www.monash.edu.auMGF3681: International ManagementWeek 7:Organisational Structureand Control Systems
www.monash.edu.au2Week 6 Lecture• Contrast foreign, minireplica and transnational subsidiaries.• Define Global Product and Global Area structures and give anexample of when an organisation would use each one.• What is an export department? What is an internationaldivision? What are the advantages in having an internationaldivision?• Describe, using examples, of how a matrix structure works inan international organisation.• Evaluate the arguments in the centralisation / decentralisationdebate.
www.monash.edu.au3Organisational Structures• The Export Department• The International Division• Global Product Structure• Global Area Structure• Matrix Structure
www.monash.edu.au4What is this?Chief Executive OfficerGeneralAdministrationR&D Manufacturing Marketing ITExportDepartment
www.monash.edu.au5Export Department!• Usually the first foreign market entry mode formanufacturing• At low levels, may not require a change toorganisational structure• When exports increase, a separate export divisionmay be set up
www.monash.edu.au6What is this?Chief Executive OfficerDomestic Operations International OperationsAsiaEurope
www.monash.edu.au7International Division• A separate division is dedicated to managing thefirms international operations• Typically headed by a vice-president who reports tothe CEO• Usually accompanied by a significant shift inresource allocation• Still best suited to companies with relatively lowinternational sales
www.monash.edu.au8Advantages• It helps to concentrate managerial expertiseand know-how• Increased coordination of overseasfunctions
www.monash.edu.au9Disadvantages• Battle for resources between domestic andinternational sales• Knowledge transfer between domestic andinternational departments can prove difficult
www.monash.edu.au10What is this?Chief Executive OfficerVice PresidentAsia PacificVice PresidentMiddle EastVice PresidentSouth AmericaVice-PresidentNorth America
www.monash.edu.au11Global Area Structure• Divides the entire world operations of a firm intocountries or regions, with each area having a fairlyhigh degree of functional autonomy• The role of headquarters is to maintain overallstrategic direction and control of the MNEs finances
www.monash.edu.au12Advantages• Because operational and strategic decision makingis delegated to regions or countries, this companiesare allowed high levels of local responsiveness
www.monash.edu.au13Disadvantages• It can be inefficient due to repetition of efforts• It may become difficult to transfer learnings andknowledge across regions
www.monash.edu.au14What is this?Chief Executive OfficerInternetFixed Line DevicesNetworksMobile Devices
www.monash.edu.au15Global Product Structure!• A structure whereby the multinationalorganises around what is usually a fairlydiversified set of products• Each product division has responsibility forproducing and marketing a certain group ofproductions worldwide– E.g. P&G: Shavers, Shampoo, Snack Food
www.monash.edu.au16Advantages• All support functions (R&D, marketing, etc.)are focussed on the product and thereforemore specialised
www.monash.edu.au17Disadvantages• Duplication of corporate support functions• Tendency for managers to focus on subsidiarieswith the greatest potential for sales
www.monash.edu.au18What is This?Corporate TVsApplianceCell PhonesNorthAmericaEuropeAsia
www.monash.edu.au19Global Matrix Structure• Comprised of overlapping geographic andproduct division structures in which decisionmaking is shared between product andgeographic managers
www.monash.edu.au20Advantages• If implemented well, it can help achieveboth global integration and localresponsiveness
www.monash.edu.au21Disadvantages• Very complex and difficult to implement
www.monash.edu.au22Australia1. What type of organisational structure arrangement is the MNCgoing to use in setting up its Australian operation?2. Can this MNC benefit from any of the new organisationalarrangements, such as joint venture, the Japanese concept ofKeiretsu, or electronic networks?3. Will this operation be basically centralised or decentralised?
www.monash.edu.au23Next Week• Motivation Across Cultures• Need to have your textbook
www.monash.edu.au24Week 7 Lecture• What are the four components of the Basic Work MotivationalProcess? Provide an example of how cultural differences caninfluence each of these.• Explain Expectancy Theory of motivation. Using one or moreof Hofstede’s dimensions, discuss the influence of culturaldifferences have on this process.• Explain Equity Theory of motivation. Using one or more ofHofstede’s dimensions, discuss the influence of culturaldifferences have on this process.• Explain Goal-Setting Theory of motivation. Using one or moreof Hofstede’s dimensions, discuss the influence of culturaldifferences have on this process.