ORGANISATION STRUCTURE 8-1. Opening Profile: Samsung Electronics Recognizes to Fight Downturn Badly hit by the global economic downturn Implemented a.

ORGANISATION STRUCTURE

8-1

Opening Profile: Samsung Electronics Recognizes to Fight

Downturn

Opening Profile: Samsung Electronics Recognizes to Fight

Downturn Badly hit by the global economic

downturn Implemented a radical

reorganization in 2009 Consolidating business

operations into two operating divisions

Replaced the heads of five of its eight overseas operations

Badly hit by the global economic downturn

Implemented a radical reorganization in 2009

Consolidating business operations into two operating divisions

Replaced the heads of five of its eight overseas operations

8-2

Organizational StructureOrganizational Structure

8-3

Evolution and Change in MNC Organizational Structures

Evolution and Change in MNC Organizational Structures

Structural evolution/stage modelAlcoa

Created smaller unitsLinked geographically dispersed, but

similar businesses (e.g., Brazil and Australia)

Structural evolution/stage modelAlcoa

Created smaller unitsLinked geographically dispersed, but

similar businesses (e.g., Brazil and Australia)

8-4

Evolution and Change in MNC Organizational Structures

Evolution and Change in MNC Organizational Structures

8-5

Domestic Structure Plus Foreign Subsidiary

Domestic Structure Plus Foreign Subsidiary

8-6

Integrated Global StructuresIntegrated Global Structures

International Division Global Functional Structure

8-7

Organized along functional, product, or geographic lines

IBM World Trade

Pepsi Cola International

Organized along functional, product, or geographic lines

IBM World Trade

Pepsi Cola International

Designed on the basis of the company’s functions

Allows for functional specialization and economies of scale

Designed on the basis of the company’s functions

Allows for functional specialization and economies of scale

Integrated Global Structures:Global Product (Divisional)

Structure

Integrated Global Structures:Global Product (Divisional)

Structure

8-8

Integrated Global Structures:Global Geographic (Area)

Structure

Integrated Global Structures:Global Geographic (Area)

Structure

8-9

Organizing for GlobalizationOrganizing for Globalization

8-10

Organizing for GlobalizationOrganizing for Globalization

8-11

Organizing for GlobalizationOrganizing for Globalization

8-12

Management Focus: Proctor & Gamble’s “Think Globally—Act

Locally” Structure

Management Focus: Proctor & Gamble’s “Think Globally—Act

Locally” StructureP&G’s Global/Local

StructureP&G’s Global/Local

StructurePhilosophy

8-13

Global business units

Market Development Organizations (MDO)

Global Business Services (GBS)

Corporate functions

Global business units

Market Development Organizations (MDO)

Global Business Services (GBS)

Corporate functions

Think globally

Act locally

Enabling P&G to win with customers and consumers

Be the smartest/best

Think globally

Act locally

Enabling P&G to win with customers and consumers

Be the smartest/best

Interorganizational NetworksInterorganizational Networks

8-14

Global E-Corporation Network Structure

Global E-Corporation Network Structure

8-15

EXHIBIT 8-6 The Global E-Corporation Network Structure

Transnational Corporation (TNC)

Network Structure

Transnational Corporation (TNC)

Network Structure

8-16

EXHIBIT 8-7 Dell’s Value Web Model

Matrix Structure and Transnational Company:

Coordination and Control System

Matrix Structure and Transnational Company:

Coordination and Control System Attempts to combine:

The capabilities and resources of a multinational corporation

The economies of scale of a global corporation

The local responsiveness of a domestic company

The ability to transfer technology efficiently typically of the international structure

Attempts to combine: The capabilities and resources of a

multinational corporation The economies of scale of a global

corporation The local responsiveness of a

domestic company The ability to transfer technology

efficiently typically of the international structure

8-17

Choice of Organizational FormChoice of Organizational Form

8-18

EXHIBIT 8-8 Organizational Alternatives and Development for Global Companies

Organizational Change and Design

Needed When:

Organizational Change and Design

Needed When:

8-19

Locus of Decision Making in an International Organization

Locus of Decision Making in an International Organization

8-20

EXHIBIT 8-11 Locus of Decision Making in an International Organization

Control Systems for Global Operations

Control Systems for Global Operations

Direct Coordinating Mechanism

Indirect Coordinating Mechanism

Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 8-21

McDonald’s in MoscowProblem: quality

controlSolution: built

processing plant in Moscow and provided managerial training

Other options: visits by head-office personnel

McDonald’s in MoscowProblem: quality

controlSolution: built

processing plant in Moscow and provided managerial training

Other options: visits by head-office personnel

Examples: sales quotas, budgets, and financial tools and reports

Three financial statementsOne for accounting

standards in host country

One for the standards in the home country

One for consolidation

Examples: sales quotas, budgets, and financial tools and reports

Three financial statementsOne for accounting

standards in host country

One for the standards in the home country

One for consolidation

Managing Effective Monitoring Systems

Managing Effective Monitoring Systems

8-22