Entering The Global Arena

Entering The Global Arena

6
Chapter
Design Organiza,ons for the
Internaonal Environment

Twel%h Edi+on
Richard L. Da%
Entering The Global Arena
• More companies are doing business globally
• Companies need top leaders who have a
global outlook
• Advancements in technology and world
communica(ons have changed the
compe((ve landscape

2

Mo+va+ons for Global Expansion
Mo,va,ons for Global Expansion:
• Economies of Scale
• Economies of Scope
• Low-Cost Produc+on Factors
Economic, technological, and compe11ve
forces have combined to push companies
from a domes1c to a global focus
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The Global Economy as Reflected in
the Fortune Global 500
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4
Stages of Interna+onal Evolu+on
5
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Global Expansion ─ Interna+onal
Alliances and Acquisi+ons
• Licensing – allowing another firm to market
your brands
• Joint Ventures – separate en+ty of two or
more firms
• Acquisi1ons – offer greater control than joint
ventures
6
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Challenges of Global Design
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7
Leading Mul+na+onals and Selected
Countries 2010
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Examples of Trickle-Up Innova+on
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Strategies for Global vs.
Local Opportuni+es
• Global standardiza+on versus local
responsiveness
– Globaliza+on or mul+domes+c strategy
• Globaliza1on strategy – products are
standardized throughout the world
• Mul1domes1c strategy – compe++on is
handled in each country independently
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Fi]ng Organiza+on Structure to
Interna+onal Advantages
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11
Global Organiza+on Structure
üInterna+onal Division
üGlobal Product Division
üGlobal Geographic Division
üGlobal Matrix Structure
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Domes+c Hybrid Structure with
Interna+onal Division
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13
Par+al Global Product Structure
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Global Geographic Structure
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15
Global Matrix Structure
16
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Global Coordina+on Mechanisms
üGlobal Teams
üHeadquarters Planning
üExpanded
Coordina+on Roles
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Benefits of Collabora+on
→ Cost Savings
→ Be`er Decision Making
→ Greater Revenue
→ Increased Innova+on
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The Transna+onal
Model of Organiza+on
• Advanced interna+onal organiza+on to deal with
mul+ple, interrelated, complex issues
• Theory is based on interdependence
• Useful for large, mul+na+onal companies with
subsidiaries
• Create an integrated network of individual
opera+ons that are linked together
• Not an organiza+onal chart; it is a managerial state
of mind
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Interna+onal
Organiza+onal
Units
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20
Transna+onal Organiza+ons
• Assets and resources are dispersed worldwide
• Structures are flexible and ever-changing
• Subsidiary managers ini+ate strategy and
innova+ons that become strategy for the
whole organiza+on
• Corporate culture, shared vision, and
management style guide the organiza+on
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Design Elements
vManagers must design organiza+ons for
complex interna+onal coordina+on
vOrganiza+ons’ interna+onal strategies and
structures evolve
vThere are diverse op+ons for specific
interna+onal strategies
22
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Design Elements
vThere are a variety of challenges for global
organiza+ons
vDiverse na+onal and cultural values influence
an organiza+on’s approach
vCompanies opera+ng globally require broad
coordina+on
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