A key corporate strategy is the ability to implement a corporate diversification, which was discussed in the previous post.
What entails this implementation you might ask. There are agency costs either benefit or negate the relationship between equity holder and managers. The agency relationship for Medtronic is the external principals with a financial investment into the company and the agents are the managers who carry out the decisions of these external principals. Management control systems and compensation policies are all aspects to the implementation of corporate diversification, but let us briefly look at organizational structure.
Medtronic has a multidimensional structure, or M-form. There are a board of directors who manage the decision making in the short and long run of the firm. On it sit individuals like the CEO and chairman of the board. The board also contains subcommittees which handle different aspects of the business, like auditing, finance, or compensation. In the hierarchy, board of directors sit atop the mountain surveilling the internal and external environment.
MEDTRONIC ORG CHART
MEDTRONIC BOARD & ADVISORS
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