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Design Organiza,ons for the Interna,onal Environment

©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Organiza(on Theory and Design Twel%h Edi+on Richard L. Da%

Entering The Global Arena

•  More companies are doing business globally •  Companies need top leaders who have a global outlook

•  Advancements in technology and world communica(ons have changed the compe((ve landscape

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©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied o2r duplicated, or posted to a publicly accessible website, in whole or in part.

Mo+va+ons for Global Expansion

Mo,va,ons for Global Expansion: •  Economies of Scale •  Economies of Scope •  Low-Cost Produc+on Factors

Economic, technological, and compe11ve forces have combined to push companies

from a domes1c to a global focus

3 ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Global Economy as Reflected in the Fortune Global 500

©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Stages of Interna+onal Evolu+on

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©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Global Expansion ─ Interna+onal Alliances and Acquisi+ons

•  Licensing – allowing another firm to market your brands

•  Joint Ventures – separate en+ty of two or more firms

•  Acquisi1ons – offer greater control than joint ventures

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©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Challenges of Global Design

©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Leading Mul+na+onals and Selected Countries 2010

©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Examples of Trickle-Up Innova+on

©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Strategies for Global vs. Local Opportuni+es

•  Global standardiza+on versus local responsiveness – Globaliza+on or mul+domes+c strategy

•  Globaliza1on strategy - products are standardized throughout the world

•  Mul1domes1c strategy - compe++on is handled in each country independently

10 ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Fi]ng Organiza+on Structure to Interna+onal Advantages

©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Global Organiza+on Structure

ü Interna+onal Division ü Global Product Division

ü Global Geographic Division

ü Global Matrix Structure

12 ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Domes+c Hybrid Structure with Interna+onal Division

©201713 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Par+al Global Product Structure

14 ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Global Geographic Structure

©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Global Matrix Structure

16 ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Global Coordina+on Mechanisms

ü Global Teams

ü Headquarters Planning

ü Expanded Coordina+on Roles

17 ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Benefits of Collabora+on

→  Cost Savings →  Be`er Decision Making

→  Greater Revenue

→  Increased Innova+on

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The Transna+onal Model of Organiza+on

•  Advanced interna+onal organiza+on to deal with mul+ple, interrelated, complex issues

•  Theory is based on interdependence

•  Useful for large, mul+na+onal companies with subsidiaries

•  Create an integrated network of individual opera+ons that are linked together

•  Not an organiza+onal chart; it is a managerial state of mind

19 ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Interna+onal Organiza+onal

Units

©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Transna+onal Organiza+ons

•  Assets and resources are dispersed worldwide •  Structures are flexible and ever-changing •  Subsidiary managers ini+ate strategy and innova+ons that become strategy for the whole organiza+on

•  Corporate culture, shared vision, and management style guide the organiza+on

21 ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Design Elements v Managers must design organiza+ons for complex interna+onal coordina+on

v Organiza+ons’ interna+onal strategies and structures evolve v There are diverse op+ons for specific interna+onal strategies

22 ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Design Elements

vThere are a variety of challenges for global organiza+ons vDiverse na+onal and cultural values influence an organiza+on’s approach vCompanies opera+ng globally require broad coordina+on

©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23