Web Global Structures

8/2/2019 Web Global Structures

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Reminders

1. Acme & Omega revisions dueMonday.

2. Rhodes Industries Case due Monday.

3. Please leave your mid-term courseevaluations with me at your

convenience.


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Designing Organizationsfor

The International Environment

BA 152


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INPUT THROUGHPUT OUTPUT

Organization

Technology

Industry/Competition

Customers

HumanResources

MaterialResources

FinancialResources

Government/Political Sector

EconomicSector

Cultural/Demographic

Sector

PRIMARY SECTORS

SECONDAR

Y SECTORS

The International Environment


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Why Enter the GlobalEnvironment

Growth opportunities

Economies of scale Economies of scope

Move expensive operations to

lower cost locations outsourcing Others?


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Stages of InternationalDevelopment

Domestic with modest global efforts Aware of an export market (might have

an Export Department)

International Multi-domestic thinking - views issues as

independent across countries (might havean International Division)


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Stages of InternationalDevelopment

Multinational Marketing and manufacturing facilities are

located around the world.

Global Goods and services are produced to meet

the needs of the global market.(stateless company)


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Globalization Strategy

Product design, manufacturing, and/oradvertising strategies are standardized forworld markets.

Fitting Design &International Strategy


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Multi-domestic Strategy

Competition in each country is assumed tobe independent of competition in othercountries.

Product design, manufacturing, and/or

advertising strategies are tailored to eachcountry.



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Design Choices will be a functionof these two competing demands.

Forces for global integration

Forces for national responsiveness



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Low Forces for National Responsiveness High

Low

High

GlobalMatrix

Structure

GlobalProduct

Structure

GlobalGeographicStructure

InternationalDivision

TransnationalModel


Forcesfor

GlobalIntegration


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A Hybrid Organizationwith an International Division

President

Finance &

AccountingPersonnel

Europe

Asia

Vice-PresidentElectrical Products

Vice-PresidentScientific Products

Vice-PresidentMedical Products

Vice-President

International Ops.


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Legal Relations Engineering

Global InstrumentsProduct Group

Global IndustrialGroup

Global MaterialsHandling Group

President F & A

RegionalCoordinators

International

CEO

Partial Global Structureuse by Eaton Corp.


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Colgate-Palmolives GlobalGeographic Structure

CEO

NorthAmerica

Europe Latin America

Corporate Staff

Far East South Pacific

International

BusinessDevelopment

ChiefOperating

Officer

WorldwideSales &

Marketing

CorporateDevelopment

WorldwideSales &

Marketing

CorporateDevelopment


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GMs Global GeographicStructure

CEO

US

Division

Australia

Division

Sweden

Division

South Korea

Division

Germa

Division


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GMs Global GeographicStructure: The Problems

Reversing 80 Years of History GM Is Reining In Global FiefsDetroit Makes Key Decisions on Design, Manufacturing To Cut Costly Duplication

Chinese Build a Chevy Engine

General Motors Corp. is the biggest car company in the world. But in many parts of theglobe it has long operated like a smaller regional player, with executives in places likeAustralia and Sweden given wide autonomy over the design of new models. Now GM has putan end to that policy, which dates back to the 1920s and legendary president Alfred P. Sloan.It's insisting that its world-wide units share basic parts and work together to design vehiclesthat can be sold, with modest variations, anywhere in the globe. One example: GM wants toreduce the types of radios it uses in its cars to 50 from 270 currently, saving 40% in radio

costs.

GM's struggle to find the balance between local autonomy and central control is a familiarone for global corporations. Mr. Wagoner says he wants GM to be the winner in what he calls"a race to the middle" in the centralization vs. decentralization debate.


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ABBs Global Matrix

Structure

PowerTransformers

Transportation

Products

High VoltageTowers

OtherBusiness Areas

BusinessAreas

Germany Latin American Canadian Far East

InternationalExecutiveCommittee Country Managers


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The Transnational Model:

Philips NV


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The Transnational Model

Highly specialized operations dispersedworldwide and linked through interdependent

relationships. Structure is flexible and changeable as

needed.


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The Transnational Model

Local managers can initiate strategicchanges that may infiltrate the rest of the

organization. Coordination is largely a function of strong

culture, shared vision and values, andmanagement style.


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The Downside Risks of theGlobal Environment

Western business plans may nottranslate well. (Wal-Mart/Disney)

Backlash in the home market.

Exposure to foreign laws andregulations

Political instability

Others?


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Next Time

Rhodes Industries

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