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Chapter Six

Explore the motivations for global expansion, stages of international evolution, global strategic alliances, organizational structure options, cultural differences, and coordination mechanisms in a global context.

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Chapter Six

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  1. 0 Chapter Six Designing Organizations for the International Environment

  2. Entering The Global Arena 0 • More companies are doing business globally • Companies need top leaders who have a global outlook • Advancements in technology and world communications has changed the competitive landscape

  3. Motivations for Global Expansion 0 Motivation to Expand: • Economies of Scale • Economies of Scope • Low-Cost Production Factors Economic, technological, and competitive forces have combined to push companies from a domestic to a global focus.

  4. The Global Economy as Reflected in the Fortune Global 500 0

  5. Stages of International Evolution 0 • Domestic • International • Multinational • Global

  6. Global Expansion Through International Strategic Alliance 0 • Licensing – allowing another firm to market your brands • Joint Ventures - separate entity of two or more firms • Consortia – groups of independent companies

  7. Model for Global vs. Local Opportunities 0 • Global standardization versus national responsiveness • Globalization or multidomestic strategy • Globalization strategy - products are standardized throughout the world • Multidomestic - competition is handled in each country independently

  8. Fitting Organization Structure to International Advantages 0

  9. Global Organization Structure 0 • International Division • Global Product Division • Global Geographic Division • Global Matrix Structure

  10. The Global Organizational Challenge 0

  11. Global Coordination Mechanisms 0 • Global Teams • Headquarters Planning • Expanded Coordination Roles

  12. Benefits of Collaboration 0 • Cost Savings • Better Decision Making • Greater Revenue • Increased Innovation

  13. Cultural Differences In Coordination and Control 0 National Value System • Power Distance: people accept inequality • Uncertainty Avoidance: members feel uncomfortable with uncertainty and ambiguity

  14. National Approaches to Coordination an Control 0 • Centralized Coordination:Japanese Companies • Decentralized Approach:European Firms • Coordination and Control Through Formalization:The United States

  15. The Transnational Model of Organization 0 • Mix in organizational complexity with diverse units and coordination • Combines global learning, knowledge sharing and technological innovation • Structure required in highly complex organizations • An integrated network linked together to achieve multidimensional goals • Based on interdependence • A managerial state of mind, a set of values and shared values toward a worldwide learning system

  16. Transnational Organizations 0 • Assets and resources are dispersed worldwide • Structures are flexible and ever-changing • Subsidiary managers initiate strategy and innovations that become strategy for the whole organization • Corporate culture, shared vision and management style guide the organization

  17. Design Elements 0 • Managers must design organizations for complex international coordination • Organizations international strategy and structure evolve • There a diverse options for specific international strategies • There are a variety of challenges for global organizations • Diverse national and cultural values influence an organization’s approach • Companies operating globally require broad coordination

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