Organizing for an
emerging world
The structures, processes, and communications approaches of
many far-flung businesses have been stretched to the breaking point.
Here are some ideas for relieving the strains.
The problem
Rising complexity is making
global organizations more difficult
to manage.
Why it matters
Organizational friction can hamper
growth, especially in emerging
markets; undermine strategic decision
making; and make it harder to
manage costs, people, and risks.
Toby Gibbs, Suzanne Heywood, and Leigh Weiss
What to do about it
Revisit the case for regional orga-
nizational layers and consider
grouping activities according to
nongeographic criteria, such
as growth goals.
Streamline processes without
standardizing more than is
necessary, force-fitting rigid
technology solutions, or creating
overly detailed rules.
Consider moving the corporate
center (or creating a “virtual head-
quarters”) closer to high-growth
markets, and ensure a constant flow
of talent between the business
units and the center.
Find out how and why people share
information, and then decide which
connections to drop, keep, or add.
J U N E 2 0 1 2
o r g a n i z a t i o n p r a c t i c e
2
As global organizations expand, they get more complicated
and difficult to manage. For evidence, look no further than the inter-
views and surveys we recently conducted with 300 executives at
17 major global companies. Fewer than half of the respondents believed
that their organizations’ structure created clear accountabilities,
and many suggested that globalization brings, as one put it, “cumula-
tive degrees of complexity.”
However, our research and experience in the field suggest that even
complex organizations can be improved to give employees around
the world the mix of control, support, and autonomy they need to do
their jobs well. What’s more, redesigning an organization to suit
its changing scale and scope can do much to address the challenges
of managing strategy, costs, people, and risk on a global basis.
Our goal in this article isn’t to provide a definitive blueprint for the
global organization of the future (there’s no such thing), but rather
to offer multinationals fresh ideas on the critical organizational-
design questions facing them today: how to adjust structure to sup-
port growth in emerging markets, how to find a productive balance
between standardized global and diverse local processes, where
to locate the corporate center and what to do there, and how to deploy
knowledge and skills effectively around the world by getting the
right people communicating with each other—and no one else.
Rethinking boundaries
Global organizations have long sought to realize scale benefits by
centralizing activities that are similar across locations and tailoring
to local markets any tasks that need to differ from country to coun-
try. Today, as more an.
There are few constants in this world, but the way in which we do business is not one of them. Instead, companies must actively adapt to change within the marketplace. As the international landscape continues to grow smaller due to advances in technology, businesses are realizing the importance of operating on a global scale.
View the original Blog post: http://www.eprentise.com/blog/the-changing-enterprise/preparing-for-tomorrows-market/
Website: www.eprentise.com
Twitter: @eprentise
Google+: https://plus.google.com/u/0/+Eprentise/posts
Facebook: https://www.facebook.com/eprentise
Ensure your data is Complete, Consistent, and Correct by using eprentise software to transform your Oracle® E-Business Suite.
There are few constants in this world, but the way in which we do business is not one of them. Instead, companies must actively adapt to change within the marketplace. As the international landscape continues to grow smaller due to advances in technology, businesses are realizing the importance of operating on a global scale. As with any equally ambitious venture, although there is great potential for a strong return on investment (ROI), moving to a global model – or even strengthening one’s current global infrastructure – comes with a unique set of challenges. Among the most prevalent are the needs to operate around-the-clock, extend influence within emerging markets and implement a global vision throughout the enterprise.
View the original Blog post: http://www.eprentise.com/blog/the-changing-enterprise/preparing-for-tomorrows-market/
Website: www.eprentise.com
Twitter: @eprentise
Google+: https://plus.google.com/u/0/+Eprentise/posts
Facebook: https://www.facebook.com/eprentise
Developing global manufacturing operationscarolllee
Manufacturing companies are increasingly developing global operations to take advantage of lower costs, geographic locations, and resource availability. However, managing global manufacturing operations remains a significant challenge. This article explores 10 key issues, challenges, and potential solutions for multi-national manufacturing organizations operating globally, such as developing a clear management philosophy and organizational structure, implementing common global systems, facilitating collaborative operations, and focusing on brand management and process quality improvement initiatives.
This document discusses the importance of strategic direction and organizational design. It defines strategic direction as an organization's roadmap that outlines objectives, resources, and how the organization will function. However, many organizations fail to incorporate internet and technology into their strategic vision. The document also discusses strategic business units (SBUs) which allow for effective control over business factors. There are limitations to the SBU model as well. The roles of organizational design are outlined, including bringing a rigorous design approach, linking organization to strategy, focusing head offices on value creation, driving accountability, enabling collaboration, and dealing with complexity. Finally, it states that as economic systems become more complex, strategic management may help restore entrepreneurial vigor through rigorous planning and operational execution
Globalization has created new expectations around talent management that many companies are struggling to meet. Digital transformation using cloud-based HR solutions can help companies better leverage global talent markets while keeping their HR strategies localized. These solutions allow information to be easily shared across borders and simplify complex tasks like payroll management for multinational companies. HR must ensure their strategies and technologies are aligned with business priorities and focus on delivering capabilities that support the company's global business goals.
Tricks of the Transformation Trade: Disruptive Disintermediation, Agility Age...UMT
A vast majority of U.S multinational firms – 93% in fact, according to a recent survey – are at some stage
of undergoing or preparing for business transformation initiatives. This is being driven by an unprecedented
confluence of changes in customer behavior, disruptive technology and domestic competition, among other
key triggers. It’s constantly “transform or wither” in today’s volatile global business, and
agility is the executive imperative of the day, albeit an elusive one. An organization’s long term success or failure
depends on its capacity to consistently identify opportunities and risks and renew itself faster than rivals do.
Business leaders need to be more efficient and effective at updating and implementing strategies than ever
before. If wielded correctly, an important weapon in their agility war chest is a new style of enterprise program
management office (PMO) that is more comprehensive than in the past.
The corporate center of many major companies will undergo significant changes over the next 5 years. The size of headquarters will shrink as more transactional work is outsourced and automated, reducing costs by 25-40%. Headquarters staff will transition from administrators to specialized experts in areas like data analytics, digital technologies, and change management. Corporate functions will be restructured as flexible, cross-functional teams that form around priorities and dissolve when work is complete. This will require recruiting new types of digital talent and offering more flexible employment.
There are few constants in this world, but the way in which we do business is not one of them. Instead, companies must actively adapt to change within the marketplace. As the international landscape continues to grow smaller due to advances in technology, businesses are realizing the importance of operating on a global scale.
