Ch06

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organizational design, structure

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Ch06

  1. 1. Thomson Learning © 2004 6-1 Chapter Six Designing Organizations for the International Environment
  2. 2. Thomson Learning © 2004 6-2 Four Stages of International Evolution I. Domestic II. International III. Multinational IV. Global Strategic Orientation Domestically oriented Export-oriented, multidomestic Multinational Global Stage of Development Initial foreign involvement Competitive positioning Explosion Global Structure Domestic structure plus export department Domestic structure plus international division Worldwide geographic, product Matrix, trans- national Market Potential Moderate, mostly domestic Large, multidomestic Very large, multinational Whole world Sources: Based on Nancy J. Adler, International Dimensions of Organizational Behavior (Boston: PWS-KENT, 1991), 7-8; and Theodore T. Herbert, “Strategy and Multinational Organization Structure: An Interorganizational Relationships Perspective,” Academy of Management Review 9 (1984): 259-71.
  3. 3. Thomson Learning © 2004 6-3 Matching Organizational Structure to International Advantage When Forces for Global Integration are . . . And Forces for National Responsiveness are . . . Strategy Structure Low Low Export International Division High Low Globalization Global Product Structure Low High Multidomestic Global Geographic Structure High High Globalization and Multidomestic Global Matrix Structure
  4. 4. Thomson Learning © 2004 6-4 Domestic Hybrid Structure with International Division Scientific Products Division Research & Development Human Resources Medical Products Division Europe (Sales) Electrical Products Division Corporate Finance CEO International Division Brazil (Subsidiary) Mid East (Sales) Staff (Legal, Licensing)
  5. 5. Thomson Learning © 2004 6-5 Partial Global Product Structure Used by Eaton Corporation Engineering President InternationalLaw & Corporate Relations Chairman Finance & Administration Regional Coordinators Global Automotive Components Group Global Industrial Group Global Instruments Product Group Global Materials Handling Group Global Truck Components Group Source: Based on New Directions in Multinational Corporate Organization (New York: Business International Corp., 1981).
  6. 6. Thomson Learning © 2004 6-6 Global Matrix Structure International Executive Committee Power Transformers Germany Norway Argentina/ Brazil Spain/ Portugal Transportation Industry Business Areas Country Managers Local Companies
  7. 7. Thomson Learning © 2004 6-7 Building Global Capabilities  The Global Organizational Challenge Increased Complexity and Differentiation Need for Integration Knowledge Transfer  Global Coordination Mechanisms Global Teams Headquarters Planning Expanded Coordination Roles
  8. 8. Thomson Learning © 2004 6-8 Cultural Differences in Coordination and Control  National Value Systems Power Distance Uncertainty Avoidance  Three National Approaches to Coordination and Control Centralized Coordination in Japanese Companies European Firms’ Decentralized Approach The United States: Coordination and Control through Formalization
  9. 9. Thomson Learning © 2004 6-9 Transnational Model of Organizations  Assets and resources are dispersed worldwide into highly specialized operations that are linked together through interdependent relationships.  Structures are flexible and ever-changing.  Subsidiary managers initiate strategies and innovations that become strategy for the corporation as a whole.  Unification and coordination are achieved primarily through corporate culture, shared visions and values, and management style rather than through formal structures and systems
  10. 10. Thomson Learning © 2004 6-9 Transnational Model of Organizations  Assets and resources are dispersed worldwide into highly specialized operations that are linked together through interdependent relationships.  Structures are flexible and ever-changing.  Subsidiary managers initiate strategies and innovations that become strategy for the corporation as a whole.  Unification and coordination are achieved primarily through corporate culture, shared visions and values, and management style rather than through formal structures and systems

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