Lecture 8 - Organizational Structure

Slide 9.
Chapter 9
Organizing strategy
Alan M Rugman and Simon Collinson, International Business, 5th Edition, Pearson Education Limited 2009
Slide 9.2
Organizing strategy
Objectives Introduction Organizational structures Strategic management and organizing strategy.
Slide 9.3
Introduction
The FSA and CSA framework is related to the issues of organizational structure.
A centralized and hierarchical structure is usually followed by firms in cell 1 pursuing economic integration. In cell 4, the strategy of national responsiveness may require a decentralized organizational structure. In cell 3, it may be necessary to combine the advantages of both a centralized and decentralized organizational structure.
Slide 9.4
Slide 9.5
Organizational structures
Slide 9.6
Early organization structures

When a company first begins international operations, it is typical for these activities to be extensions of domestic operations. Primary focus continues to be the local market. As international operations increase, however, the MNE will take steps to address this growth structurally.
For instance, by having a marketing or export department handle international sales or by using an overseas subsidiary.
Slide 9.7
Figure 9.1
An export department structure

Slide 9.8
Figure 9.2
Use of subsidiaries during the early stages of internationalization

Slide 9.9
The international division

The international division structure centralizes all the international operations. Advantages: It reduces the CEOs burden of direct operation of overseas subsidiaries and domestic operations. It raises the status of overseas operations to that of the domestic divisions.
Slide 9.10
Figure 9.3
An international division structure

Slide 9.11
Global organization structures

As MNEs generate more and more revenues from their overseas operations, their strategies and the structures used to implement these strategies become more global in focus.
There are six basic types of global structures.
Slide 9.12
1. Global product structure

An arrangement in which domestic divisions are given worldwide responsibility for product groups.
Slide 9.13
Figure 9.4
A global product structure

Slide 9.14
2. Global area structure

Primary operational responsibility is delegated to area managers, each of whom is responsible for a specific geographic region.
Slide 9.15
Figure 9.5
A global area structure

Slide 9.16
3. Global functional structure

Builds around the basic tasks of the organization. For example, in manufacturing firms, production, marketing and finance are the three primary functions that must be carried out for the enterprise to survive.
Slide 9.17
Figure 9.6
A global functional structure

Slide 9.18
4. Matrix structure
An organizational arrangement that blends two organizational responsibilities such as functional and product structures or regional and product structures.
Slide 9.19
Figure 9.7
Geographic matrix structure

Slide 9.20
Slide 9.21
Figure 9.8
A multinational matrix structure

Source: Allan R. Janger, Matrix Organizations of Complex Business (New York: The Conference Board, 1979), p. 31
Slide 9.22
5. Mixed structure
A hybrid organization design that combines structural arrangements in a way that best meets the needs of the enterprise.
Slide 9.23
Figure 9.9
A mixed structure
Slide 9.24
6. Transnational network structure

Designed to help MNEs take advantage of global economies of scales while also being responsive to local customer demands.
Relies on a network arrangement to link the various worldwide subsidiaries.
Three components:
(1) Dispersed subunits (2) Specialized operation (3) Interdependent relationships
At the center of the transnational network structure are nodes, which are units charged with coordinating product, functional, and geographic information.
Slide 9.25
Figure 9.10
Transnational network structure

Slide 9.26
Strategic management and organizing strategy
Slide 9.27
Factors that encourage centralization or decentralization of decision making in multinational operations

Table 9.1

Lecture 8 - Organizational Structure

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Lecture 8 - Organizational Structure

Uploaded by

Copyright:

Available Formats

Slide 9.

Early organization structures

An export department structure

Use of subsidiaries during the early stages of internationalization

The international division

An international division structure

Global organization structures

There are six basic types of global structures.

1. Global product structure

A global product structure

2. Global area structure

A global area structure

3. Global functional structure

A global functional structure

Geographic matrix structure

A multinational matrix structure

6. Transnational network structure

Transnational network structure

Strategic management and organizing strategy

Factors that encourage centralization or decentralization of decision making in multinational operations

You might also like