View the original Blog post: http://www.eprentise.com/blog/the-changing-enterprise/preparing-for-tomorrows-market/
Website: www.eprentise.com
Twitter: @eprentise
Google+: https://plus.google.com/u/0/+Eprentise/posts
Facebook: https://www.facebook.com/eprentise
Ensure your data is Complete, Consistent, and Correct by using eprentise software to transform your Oracle® E-Business Suite.
There are few constants in this world, but the way in which we do business is not one of them. Instead, companies must actively adapt to change within the marketplace. As the international landscape continues to grow smaller due to advances in technology, businesses are realizing the importance of operating on a global scale. As with any equally ambitious venture, although there is great potential for a strong return on investment (ROI), moving to a global model – or even strengthening one’s current global infrastructure – comes with a unique set of challenges. Among the most prevalent are the needs to operate around-the-clock, extend influence within emerging markets and implement a global vision throughout the enterprise.
View the original Blog post: http://www.eprentise.com/blog/the-changing-enterprise/preparing-for-tomorrows-market/
Website: www.eprentise.com
Twitter: @eprentise
Google+: https://plus.google.com/u/0/+Eprentise/posts
Facebook: https://www.facebook.com/eprentise
Developing global manufacturing operationscarolllee
Manufacturing companies are increasingly developing global operations to take advantage of lower costs, geographic locations, and resource availability. However, managing global manufacturing operations remains a significant challenge. This article explores 10 key issues, challenges, and potential solutions for multi-national manufacturing organizations operating globally, such as developing a clear management philosophy and organizational structure, implementing common global systems, facilitating collaborative operations, and focusing on brand management and process quality improvement initiatives.
This document discusses the importance of strategic direction and organizational design. It defines strategic direction as an organization's roadmap that outlines objectives, resources, and how the organization will function. However, many organizations fail to incorporate internet and technology into their strategic vision. The document also discusses strategic business units (SBUs) which allow for effective control over business factors. There are limitations to the SBU model as well. The roles of organizational design are outlined, including bringing a rigorous design approach, linking organization to strategy, focusing head offices on value creation, driving accountability, enabling collaboration, and dealing with complexity. Finally, it states that as economic systems become more complex, strategic management may help restore entrepreneurial vigor through rigorous planning and operational execution
Globalization has created new expectations around talent management that many companies are struggling to meet. Digital transformation using cloud-based HR solutions can help companies better leverage global talent markets while keeping their HR strategies localized. These solutions allow information to be easily shared across borders and simplify complex tasks like payroll management for multinational companies. HR must ensure their strategies and technologies are aligned with business priorities and focus on delivering capabilities that support the company's global business goals.
Tricks of the Transformation Trade: Disruptive Disintermediation, Agility Age...UMT
A vast majority of U.S multinational firms – 93% in fact, according to a recent survey – are at some stage
of undergoing or preparing for business transformation initiatives. This is being driven by an unprecedented
confluence of changes in customer behavior, disruptive technology and domestic competition, among other
key triggers. It’s constantly “transform or wither” in today’s volatile global business, and
agility is the executive imperative of the day, albeit an elusive one. An organization’s long term success or failure
depends on its capacity to consistently identify opportunities and risks and renew itself faster than rivals do.
Business leaders need to be more efficient and effective at updating and implementing strategies than ever
before. If wielded correctly, an important weapon in their agility war chest is a new style of enterprise program
management office (PMO) that is more comprehensive than in the past.
The corporate center of many major companies will undergo significant changes over the next 5 years. The size of headquarters will shrink as more transactional work is outsourced and automated, reducing costs by 25-40%. Headquarters staff will transition from administrators to specialized experts in areas like data analytics, digital technologies, and change management. Corporate functions will be restructured as flexible, cross-functional teams that form around priorities and dissolve when work is complete. This will require recruiting new types of digital talent and offering more flexible employment.
Definitions And Overview Of Business Performance ManagementSamantha Randall
Here are a few key points that could be made to strengthen the case for improving the business's performance management activities:
- The current approach is negatively impacting productivity, quality, costs and the bottom line. Financial performance is suffering due to delays, rework, higher training costs and loss of sales/market share to competitors.
- Employee engagement and morale are low. There is conflict between new and old employees. High turnover is disruptive and expensive. Improving performance management could help align employees behind common goals and foster a more positive work culture.
- Customers are receiving subpar service due to errors and delays. The business risks further damage to its reputation and loss of loyal customers. Effective performance management could help ensure quality
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Citation
Title:
The global company's challenge.
Authors:
Dewhurst, Martin1
Harris, Jonathan2
Heywood, Suzanne
Aquila, Kate
Source:
McKinsey Quarterly. 2012, Issue 3, p76-80. 5p.
Document Type:
Article
Subject Terms:
*International business enterprises
*Emerging markets
*Economies of scale
*Contracting out
*Risk management in business
*Business models
*Executives
*Financial leverage
*Globalization
*Research & development
Developing countries
Company/Entity:
International Monetary Fund DUNS Number: 069275188
Aditya Birla Management Corp. Pvt. Ltd.
International Business Machines Corp. DUNS Number: 001368083 Ticker: IBM
NAICS/Industry Codes:
919110 International and other extra-territorial public administration
928120 International Affairs
541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
541711 Research and Development in Biotechnology
Abstract:
The article focuses on the management of risks, costs, and strategies by international businesses in emerging markets. It states that the International Monetary Fund reported that the ten fastest-growing economies after 2012 will all be in developing countries. It mentions that technology company International Business Machines expects by 2015 to earn 30 percent of revenues in emerging markets compared to 17 percent in 2009, while Indian multinational conglomerate Aditya Birla Group earns over half of its revenue outside India and has operations in 40 nations. It talks about the benefit of economies of scale in shared services enjoyed by large global companies and comments that the ability to outsource business services and manufacturing is benefiting local businesses.
Author Affiliations:
1director in McKinsey's London office
2director in the New York office
Full Text Word Count:
1632
ISSN:
0047-5394
Accession Number:
78031780
Database:
Business Source Complete
PlumPrintNo Results Found
Translate Full Text:
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The global company's challenge
Contents
1. St.
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Citation
Title:
The global company's challenge.
Authors:
Dewhurst, Martin1
Harris, Jonathan2
Heywood, Suzanne
Aquila, Kate
Source:
McKinsey Quarterly. 2012, Issue 3, p76-80. 5p.
Document Type:
Article
Subject Terms:
*International business enterprises
*Emerging markets
*Economies of scale
*Contracting out
*Risk management in business
*Business models
*Executives
*Financial leverage
*Globalization
*Research & development
Developing countries
Company/Entity:
International Monetary Fund DUNS Number: 069275188
Aditya Birla Management Corp. Pvt. Ltd.
