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Structure of global organisation.pptx
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- 2. Meaning • A company'sfunctions, teams, and personnel are outlined in a hierarchical framework called the organisational structure. • An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. These activities can include rules, roles, and responsibilities. • The organizational structure also determines how information flows between levels within the company. • A structure of formal authority and responsibility is created.
- 3. Factors influencing structureof global organisation • Mode of Entry • External Environment • Overall Objectives • Nature of Business • Organisational climate • Management Style • Size of an Enterprise • Technology
- 4. Types of GlobalOrganisational Structure Global Functional Global Product Division Global Area Strategic Business unit Global Matrix Global Network
- 5. Global functional structure •In global functional structure there is worldwide centralization of decision making, coordination and control in the key functional activities such as R& D, operations and marketing • All strategic and operational decisions are made at headquater level. Subsidaries in host countries are required to comply with local laws • the functional manager within the subsidiaries take instructions from headquarters • This structure is apporopirate for business units of multi level business corporations operating in single business environment with strong demand for global integration and coordination
- 6. Corporate Headquaters Global operations Subsidary I Subsidary II GlobalR& D Subsidary I Subsidary II Global marketing Subsidary I Subsidary II
- 7. Advantages Centralisation leads tocoherent policies and decisions Specialisation leading to economies of scale Duplication of effort is avoided Rapid transfer of knowhow
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- 9. Global Product Division •World wide responsibility for specific product group is assigned to separate operating divisions within the company • Ex: a company dealing in consumer products may have separate division for laundary products, personal care products, • the divisional head is given the line authority and responsibility for worldwide management of functions such as marketing , finance • The product division has to function within overall corporate plan and strategy • The top management mantains control through budegetory allocation and approval for certain vital decisions
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- 11. Advantages Manage diversify Products Coordination between Functional areas Desion makingis fast Responsibility is Fixed Production Cost can be reduced
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- 13. Global Area Structue •Regional headquaters are established in different parts of the world’ • Each regional headquater is responsible for all product sold and distributed • Head of each division is given line authority and responsibility over all affilates in the region.
- 14. Chief Executive officer President North American Operations Vice–President United State Operations Vice President Canada Operations Vice President Mexico operations President Latin American Operations President European Operations President Asian Operations
- 15. Advantages Local Needs Responds quickly ResonsibilityFirm can adapt varying political and legal systems
- 16. Disadvantages Duplication of facilitiesand Personnel Cost may rise due to lack Coordination Uniformity of quality Consistency
- 17. Strategic Business Unit •SBU is grouping of related business which have some strategic elements in common. • The common elements may be closely related to strategic mission a common need to complete globally, a common set of competitors, technology. • the SBU heads are assigned the authority and responsibility for the management of SBUs. • They report to chief executives
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- 19. Advantages • Managerial Burdenof corporate head reduce. • Better coordination • Corporate resources can be allocated Disadvantages • Corporate headquarters may become distant • Conflict • Difficulty to understand
- 20. Global Matrix structure •It is a hybrid design as it involves combinantion of functional and divisional structure. Some department are organized on functional basis so that employyes who perform similar task can be grouped together. Others are assigned tto various sub divisions • Global functional Structure + Global product/ Global Area Structure • The foreign affiliates report simauntaneously to more than one divisional headquters.
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- 23. Respond to environmentalfactors Movement of info Flexibility Motivation and Job Satisfaction Increases Project manager gain experience in general management functions
- 24. Disadvantages Unity of Command Lackof accountability Time in meeting Difficulty to maintain consistency
- 25. Global Network structure •It combines elements of functional, product and area structure • At the center there is Nodal unit responsible for coordinating information relating to functional, product and areas. • Different product lines adopt different structures’
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- 27. Advantages • Global competitiveness •Flexibility and motivation is high • The headquater team can persue distinct competency in virtualally market situation Disadvantages • Outstanding negotiation and managerial skills • Lack of hands on control by the headquater team. • Employees have little loyality