Week 7 International Management


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Week 7 International Management

  1. 1. www.monash.edu.au MGF3681: International Management Week 7: Organisational Structure and Control Systems
  2. 2. www.monash.edu.au 2 Week 6 Lecture • Contrast foreign, minireplica and transnational subsidiaries. • Define Global Product and Global Area structures and give an example of when an organisation would use each one. • What is an export department? What is an international division? What are the advantages in having an international division? • Describe, using examples, of how a matrix structure works in an international organisation. • Evaluate the arguments in the centralisation / decentralisation debate.
  3. 3. www.monash.edu.au 3 Organisational Structures • The Export Department • The International Division • Global Product Structure • Global Area Structure • Matrix Structure
  4. 4. www.monash.edu.au 4 What is this? Chief Executive Officer General Administration R&D Manufacturing Marketing IT Export Department
  5. 5. www.monash.edu.au 5 Export Department! • Usually the first foreign market entry mode for manufacturing • At low levels, may not require a change to organisational structure • When exports increase, a separate export division may be set up
  6. 6. www.monash.edu.au 6 What is this? Chief Executive Officer Domestic Operations International Operations AsiaEurope
  7. 7. www.monash.edu.au 7 International Division • A separate division is dedicated to managing the firms international operations • Typically headed by a vice-president who reports to the CEO • Usually accompanied by a significant shift in resource allocation • Still best suited to companies with relatively low international sales
  8. 8. www.monash.edu.au 8 Advantages • It helps to concentrate managerial expertise and know-how • Increased coordination of overseas functions
  9. 9. www.monash.edu.au 9 Disadvantages • Battle for resources between domestic and international sales • Knowledge transfer between domestic and international departments can prove difficult
  10. 10. www.monash.edu.au 10 What is this? Chief Executive Officer Vice President Asia Pacific Vice President Middle East Vice President South America Vice-President North America
  11. 11. www.monash.edu.au 11 Global Area Structure • Divides the entire world operations of a firm into countries or regions, with each area having a fairly high degree of functional autonomy • The role of headquarters is to maintain overall strategic direction and control of the MNEs finances
  12. 12. www.monash.edu.au 12 Advantages • Because operational and strategic decision making is delegated to regions or countries, this companies are allowed high levels of local responsiveness
  13. 13. www.monash.edu.au 13 Disadvantages • It can be inefficient due to repetition of efforts • It may become difficult to transfer learnings and knowledge across regions
  14. 14. www.monash.edu.au 14 What is this? Chief Executive Officer InternetFixed Line DevicesNetworksMobile Devices
  15. 15. www.monash.edu.au 15 Global Product Structure! • A structure whereby the multinational organises around what is usually a fairly diversified set of products • Each product division has responsibility for producing and marketing a certain group of productions worldwide – E.g. P&G: Shavers, Shampoo, Snack Food
  16. 16. www.monash.edu.au 16 Advantages • All support functions (R&D, marketing, etc.) are focussed on the product and therefore more specialised
  17. 17. www.monash.edu.au 17 Disadvantages • Duplication of corporate support functions • Tendency for managers to focus on subsidiaries with the greatest potential for sales
  18. 18. www.monash.edu.au 18 What is This? Corporate TVsApplianceCell Phones North America Europe Asia
  19. 19. www.monash.edu.au 19 Global Matrix Structure • Comprised of overlapping geographic and product division structures in which decision making is shared between product and geographic managers
  20. 20. www.monash.edu.au 20 Advantages • If implemented well, it can help achieve both global integration and local responsiveness
  21. 21. www.monash.edu.au 21 Disadvantages • Very complex and difficult to implement
  22. 22. www.monash.edu.au 22 Australia 1. What type of organisational structure arrangement is the MNC going to use in setting up its Australian operation? 2. Can this MNC benefit from any of the new organisational arrangements, such as joint venture, the Japanese concept of Keiretsu, or electronic networks? (define these terms first) 3. Will this operation be basically centralised or decentralised?
  23. 23. www.monash.edu.au 23 Week 7 Lecture • What are the four components of the Basic Work Motivational Process? Provide an example of how cultural differences can influence each of these. • Explain Expectancy Theory of motivation. Using one or more of Hofstede’s dimensions, discuss the influence of cultural differences have on this process. • Explain Equity Theory of motivation. Using one or more of Hofstede’s dimensions, discuss the influence of cultural differences have on this process. • Explain Goal-Setting Theory of motivation. Using one or more of Hofstede’s dimensions, discuss the influence of cultural differences have on this process.
  24. 24. www.monash.edu.au 24 Next Week • Motivation Across Cultures • Need to have your textbook