International Business Machines Corp. DUNS Number: 001368083 Ticker: IBM
NAICS/Industry Codes:
919110 International and other extra-territorial public administration
928120 International Affairs
541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
541711 Research and Development in Biotechnology
Abstract:
The article focuses on the management of risks, costs, and strategies by international businesses in emerging markets. It states that the International Monetary Fund reported that the ten fastest-growing economies after 2012 will all be in developing countries. It mentions that technology company International Business Machines expects by 2015 to earn 30 percent of revenues in emerging markets compared to 17 percent in 2009, while Indian multinational conglomerate Aditya Birla Group earns over half of its revenue outside India and has operations in 40 nations. It talks about the benefit of economies of scale in shared services enjoyed by large global companies and comments that the ability to outsource business services and manufacturing is benefiting local businesses.
Author Affiliations:
1director in McKinsey's London office
2director in the New York office
Full Text Word Count:
1632
ISSN:
0047-5394
Accession Number:
78031780
Database:
Business Source Complete
PlumPrintNo Results Found
Translate Full Text:
Translation in Progress:
Translations powered by Language Weaver Service
The global company's challenge
Contents
1. St ...
Organizational Change Management: A Make or Break Capability for Digital SuccessCognizant
To realize the full benefits of digital transformation programs, businesses must manage the impact of digital change on their operational structure, culture and employees.
This document discusses organizational design in public and private organizations. It will examine the differences and similarities between how public and private organizations make design decisions. It will consider how these sectors can learn from each other regarding design. The document will also investigate how strategic planning informs design changes and how organizations approach managing the design process to ensure buy-in. Key topics that will be covered include organizational design models, motivations for design decisions, and ensuring roles and collaboration are considered alongside structure.
The document outlines a three-step process for companies to identify and prioritize new market opportunities adjacent to their core business in order to accelerate growth. Step 1 involves gaining alignment on objectives, unique capabilities, and criteria. Step 2 uses secondary research to develop fact bases to screen and rank adjacencies. Step 3 performs in-depth assessments to determine the best adjacency to pursue. The process is designed to efficiently identify opportunities and allocate resources to the most promising ones.
This presentation explains what merger and acquisition is, How integration is important after merger and acquisition, how it is to be done, what can be the factors of failure, what is the role of an HR during integration and what strategies companies should follow for a successful Post Merger Integration
Cap gemini business process transformation to deliver world class outcomesLoren Moss
Global enterprises face challenges in ensuring consistent best practices and execution across borders due to differences in culture, regulations, and resources. Business process transformation is often needed to maintain competitive advantages. Choosing a transformation partner with a proven methodology, best practices library, and industry experience can help drive successful transformation. The partner's methodology should assess processes, technology, locations, skills, and pricing to optimize operations and deliver world-class outcomes through a controlled implementation.
The document discusses key issues companies should focus on when selling or divesting parts of their business. It emphasizes that sell-side M&A capabilities are just as important as buy-side capabilities but are often less developed. Specifically, it recommends focusing on three additional areas when separating businesses: human resources issues to maintain key employees, strategic analysis to understand if separation creates value, and global separation issues given increased international operations. Addressing these complex HR, strategic, and international components can help maximize value and improve the sell-side transaction process.
With a fundamental shift in the CFO mission, the finance function has become a critical change agent across organizations. The role of financial leaders such as CFOs is evolving, from a traditional financial controller, to one that drives performance improvements across the organization.
This document provides an executive summary of a roadmap for implementing smarter workplaces that deliver bottom-line business impacts. Some key points:
- Cost savings are an initial driver but other benefits like increased productivity, staff satisfaction, and retention outweigh savings over the long-term. Reducing workspace ratios can save $1.95 million annually for a 5,000 sqm office.
- Companies find that improving work flexibility increases staff satisfaction and retention. Greater mobility and work-life balance helps attract and retain talent.
- Procter & Gamble and NCR measure the success of smarter workplaces through increased staff satisfaction, productivity, and work-life balance. NCR aims to increase virtual staff from 8
Business Models: Six recommendations to enable business model innovation in t...melnorman
Advances in technology have disrupted the creative marketplace. What customers value and will pay for has changed and companies who don’t evaluate their existing business models risk losing their relevance.
There is a lot of discussion around reinventing ‘business models’ and ‘strategy’ but there is a lack of clarity about what this means and even less about how to apply it.
So how does this impact the creative industries, which have undergone more change than most sectors over the last 10 years?
The part time Business Model Theme Champion role, funded by and on behalf of the Creative Industries KTN, focused on transferring current business model practice to the creative industries, using that to shape and inform business model innovation and examine how businesses can better articulate new and emergent business models.
This document is not meant as a scientific document or academic paper but a combination of a summary of my learnings from both my year’s tenure, as well as the thoughts and experiences from those who kindly attended workshops and roundtables or were consulted as experts or as leading companies in their field. My intention is to start a conversation around business model innovation in the creative and digital sectors and for the recommendations to be explored further.
This article discusses approaches that firms can take to manage change in today's turbulent business environment. Traditional change management approaches that rely on long-term planning are no longer effective given the speed of changes. The article outlines three conversational approaches that may be more suitable: polarity management, large group interventions, and big conversations. Polarity management addresses dilemmas in change efforts. Large group interventions involve stakeholders to rapidly plan for the future. Big conversations translate strategic plans into action. These conversational approaches help engage employees in change and develop an organization's ability to continuously adapt its plans.
What Is Organizational Structure1Identify the six element.docxphilipnelson29183
What Is Organizational Structure?
1
Identify the six elements of an organization’s structure.
An organizational structure defines how job tasks are formally divided, grouped, and coordinated. Managers need to address six key elements when they design their organization’s structure: work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization.2 Exhibit 15-1 presents each of these elements as answers to an important structural question, and the following sections describe them.
organizational structure
The way in which job tasks are formally divided, grouped, and coordinated.
Work Specialization
Early in the twentieth century, Henry Ford became rich by building automobiles on an assembly line. Every Ford worker was assigned a specific, repetitive task such as putting on the right front wheel or installing the right front door. By dividing jobs into small standardized tasks that could be performed over and over, Ford was able to produce a car every 10 seconds, using employees who had relatively limited skills.
Ford demonstrated that work can be performed more efficiently if employees are allowed to specialize. Today, we use the term work specialization, or division of labor, to describe the degree to which activities in the organization are divided into separate jobs. The essence of work specialization is to divide a job into a number of steps, each completed by a separate individual. In essence, individuals specialize in doing part of an activity rather than the entirety.
work specialization
The degree to which tasks in an organization are subdivided into separate jobs.
