Organization of the Organization of the multinational firm multinational firm Hedl Maria Hedl Maria Eschbacher Claudia Eschbacher Claudia
Mar 21, 2016
Organization of the Organization of the multinational firmmultinational firm
Hedl MariaHedl MariaEschbacher ClaudiaEschbacher Claudia
AgendaAgenda
Organizational structures Organizational structures (Perlmutter)(Perlmutter)EthnocentrismEthnocentrismPolycentrismPolycentrismGeocentrismGeocentrism
Stages of international development Stages of international development (Daft)(Daft)Matrix structure vs. Heterarchy Matrix structure vs. Heterarchy (Hedlund)(Hedlund)
The home based MNC The home based MNC (Porter, Sölvell, Zander)(Porter, Sölvell, Zander)
Organizational structures Organizational structures (Perlmutter)(Perlmutter)
EthnocentrismEthnocentrism
Type of interdependenceType of interdependence Sequential Sequential
Control styleControl style HQ-derivedHQ-derived
Strategic role of subsidiaryStrategic role of subsidiary Implement local strategyImplement local strategy
Recruitment and rotationRecruitment and rotation Home-country managers, much rotationHome-country managers, much rotation
Organizational structures Organizational structures (Perlmutter)(Perlmutter)
PolycentrismPolycentrism
Type of interdependenceType of interdependence PooledPooled
Control styleControl style CalculativeCalculative
Strategic role of subsidiaryStrategic role of subsidiary Formulate & implement local strategyFormulate & implement local strategy
Recruitment and rotationRecruitment and rotation Local managers, little rotationLocal managers, little rotation
Organizational structures Organizational structures (Perlmutter)(Perlmutter)
GeocentrismGeocentrism
Type of interdependenceType of interdependence System of central and reciprocalSystem of central and reciprocal
Control styleControl style Normative, coerciveNormative, coercive
Strategic role of subsidiaryStrategic role of subsidiary Implement & adapt to global strategyImplement & adapt to global strategy
Recruitment and rotationRecruitment and rotation Mixed, much rotationMixed, much rotation
Difficulties of geocentric MNCsDifficulties of geocentric MNCs
Differences between nations and regionsDifferences between nations and regionsCultural differencesCultural differencesSizeSizeSkilled managersSkilled managersSpecialization of subsidiariesSpecialization of subsidiariesNo adaption to local marketsNo adaption to local markets
Stages of international Stages of international development development (Daft)(Daft)
Domestic stageDomestic stage
International stageInternational stage
Multinational stageMultinational stage
Global stageGlobal stage
Model for global vs. local Model for global vs. local opportunitiesopportunities
Globalization strategyGlobalization strategy means that product means that product design and advertising strategy are design and advertising strategy are standardized throughout the world.standardized throughout the world.
Multidomestic strategyMultidomestic strategy means that means that competition in each country is handled competition in each country is handled independently of competition in other independently of competition in other countries.countries.
GlobalProduct Structure
GlobalGeographic
Structure
International Division
Heterarchy
Global Matrix
Structure
Development of
Globalization Strategy
Development of Multidomestic
Strategy
Model for global vs. local opportunitiesModel for global vs. local opportunities
International divisionInternational division
CEO
HR Finance R & D Int. Division
Europe
Mideast
Brazil
Staff
Global Product StrucutreGlobal Product Strucutre
Chairman
Law Engineering President Finance International
Global Automobile Components
GlobalIndustrial
Group
GlobalInstrumentsProduction
GlobalTruck
Components
Global Geographic DivisionGlobal Geographic Division
CEO
Pacific Division
European Division
Latin American Division
Corporate Staff
Long Term Planning
ProductCoordination
Global Matrix StructureGlobal Matrix Structure
GermanyGermany NorwayNorway SpainSpain
TransportationTransportation
IndustryIndustry
Power Transf.Power Transf.
International Excecutive Committee
Business
Sectors
Country Managers
Local Companies
Global Heterarchy Global Heterarchy (Hedlund)(Hedlund)
large transnational firmslarge transnational firms
whole world as their playing fieldwhole world as their playing field
no single country baseno single country base
local and global advantageslocal and global advantages
complex multidimensional structurecomplex multidimensional structure
Global Heterarchy Global Heterarchy (Hedlund)(Hedlund)
Differences from Matrix StructureDifferences from Matrix Structure
Many centresMany centres
Stratic role for MNC of subsidiary managersStratic role for MNC of subsidiary managers
Different kinds of centresDifferent kinds of centres
Coordination through corporate cultureCoordination through corporate culture
Global Heterarchy Global Heterarchy (Hedlund)(Hedlund)
Differences from Matrix StructureDifferences from Matrix Structure
Degree of coupling between unitsDegree of coupling between units
Holographic organizationHolographic organization
„„firm as a brain“ rather than „brain of the firm“firm as a brain“ rather than „brain of the firm“
CoalitionsCoalitions
Managers have authorityManagers have authority
The home based MNCThe home based MNC (Sölvell, Zander, Porter)(Sölvell, Zander, Porter)
4 Diamonds4 DiamondsFactor endowmentsFactor endowmentsDemand conditionsDemand conditions
Relating and supporting industriesRelating and supporting industries
Firm strategy, structure and rivalryFirm strategy, structure and rivalry
supplies to regions or nations rather than the supplies to regions or nations rather than the international environmentinternational environment
The home based MNCThe home based MNC (Sölvell, Zander, Porter)(Sölvell, Zander, Porter)
The home base is best understood as a The home base is best understood as a limited geographical area, where a firm limited geographical area, where a firm has a cluster of core functions including has a cluster of core functions including
strategic decision making, research strategic decision making, research development and often some form of core development and often some form of core
manufacturing.manufacturing.
The home based MNCThe home based MNC (Sölvell, Zander, Porter)(Sölvell, Zander, Porter)
Simple home-based MNCSimple home-based MNCSelective tappingSelective tapping
Multi-home-based MNCMulti-home-based MNCSeparate bases for individual lines of businessSeparate bases for individual lines of business
Case StudyCase Study
1819Founding by Alois Miesbach on the Wienerberg in Vienna
1869Trading starts on the Vienna Stock Exchange
1986Start of internationalization and expansion (Germany)
1990 Start of expansion in Eastern Europe
1999 Advance to Global Player
Case StudyCase Study 235 plants in 24 countries235 plants in 24 countries Profit after tax € 155,5 millionProfit after tax € 155,5 million Brands & Products:Brands & Products:
POROTHERM - BricksPOROTHERM - Bricks TERCA - Facing bricksTERCA - Facing bricks KORAMIC - Roof tilesKORAMIC - Roof tiles SEMMELROCK - PaversSEMMELROCK - Pavers BRAMAC & TONDACH GLEINSTÄTTEN - RoofBRAMAC & TONDACH GLEINSTÄTTEN - Roof PIPELIFE - PipesPIPELIFE - Pipes Wienerberger OfenkachelWienerberger Ofenkachel
Structure and OrganizationStructure and Organization
Structure and OrganizationStructure and Organization Mature product lines in core businessMature product lines in core business Not all products in all countriesNot all products in all countries Stable technologiesStable technologies
Diveded into regionsDiveded into regions Regions report to managing boardRegions report to managing board Each region full control over activitiesEach region full control over activities
Geographic division structureGeographic division structure
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