proficient contribution to the betterment of client satisfaction and in the end a proficient relation develops and the company reputation increase in front of the clients (Kirsch et al., 2014).

The external forces pay a huge role in business development and the process depends on the customer loyalty too. Still it is seen that the customer churn is very low and if anything goes wrong in the new venture then the possibility of losing the market is going to fall drastically.

Concentric Diversification

The aspect provides opportunity to flourish in the market and increase the market share to the people (Kim et al., 2017). Apart from that the most important thing this having a better kind of relation with the small departments with potential to meet large goals.

In this case the possibility having issues oriented with brand image is higher than anticipation. The probability of having problems related to market concentration is also high.

Issues associated with agency problems and mitigation of them

The main problem of the aspect is a person needs to have better work life balance. The people are associated with any job and offered with proper incentives (Kim et al., 2017). The incentives make people do such things that are against the protocol of the job and this raises the issues oriented with the business. Apart from this the quality of performance decrease and it is seen that without proper kind of management the process can get into a huge issue in the end.

In order to minimise the factor it is necessary that one organisation is making proper contribution in employee management and give incentives not only for work accomplishment but for the behavioural management too (Feng, Wen & Hu, 2017). In case of maintaining ethics the management should reward the employee to ensure proper behaviour and ethics from their point. This is going to make people aware of the factors that they should do and what protocols are important for them to have better kind of work life balance in the end of their professional career.

Strategic Control System 

Strategic control refers to the process used by all the business and non-profit organizations to manage the control of different strategies for achieving the corporate gaol in an efficient manner. Strategic control is urgent for all the organizations to evaluate its past performances and that helps management in effective decision making process (Feng, Wen & Hu, 2017). The senior management needs to select an organizational strategy based on requirements and matching the structure for organizational benefits. The main objectives of this system are to achieve the operational excellence, maintain quality services or products trigger research development process and maintain organizational performance. 

At first the management team needs to evaluate the current position of the organization and also needs to recognise the basic requirements or problems to select specific objectives and targets. Management also needs to create both measuring and monitoring system to compare actual performance with its target. Strategic control is divided into different parts such as financial control, behavioural control and Output controls will help the organization to improve its financial position and output controls helps to achieve both divisional and functional goals of the company (Wheelen et al., 2017).. Behavioural control is also important for every organization in preserving a good organizational culture. The four types of strategic controls such as, premise control, special alert control, and strategic surveillance control, implementation control also helps to enhance the organizational position effectively. A good strategic control system also maximise organizational strength and opportunities leads to gain more competitive advantages in operating market. 

Advantages and Issues of Managing Corporate Strategy through Multidivisional Structure

The multidivisional structure refers to the straightforward and simple setup that consists various divisions that run distinct businesses. The parent company mainly owns all the divisions and controlled the divisions centrally. Most of the business organizations are using this structure to  improve organizational performance as well as profitability (van der Steen & Tillema, 2018). Before implementation of this structure the organization needs to evaluate its advantages, disadvantages and other risk related factors otherwise it can hamper the overall organizational operation. At the same time organization needs to recognise its current position such as strength and weakness because organization needs to invest huge cost during implementation and affect the organizational financial position negatively. 

The multidivisional structure helps management to achieve the common divisional goals effectively. At the same time use of this structure enhance communication system and increase coordination among the employees leads to gain more operational excellence (Azad & Parpala, 2017). The workers have greater control over the task and this structure also helps individual employees to achieve their targets quickly. This structure allows the worker to focus on specific areas that will improve service and product quality leads to increase the number of customers. 

On the other hand this particular structure also has some disadvantages such as higher cost can creates negative effect on organizational operation. Setting up various division is also time consuming so that it also can reduce the performance overall organisation (van der Steen & Tillema, 2018). Huge resources and manpower needed in this structure so that it is not possible for smaller organizations to maintain the structure efficiently.

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