The Key Question The Answer Is Provided by
1. To what degree are activities subdivided Work into separate jobs? specialization
2. On what basis will jobs be grouped together? Departmentalization
3. To whom do individuals and groups report? Chain of command
4. How many individuals can a manager efficiently and effectively direct? Span of control
5. Where does decision-making authority lie? Centralization and decentralization
6. To what degree will there be rules and regulations to direct employees and managers? Formalization
Exhibit 15-1
Key Design Questions and Answers for Designing the Proper Organizational Structure
By the late 1940s, most manufacturing jobs in industrialized countries featured high work specialization. Because not all employees in an organization have the same skills, management saw specialization as a means of making the most efficient use of its employees’ skills and even successfully improving them through repetition. Less time is spent in changing tasks, putting away tools and equipment from a prior step, and getting ready for another. Equally important, it’s easier and less costly to find and train workers to do specific and repetitive tasks, especially in highly sophisticated and complex operations. Could Cessna produce one Citation jet a year if one perso.
This article is based on Booz & Company's long-standing work on organizational DNA. It describes how to select the right mix of organizational design elements--both formal structures and informal aspects of organizational culture--to advance your company's strategy.
Digital transformation and sustained shareholder supportGerrard Schmid
I recently collaborated with Craig Hapelt and Kilian Berz at BCG on the link between digital transformation and sustained shareholder support. A key topic for public companies as they wrestle with the implications of transforming their business models.
Pleased that our transformation journey at D+H formed a backdrop for this work. Hats off to all my former colleagues that helped us on that journey.
Global transformation from the inside out - Optimizing the entire ecosystemCasey Lucas
1) The document discusses how companies can transform into globally integrated enterprises (GIEs) to better address challenges in today's global economy. GIEs optimize global operations, apply analytics for predictive insights, and accelerate agility through innovation.
2) High performing GIEs integrate operations more across functions like IT, HR, supply chain, and finance. They also invest heavily in IT to enable transformation.
3) The document provides IBM's perspective on transforming into a GIE based on their experience, and surveys over 1,000 executives about global transformation strategies.
8 ème édition du rapport Creating People Advantage réalisée par le Boston Consulting Group (BCG) et en partenariat avec la World Federation of People (WFPMA)
For this assignment, students will need to observe the activities th.docxalfred4lewis58146
For this assignment, students will need to observe the activities that take place in a courtroom setting. Find a video on YouTube... Pay attention to the courtroom actors including the judge, jury, attorneys, and defendant. Complete a one page reflection of your experience. Provide details about the case/cases you heard and note if anything surprised you during your observation.
Use APA format for this assignment.
.
For this assignment, select a human service organization from .docxalfred4lewis58146
For this assignment, select a human service organization from a public, nonprofit, or government sector that you are familiar with, or one that you find interesting. You will use this organization to complete all of the course assignments. You must be able to access information about the organization’s governance, financial sources and practices, mission, population served, and its political and social landscape. Review all the assignments now to verify the types of information you will need about the organization in order to complete them.
The following list provides examples of acceptable types of organizations. You can select an organization of the types included on this list or propose another type of organization to your instructor. The organization must provide human service program services. The selected organization will be included in all your assignments, so you will look at leadership and collaboration practices for that organization through several areas of focus.
Possible Organization Types
City, county, or state human services or mental health programs.
State hospitals (Western State Hospital, Milwaukee County Hospital, or another state or county hospital in your area).
School-based human services or case management programs.
Private mental health organizations.
Employee assistance programs.
For-profit hospital or health care organizations (Humana, Kaiser-Permanente, Aurora, etcetera).
Catholic community services.
Lutheran Social Services.
.
More Related Content
Similar to Organizing for an emerging worldThe structures, processes,.docx
Definitions And Overview Of Business Performance ManagementSamantha Randall
Here are a few key points that could be made to strengthen the case for improving the business's performance management activities:
- The current approach is negatively impacting productivity, quality, costs and the bottom line. Financial performance is suffering due to delays, rework, higher training costs and loss of sales/market share to competitors.
- Employee engagement and morale are low. There is conflict between new and old employees. High turnover is disruptive and expensive. Improving performance management could help align employees behind common goals and foster a more positive work culture.
- Customers are receiving subpar service due to errors and delays. The business risks further damage to its reputation and loss of loyal customers. Effective performance management could help ensure quality
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Citation
Title:
The global company's challenge.
Authors:
Dewhurst, Martin1
Harris, Jonathan2
Heywood, Suzanne
Aquila, Kate
Source:
McKinsey Quarterly. 2012, Issue 3, p76-80. 5p.
Document Type:
Article
Subject Terms:
*International business enterprises
*Emerging markets
*Economies of scale
*Contracting out
*Risk management in business
*Business models
*Executives
*Financial leverage
*Globalization
*Research & development
Developing countries
Company/Entity:
International Monetary Fund DUNS Number: 069275188
Aditya Birla Management Corp. Pvt. Ltd.
International Business Machines Corp. DUNS Number: 001368083 Ticker: IBM
NAICS/Industry Codes:
919110 International and other extra-territorial public administration
928120 International Affairs
541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
541711 Research and Development in Biotechnology
Abstract:
The article focuses on the management of risks, costs, and strategies by international businesses in emerging markets. It states that the International Monetary Fund reported that the ten fastest-growing economies after 2012 will all be in developing countries. It mentions that technology company International Business Machines expects by 2015 to earn 30 percent of revenues in emerging markets compared to 17 percent in 2009, while Indian multinational conglomerate Aditya Birla Group earns over half of its revenue outside India and has operations in 40 nations. It talks about the benefit of economies of scale in shared services enjoyed by large global companies and comments that the ability to outsource business services and manufacturing is benefiting local businesses.
Author Affiliations:
1director in McKinsey's London office
2director in the New York office
Full Text Word Count:
1632
ISSN:
0047-5394
Accession Number:
78031780
Database:
Business Source Complete
PlumPrintNo Results Found
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Citation
Title:
The global company's challenge.
Authors:
Dewhurst, Martin1
Harris, Jonathan2
Heywood, Suzanne
Aquila, Kate
Source:
McKinsey Quarterly. 2012, Issue 3, p76-80. 5p.
Document Type:
Article
Subject Terms:
*International business enterprises
*Emerging markets
*Economies of scale
*Contracting out
*Risk management in business
*Business models
*Executives
*Financial leverage
*Globalization
*Research & development
Developing countries
Company/Entity:
International Monetary Fund DUNS Number: 069275188
Aditya Birla Management Corp. Pvt. Ltd.
