Article Review and Presentation
tome 83
chapter_141.pptxInternational Business, 8th Edition
Griffin & Pustay
Chapter 14-1
1
Learning Objectives
Define and discuss the nature of international organization design, and identify and describe the initial influence of international business activity on organization design
Identify and describe five advanced forms of international organization design and discuss hybrid global designs
Identify and describe key related issues in global organization design
Explain the general purpose of control and the levels of control in international business
Describe how international firms manage the control function
Chapter 14-2
2
International Organization Design
Chapter 14-3
Also known as designing organization structure, is the overall pattern of structural components and configurations used to manage the total organization.
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Allocate Organizational Resources
Assign Tasks
Provide Information
Collects and Transmits Information
Organization Design
Changes of Organization Design As the Firm Expands Internationally
Chapter 14-4
Global
Organization
Design
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Corollary Approach
Export Department
International Division
Global Organization Designs Integration of Knowledge
Chapter 14-5
5
Product Knowledge
Functional Knowledge
Area Knowledge
Integration
Global Organization Designs Common Forms
Functional structure
Divisional structure
Product Design
Area Design
Customer Design
Matrix structure
Chapter 14-6
Corporate
Office
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Global Functional Design Advantages and Disadvantages
Advantages
Transfer Expertise
Centralize Control
Focus on Functions
Disadvantages
Limited Products or Customers
Difficult to Coordinate
Chapter 14-7
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Divisional Structure: Global Product Design Advantages and Disadvantages
Advantages
Expertise
Efficiencies
Global Marketing
Chapter 14-8
Related
Products
M-Form (Multidivisional)
Unrelated
Products
H-Form (Holding)
Disadvantages
Expensive Duplication
Knowledge Development
Coordination Levels
Corporate Learning
Two forms
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Divisional Structure: Global Area Design Advantages and Disadvantages
Advantages
Brand-name reputation
Expertise about the local market
Disadvantages
May sacrifice cost efficiencies
May slow diffusion of technology
Results in duplication of resources
Raises costs of coordination
Chapter 14-9
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Divisional Structure: Global Customer Design Strengths and Weaknesses
Strengths
Serve different customers or customer groups
Focus on the needs of each customer group/segment
Weaknesses
Duplication of efforts
Coordination issues
Chapter 14-10
10
Global Matrix Design
Chapter 14-11
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Global Matrix Design Advantages and Disadvantages
Advantages
Organizational Flexibility
Coordination and Communication
Disadvantages
Limited use in firm with few products
Involves more than one manager
Creates a paradox in authority
Tends to promote compromises
Chapter 14-12
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Related Issues in Global Organization Design Centralization versus Decentralization
Chapter 14-13
| Decision Making Focus | Local Market Response | Overall Needs of the Firm |
| Corporate Headquarters | Lower | Higher |
| Local Subsidiary | Higher | Lower |
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Related Issues in Global Organization Design Coordination in the Global Organization
Organizational Hierarchy
Rules and Procedures
Ad Hoc Coordination Techniques
Informal Coordination Mechanisms
Chapter 14-14
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Related Issues in Global Organization Design The Control Function in International Business
Chapter 14-15
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Related Issues in Global Organization Design Establishing International Control Systems
Chapter 14-16
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Review Questions
How does organizational design change as the firm expands internationally?
What is the global product design?
What is the global area design?
What is the global functional design?
What is the global customer design?
What is the global matrix design?
What are the three levels of control in international business?
What are the four basic steps in establishing an international control system?
Chapter 14-17
