ORGANISATION STRUCTURE 8-1
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