International Business Machines Corp. DUNS Number: 001368083 Ticker: IBM
NAICS/Industry Codes:
919110 International and other extra-territorial public administration
928120 International Affairs
541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
541711 Research and Development in Biotechnology
Abstract:
The article focuses on the management of risks, costs, and strategies by international businesses in emerging markets. It states that the International Monetary Fund reported that the ten fastest-growing economies after 2012 will all be in developing countries. It mentions that technology company International Business Machines expects by 2015 to earn 30 percent of revenues in emerging markets compared to 17 percent in 2009, while Indian multinational conglomerate Aditya Birla Group earns over half of its revenue outside India and has operations in 40 nations. It talks about the benefit of economies of scale in shared services enjoyed by large global companies and comments that the ability to outsource business services and manufacturing is benefiting local businesses.
Author Affiliations:
1director in McKinsey's London office
2director in the New York office
Full Text Word Count:
1632
ISSN:
0047-5394
Accession Number:
78031780
Database:
Business Source Complete
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The global company's challenge
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Organizational Change Management: A Make or Break Capability for Digital SuccessCognizant
To realize the full benefits of digital transformation programs, businesses must manage the impact of digital change on their operational structure, culture and employees.
This document discusses organizational design in public and private organizations. It will examine the differences and similarities between how public and private organizations make design decisions. It will consider how these sectors can learn from each other regarding design. The document will also investigate how strategic planning informs design changes and how organizations approach managing the design process to ensure buy-in. Key topics that will be covered include organizational design models, motivations for design decisions, and ensuring roles and collaboration are considered alongside structure.
The document outlines a three-step process for companies to identify and prioritize new market opportunities adjacent to their core business in order to accelerate growth. Step 1 involves gaining alignment on objectives, unique capabilities, and criteria. Step 2 uses secondary research to develop fact bases to screen and rank adjacencies. Step 3 performs in-depth assessments to determine the best adjacency to pursue. The process is designed to efficiently identify opportunities and allocate resources to the most promising ones.
This presentation explains what merger and acquisition is, How integration is important after merger and acquisition, how it is to be done, what can be the factors of failure, what is the role of an HR during integration and what strategies companies should follow for a successful Post Merger Integration
Cap gemini business process transformation to deliver world class outcomesLoren Moss
Global enterprises face challenges in ensuring consistent best practices and execution across borders due to differences in culture, regulations, and resources. Business process transformation is often needed to maintain competitive advantages. Choosing a transformation partner with a proven methodology, best practices library, and industry experience can help drive successful transformation. The partner's methodology should assess processes, technology, locations, skills, and pricing to optimize operations and deliver world-class outcomes through a controlled implementation.
The document discusses key issues companies should focus on when selling or divesting parts of their business. It emphasizes that sell-side M&A capabilities are just as important as buy-side capabilities but are often less developed. Specifically, it recommends focusing on three additional areas when separating businesses: human resources issues to maintain key employees, strategic analysis to understand if separation creates value, and global separation issues given increased international operations. Addressing these complex HR, strategic, and international components can help maximize value and improve the sell-side transaction process.
With a fundamental shift in the CFO mission, the finance function has become a critical change agent across organizations. The role of financial leaders such as CFOs is evolving, from a traditional financial controller, to one that drives performance improvements across the organization.
This document provides an executive summary of a roadmap for implementing smarter workplaces that deliver bottom-line business impacts. Some key points:
- Cost savings are an initial driver but other benefits like increased productivity, staff satisfaction, and retention outweigh savings over the long-term. Reducing workspace ratios can save $1.95 million annually for a 5,000 sqm office.
- Companies find that improving work flexibility increases staff satisfaction and retention. Greater mobility and work-life balance helps attract and retain talent.
- Procter & Gamble and NCR measure the success of smarter workplaces through increased staff satisfaction, productivity, and work-life balance. NCR aims to increase virtual staff from 8
Business Models: Six recommendations to enable business model innovation in t...melnorman
Advances in technology have disrupted the creative marketplace. What customers value and will pay for has changed and companies who don’t evaluate their existing business models risk losing their relevance.
There is a lot of discussion around reinventing ‘business models’ and ‘strategy’ but there is a lack of clarity about what this means and even less about how to apply it.
So how does this impact the creative industries, which have undergone more change than most sectors over the last 10 years?
The part time Business Model Theme Champion role, funded by and on behalf of the Creative Industries KTN, focused on transferring current business model practice to the creative industries, using that to shape and inform business model innovation and examine how businesses can better articulate new and emergent business models.
This document is not meant as a scientific document or academic paper but a combination of a summary of my learnings from both my year’s tenure, as well as the thoughts and experiences from those who kindly attended workshops and roundtables or were consulted as experts or as leading companies in their field. My intention is to start a conversation around business model innovation in the creative and digital sectors and for the recommendations to be explored further.
This article discusses approaches that firms can take to manage change in today's turbulent business environment. Traditional change management approaches that rely on long-term planning are no longer effective given the speed of changes. The article outlines three conversational approaches that may be more suitable: polarity management, large group interventions, and big conversations. Polarity management addresses dilemmas in change efforts. Large group interventions involve stakeholders to rapidly plan for the future. Big conversations translate strategic plans into action. These conversational approaches help engage employees in change and develop an organization's ability to continuously adapt its plans.
What Is Organizational Structure1Identify the six element.docxphilipnelson29183
What Is Organizational Structure?
1
Identify the six elements of an organization’s structure.
An organizational structure defines how job tasks are formally divided, grouped, and coordinated. Managers need to address six key elements when they design their organization’s structure: work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization.2 Exhibit 15-1 presents each of these elements as answers to an important structural question, and the following sections describe them.
organizational structure
The way in which job tasks are formally divided, grouped, and coordinated.
Work Specialization
Early in the twentieth century, Henry Ford became rich by building automobiles on an assembly line. Every Ford worker was assigned a specific, repetitive task such as putting on the right front wheel or installing the right front door. By dividing jobs into small standardized tasks that could be performed over and over, Ford was able to produce a car every 10 seconds, using employees who had relatively limited skills.
Ford demonstrated that work can be performed more efficiently if employees are allowed to specialize. Today, we use the term work specialization, or division of labor, to describe the degree to which activities in the organization are divided into separate jobs. The essence of work specialization is to divide a job into a number of steps, each completed by a separate individual. In essence, individuals specialize in doing part of an activity rather than the entirety.
work specialization
The degree to which tasks in an organization are subdivided into separate jobs.
The Key Question The Answer Is Provided by
1. To what degree are activities subdivided Work into separate jobs? specialization
2. On what basis will jobs be grouped together? Departmentalization
3. To whom do individuals and groups report? Chain of command
4. How many individuals can a manager efficiently and effectively direct? Span of control
5. Where does decision-making authority lie? Centralization and decentralization
6. To what degree will there be rules and regulations to direct employees and managers? Formalization
Exhibit 15-1
Key Design Questions and Answers for Designing the Proper Organizational Structure
By the late 1940s, most manufacturing jobs in industrialized countries featured high work specialization. Because not all employees in an organization have the same skills, management saw specialization as a means of making the most efficient use of its employees’ skills and even successfully improving them through repetition. Less time is spent in changing tasks, putting away tools and equipment from a prior step, and getting ready for another. Equally important, it’s easier and less costly to find and train workers to do specific and repetitive tasks, especially in highly sophisticated and complex operations. Could Cessna produce one Citation jet a year if one perso.
This article is based on Booz & Company's long-standing work on organizational DNA. It describes how to select the right mix of organizational design elements--both formal structures and informal aspects of organizational culture--to advance your company's strategy.
Digital transformation and sustained shareholder supportGerrard Schmid
I recently collaborated with Craig Hapelt and Kilian Berz at BCG on the link between digital transformation and sustained shareholder support. A key topic for public companies as they wrestle with the implications of transforming their business models.
Pleased that our transformation journey at D+H formed a backdrop for this work. Hats off to all my former colleagues that helped us on that journey.
Global transformation from the inside out - Optimizing the entire ecosystemCasey Lucas
1) The document discusses how companies can transform into globally integrated enterprises (GIEs) to better address challenges in today's global economy. GIEs optimize global operations, apply analytics for predictive insights, and accelerate agility through innovation.
2) High performing GIEs integrate operations more across functions like IT, HR, supply chain, and finance. They also invest heavily in IT to enable transformation.
3) The document provides IBM's perspective on transforming into a GIE based on their experience, and surveys over 1,000 executives about global transformation strategies.
8 ème édition du rapport Creating People Advantage réalisée par le Boston Consulting Group (BCG) et en partenariat avec la World Federation of People (WFPMA)
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Organizing for an emerging worldThe structures, processes,.docx
1. Organizing for an
emerging world
The structures, processes, and communications approaches of
many far-flung businesses have been stretched to the breaking
point.
Here are some ideas for relieving the strains.
The problem
Rising complexity is making
global organizations more difficult
to manage.
Why it matters
Organizational friction can hamper
growth, especially in emerging
markets; undermine strategic decision
making; and make it harder to
manage costs, people, and risks.
Toby Gibbs, Suzanne Heywood, and Leigh Weiss
What to do about it
2. Revisit the case for regional orga-
nizational layers and consider
grouping activities according to
nongeographic criteria, such
as growth goals.
Streamline processes without
standardizing more than is
necessary, force-fitting rigid
technology solutions, or creating
overly detailed rules.
Consider moving the corporate
center (or creating a “virtual head-
quarters”) closer to high-growth
markets, and ensure a constant flow
of talent between the business
units and the center.
Find out how and why people share
information, and then decide which
3. connections to drop, keep, or add.
J U N E 2 0 1 2
o r g a n i z a t i o n p r a c t i c e
2
As global organizations expand, they get more complicated
and difficult to manage. For evidence, look no further than the
inter-
views and surveys we recently conducted with 300 executives at
17 major global companies. Fewer than half of the respondents
believed
that their organizations’ structure created clear accountabilities,
and many suggested that globalization brings, as one put it,
“cumula-
tive degrees of complexity.”
However, our research and experience in the field suggest that
even
complex organizations can be improved to give employees
around
the world the mix of control, support, and autonomy they need
to do
4. their jobs well. What’s more, redesigning an organization to suit
its changing scale and scope can do much to address the
challenges
of managing strategy, costs, people, and risk on a global basis.
Our goal in this article isn’t to provide a definitive blueprint for
the
global organization of the future (there’s no such thing), but
rather
to offer multinationals fresh ideas on the critical organizational-
design questions facing them today: how to adjust structure to
sup-
port growth in emerging markets, how to find a productive
balance
between standardized global and diverse local processes, where
to locate the corporate center and what to do there, and how to
deploy
knowledge and skills effectively around the world by getting the
right people communicating with each other—and no one else.
Rethinking boundaries
Global organizations have long sought to realize scale benefits
by
centralizing activities that are similar across locations and
5. tailoring
to local markets any tasks that need to differ from country to
coun-
try. Today, as more and more companies shift their weight to
emerging
markets, boundaries between those activities are changing for
many organizations.
At some point, they will need to adapt their structures and
processes
to acknowledge this boundary shift, whose nature will vary
across
and within companies, depending on their industry, focus, and
history.
In one recent case, an international publishing company created
global “verticals” comprising people who work on content and
delivery
technology for similar publications around the world. But it was
3
careful to leave all sales and marketing operations in the hands
of
local country managers, because in publishing these activities
6. can succeed only if they are tailored to local markets. In the
case of
IBM in Asia, the company has globalized its business services
but
left the businesses local.
IBM’s experience in Asia
IBM’s vice president of global strategy for growth markets,
Michael
Cannon-Brookes, described to us the structural redesign of the
company. Shortly after the start of the new millennium, its
leaders
realized that having each country operation in Asia run a com-
plete suite of business services to support different product
brands
no longer made sense; there was simply too much duplication of
effort. In each country market, these leaders identified 11
services
with common features in functional areas: supply chain, legal,
communications, marketing, sales management, HR, and
finance.
Each function was assigned a global “owner” with the task of
consolidating and refining operations to support businesses in
7. the
region’s different countries. The company then assessed which
essential elements of each function to keep and which redundant
(or
potentially redundant) elements to eliminate.
From these assessments grew the “globally integrated enterprise
model,” which evolved into an entirely new structure for IBM’s
global
operations. “Instead of taking people to where the work is, you
take
work to where the people are,” says Cannon-Brookes. IBM
sought out
pools of competitive talent with the skills required to perform
each
service at different cost points. Then it built teams of specialists
geo-
graphically close to the relevant pool to meet the region’s needs
in
each service. So now, for instance, IBM’s growth market
operations
are served by HR specialists in Manila, accounts receivable are
processed in Shanghai, accounting is done in Kuala Lumpur,
procure-
8. ment in Shenzhen, and the customer service help desk is based
in
Brisbane. Globalizing functions that were previously country
based
has been a huge corporate-wide undertaking for IBM.
“This is a cultural transformation,” says Cannon-Brookes.
“Changing
organization charts can take a few mouse clicks. Changing busi-
ness processes can take months. Changing a culture and the way
employees adapt to new ways of working takes years.”
4
A complex calculus
To repeat, though, no company’s restructuring should be viewed
as a
blueprint for that of another. On the one hand, the importance of
regional layers seems to be growing for companies in sectors
such as
pharmaceuticals and consumer goods. Regional centers of excel-
lence in these sectors often are cost effective. Brand and
product
9. portfolios often differ significantly between regional outposts
and
the traditional core, and greater regional muscle can make it
easier
to pull local perspectives into global product-innovation efforts.
On the other hand, we’ve seen companies conclude that the
tradi-
tional role of their regional layers—as “span breakers” helping
distant corporate leaders to gather data and distill strategically
important information—is becoming obsolescent as information
technology makes analyzing, synthesizing, and exchanging
informa-
tion so much easier. Today’s faster data exchanges, along with
faster travel and video conferencing, make it feasible for some
organi-
zations to group their units by criteria other than physical
proximity—
for example, similar growth rates or strategies. (For more on
the role of technology in managing global organizations, see
sidebar,
“Technology as friend or foe?”)
That’s led some companies to reduce regional layers to teams of
10. ten
or fewer members. Those teams might focus on managing
people
strategy in a region or on gathering high-level business
intelligence
that feeds into regional-strategy setting—for example, spotting
regional, country, and competitive risks and opportunities.
Wafer-
thin regional layers have the added benefit of curbing “shadow”
functional structures (in HR, marketing, and so forth), which
tend
to sprout unplanned in larger regional organizations. Although
these structures are not clearly visible to the corporate center,
they
add considerable cost and complexity.
Process pointers
As IBM’s experience illustrates, executives evaluating the
struc-
ture of their companies will often be drawn into considering
which processes should be global or local. That’s sensible: in
our
survey of more than 300 executives at global companies, pro-
11. cesses emerged as one of the 3 weakest aspects of organization,
out
of 12 we explored. Some companies have far too many
processes—
nearly a third of the surveyed executives said that their
companies
5
would be more effective globally with fewer standard ones.
Some
companies, especially if they grew by M&A, don’t know how
many
processes they have or what those processes are. And, most
impor-
tant, few can distinguish standard processes that create value
from
those that don’t or can identify the value drivers of worthwhile
standard processes.
For managers grappling with these issues, here are some ideas
that
have proved valuable in practice:
• Don’t standardize more than is necessary. For example, busi-
12. nesses and regions should be allowed to choose their own
locally relevant key performance indicators to track, on top of
the four or five KPIs used in the global process for setting
annual targets.
• Fit technology to the process, not vice versa. Standard
screen-
based processes may ensure global compliance in an instant but
can lock in globalized costs, too. Before making huge invest-
ments in technology to standardize a process, businesses must
be sure they can realize the expected return.
• Prefer standard principles to detailed rules for local
processes.
For instance, to hire an assistant in a new location, managers
need only a set of global fair-hiring principles, not chapter and
verse on how to hire.
• Listen to voices from all the functions that are—or should
be—
involved in making a process better and make sure those people
can continue communicating with each other. Standard pro-
cesses, by themselves, are not enough to capture all of the
13. potential
value from a company’s global footprint: ongoing communi-
cation between people who influence and execute processes
helps
to capture more of it.
• Implement new processes from the top. Consultation on
design
is important, but business leaders may eventually need to
cut the talk and mandate a new process. Unfashionable
command-
and-control methods can be appropriate in this sphere because,
as one executive explained, “Locations aren’t nearly as different
as
they think they are.”
6
Inexpensive electronic and voice
communications, video-
conferencing, technology-enabled
workflows, and, most recently,
14. social-networking technologies have
transformed connectivity and
knowledge sharing within complex
global organizations. Aditya
Birla’s HR director, Santrupt Misra,
says, “Our use of ICT [informa-
tion and communications technology]
has really helped us become
global. For example, we acquired
Colombian Chemicals six
months ago, and the first thing we
established is . . . connectivity
between them and our locations
elsewhere so they have access
to our portal, our knowledge, our
e-learning, and every other support.”
The company puts out regular
live webcasts aimed at all employees
15. and their families. It also makes
all internal vacancies visible to all
employees, to foster the sense
of belonging to a community that is
local and global at the same time.
Similarly, IBM’s internal Beehive Web
site helps employees to connect
with peers they meet on interdepart-
mental projects or meetings,
to brainstorm for current and new
projects, and to approach
higher-ranking people they wouldn’t
normally have contact with
to share ideas and ask for advice.1
Yet fewer than one-third of the more
than 300 global executives we
surveyed and interviewed believed
that their companies were get-
16. ting the most out of information and
communications technology. For
all its benefits, it sometimes creates
challenges such as the following.
Exacerbating pressure. A senior
executive at one company’s
central site in China says he regularly
works a “second shift” on con-
ference calls when he should be
asleep—not good for him or the
company in the long term. Jesse Wu,
worldwide chairman of Johnson &
Johnson’s consumer group,
observes, “Many people in New
York like to have global calls
on a Friday morning, so they can get
everything clear before the week-
end. However, that’s Friday evening
17. Technology as friend or foe?
Lightening the corporate heart
Over the past decade, corporate centers have been slimming
down.
Many have shed their traditional roles of providing the business
units with shared backbone services. Similarly, some companies
have
found locations other than the corporate headquarters for
centers
of excellence on, among other things, innovation or customer
insights
and sometimes host them within one business for the benefit of
all. This leaves slim corporate centers free to focus on their
perennial
headquarters roles: upholding the organization’s values,
developing
7
in Asia, thus unnecessarily affecting
a colleague’s family life on the
other side of the world.” Company
18. leaders have to model the time
zone sensitivity on which a healthy
global organization depends.
Locking in complexity.
Computerized forms can instantly
standardize a process around
the world, but once that process
is locked in, technology can
make changing it complicated and
expensive. One global retailer,
for example, generated significant
value by standardizing supply
chain processes in its home market
and then adapted and extended
the system to its operations overseas.
Whenever overseas operations
wanted to tweak their local proce-
dures, a change to the global IT
19. system was involved, making such
small but necessary changes
very costly.
Elevating issues indiscrim-
inately. One leader of a global com-
pany based in an emerging
market notes: “With the growth of
ICT, we have become more
headquarters-centric. This hasn’t
been a deliberate policy; it’s just
that people in the distant territories
have found ICT an easy way to
kick the ball upstairs.”
While these are avoidable problems,
they underscore the fact that
technology is not a panacea for
companies facing organiza-
tional challenges. Rather, its creative
20. deployment should reinforce—
and be supported by—a company’s
organizational design.
corporate strategy, and managing the portfolio of businesses and
their individual performance in line with those values and
strategies.1
However, even a newly focused corporate center can struggle to
grasp just how diverse a company’s markets have become and
how
fast they are changing: one group based in the United States
accepted 2 percent growth targets from its local managers in
India
1 For more, see Joan M. DiMicco, et al.,
Research on the Use of Social Software
in the Workplace, Conference on
Computer Supported Cooperative Work
(CSCW), San Diego, California,
November 2008; and Karl Moore and
Peter Neely, “From social networks
to collaboration networks: The next
evolution of social media for business,”
Forbes.com, September 15, 2011.
1 For more on the role of the corporate center in establishing
strategic direction, see
Stephen Hall, Bill Huyett, and Tim Koller, “The power of an
independent corporate
21. center,” mckinseyquarterly.com, March 2012.
8
because the US market was growing by only 1 percent a year.
But
the Indian economy was growing much faster, so precious
market
share was lost.
Corporate centers are likely to make better strategic calls if they
move
closer to the action. Locating headquarters in a growth market
also sends a clear signal about company priorities to current and
future
employees, as well as to investors, customers, and other
external
stakeholders. However, a lot of corporate centers can’t or won’t
move
in their entirety, for reasons of history, convenience, or legal
constraints. So we see a growing number of companies creating
a
global “virtual headquarters,” in which vision-setting and -
coordinating
22. activities and centers of excellence are placed in different areas
around the world: global procurement may be located in a
geography
quite different from that of, say, global talent. Thus companies
can
move headquarters activities closer to high-priority markets
without
having to shut up the home headquarters.
For instance, ABB has shifted the global base of its robotics
busi-
ness from Detroit to Shanghai, where it has built a robotics
R&D center
and production line in response to expected demand for robots
in
Asia. Other firms are going for a split center, with a site in a
mature
market and another in an emerging one. US technology company
Dell, for instance, has set up a functional headquarters in
Singapore
in pursuit of greater financial, operational, and tax efficiency.
The
US oil and gas company Halliburton created a second
headquarters,
23. in Dubai, to speed up decision making by putting it closer to
major customers.
Who should staff the lighter corporate center? To cross-
pollinate
ideas and knowledge, a headquarters ideally needs to attract
but not retain talent. Picture it as the beating heart of the
organization,
pumping high-potential staff to and from the business units
and replenishing each person with the oxygen of learning. Given
the
right HR mechanisms, a headquarters could do without any
permanent staff except the CEO and his or her direct reports;
other
executives could have fixed-term appointments and then return
to a business unit or function. The diversity of the corporate
center’s
constant flow of staff would then naturally reflect a company’s
international reach and strengths.
9
Coordinating communication
24. Having the right structures and processes to enable growth and
reduce complexity is a triumph in itself. But even the best-
structured
organization with the most carefully designed processes may
falter
without the right linkages between them. By the same token,
two-
thirds of the executives at global companies we recently
surveyed
said that their ability to create internal links was a source of
strength.
To get the best from modern communications and a global
network
of contacts, managers should focus their communications, both
regular and intermittent, on contacts that really matter to their
jobs.
Leaders can help by making it easier for their people to forge
the
kind of Web-based connections and communities of interest that
spread knowledge quickly. But they also must protect managers
from the need to spend a lot of time in conversations and
meetings
25. where agendas and decision rights are so hazy that they can’t
get
their jobs done.
Taking stock
Understanding the number and value of the communications that
managers participate in is a first step in finding the sweet spot.
A variety of tools are available to help. They include interviews
with
employees; social-network analyses, which map the frequency
and effectiveness of communications; and employee surveys
that
review connections among a company’s major business, func-
tional, and geographic units to find out why they’re sharing
information,
the importance of the information they get to meeting their
performance or strategic goals, and how effectively they share
it.
Leaders of a global oil and gas company, for example,
understood
that operations personnel weren’t sharing best practices well,
because
a quick review showed that the company had dozens of ways to
26. operate a given rig. Managers also knew that workers facing
problems
in the field (such as equipment breakages or uncertainty about
the
local terrain) didn’t know how to get expert help quickly and
effectively.
A social-network analysis of how information flowed between
field
workers and technical experts identified three problems. First,
field
workers tended to reach out only to those technical experts with
whom they had strong personal relationships. Also, experts did
not
reach out unasked to field workers to share best practices.
Finally,
only when staff moved between sites—as when a group went
from
10
Angola to the Gulf of Mexico—did field workers from different
sites
share best practices among themselves.
Strengthening the right connections
27. Once people understand the number and nature of their
connections
and communications, they can decide which to drop, keep, or
add. In companies where a lot of people seem to lose time on
too many
linkages, the leaders’ reflex response is often to clarify links by
changing the structure—for example, adding reporting lines or
new
dimensions to the organizational matrix. But these make the
organization more complex and costly to manage; dual reporting
lines will almost certainly double an executive’s administrative
burden, to take only the most obvious example.
Better solutions can come from considering a wider range of
linkage
mechanisms, their different strategic purposes, and what must
be in place to make them work. For example, coaching or
mentoring
links transfer knowledge across an organization and build future
leaders. They require strong, personal, and frequent interactions
based
on trust. Other knowledge transfer connections, such as those
for
28. sharing documents, can be weaker, impersonal, and less
frequent.
Although these kinds of relationships deliver important gains,
they
do not have to be formally enshrined in a structure or process.
Social-network analysis at a major oil and gas company
Before After
Gulf of Mexico NigeriaBrazil Saudi ArabiaAngola Canada
United Kingdom
One oil company used a social-network analysis to target
improved
communication between field workers and technical experts.
Web 2012
Org Design
Exhibit 1 of 1
11
If people have too few contacts (as at the oil company) or
contacts
in the wrong places, managers with a particular area of
responsibility
will have to identify who needs knowledge in that area, who has
29. it,
and how best to connect them. One way companies can foster
strong
personal ties is to designate someone to nurture them until they
flourish unaided. When researchers analyzed social networks
and
e-mails among teams developing aerodynamic components for
Formula 1 racing cars, they found that teams that designated
some-
one to keep in touch with peers working on related products
across
geographies were 20 percent more productive than teams whose
man-
agers interacted less often.2
The oil company above transferred some field workers to peer
teams
elsewhere. That move forged global connections and expanded
the collective expertise on which each field worker could draw.
New
networks blossomed (exhibit) and quickly showed results:
within
a year, productivity rose by 10 percent, while costs related to
poor
30. quality fell by two-thirds.
Structure, processes, and linkages are interrelated: it’s easier to
avoid
duplication in organizational structures when a company gets
the
balance right among global, regional, and local processes—and
vice versa. Clear structures and processes also clarify roles,
helping
to focus communications, while structure and process problems
can undermine the effectiveness of managers’ global networks
and
communications. Focusing on some of the points where
structure,
processes, and communications intersect, and engaging all the
stake-
holders involved to work on those critical junctions, can release
benefits that ripple across organizations.
The authors would like to acknowledge the contributions of
Gregor Jost and
Roni Katz to the development of this article.
Toby Gibbs and Suzanne Heywood are principals in McKinsey’s
London
office; Leigh Weiss is a senior expert in the Boston office.