Upload
gazal-gupta
View
221
Download
0
Embed Size (px)
Citation preview
7/29/2019 Contemporary Organization Forms
1/28
FUNCTIONAL STRUCTURE WITH AN
EXPORT DEPARTMENT
7/29/2019 Contemporary Organization Forms
2/28
FOREIGN SUBSIDIARIES
Subunit of the multinational company that islocated in another country
Types of foreign subsidiaries
Minireplica subsidiary: smaller version of theparent companyUses the same technology and producing the same
products as the parent company
Transnational subsidiary: has no companywide
form or functionEach subsidiary contributes what it does best
7/29/2019 Contemporary Organization Forms
3/28
AN INTERNATIONAL DIVISION
7/29/2019 Contemporary Organization Forms
4/28
ORGANIZATIONAL STRUCTURES TO IMPLEMENT
MULTINATIONAL STRATEGIES
Reasons to abandon the international
division
Diverse products overwhelm capacities of
multinational
Not close enough to local markets
Cannot take advantage of global economies of
scale or global sources of knowledge Several options available to deal with these
shortcomings
7/29/2019 Contemporary Organization Forms
5/28
ROYAL VOPAK GEOGRAPHIC STRUCTURE
7/29/2019 Contemporary Organization Forms
6/28
WORLDWIDE PRODUCT STRUCTURE
7/29/2019 Contemporary Organization Forms
7/28
Both worldwide product structure and
worldwide geographic structure have
advantages and disadvantages
Product structure: supports global products
Geographic structure: emphasizes local
adaptation
Multinationals often want both abilitiesUse hybrids or matrix
7/29/2019 Contemporary Organization Forms
8/28
STOP FORD AND WELLS MODEL
7/29/2019 Contemporary Organization Forms
9/28
7/29/2019 Contemporary Organization Forms
10/28
7/29/2019 Contemporary Organization Forms
11/28
WORLDWIDE MATRIX STRUCTURES
Symmetrical organization with equal
emphasis on
Worldwide product groups and
Regional geographical divisions
7/29/2019 Contemporary Organization Forms
12/28
WORLDWIDE MATRIX STRUCTURES
Balances the benefits produced by area andproduct structures
Creates equal lines of authority for products
and areasWorks best with near equal demands from bothsides
Requires extensive resources for
communication and coordinationRequires middle and upper level managers
with good human relations skills
7/29/2019 Contemporary Organization Forms
13/28
EXHIBIT 7.9: WORLDWIDE MATRIX
ORGANIZATION
7/29/2019 Contemporary Organization Forms
14/28
MATRIX STRUCTURES
Problems emerging with worldwide matrix
structures
Slow decision making process
Too bureaucratic
Too many meetings and too much conflict
7/29/2019 Contemporary Organization Forms
15/28
MATRIX STRUCTURES (CONT.)
Result
Companies have redesigned their matrix
structures to be more flexible with speedier
decision makingOther companies have abandoned their matrices
and returned to product structures
Key issue is equal line of authority
7/29/2019 Contemporary Organization Forms
16/28
FRONT-BACK HYBRID STRUCTURE
The front side has units based on geographyto provide a multidomestic or regional focus
The backside has units based on product
groups to capture global economies of scalein R&D and production
Front end is decentralized with unit heads as
key decision makers and holding P&Lresponsibility
Back end is more centralized
7/29/2019 Contemporary Organization Forms
17/28
EXHIBIT 7.8: TETRA PAKS FRONT-BACK HYBRID
STRUCTURE
7/29/2019 Contemporary Organization Forms
18/28
P&G 4 DIMENSIONAL STRUCTURE
7/29/2019 Contemporary Organization Forms
19/28
7/29/2019 Contemporary Organization Forms
20/28
THE TRANSNATIONAL-NETWORK STRUCTURE
Newest solution to the complex demand of
being locally responsive and taking
advantage of competitiveness of nation
Combines functional, product, and
geographic subunitsDispersed subunits
Specialized operations Interdependent relationships
7/29/2019 Contemporary Organization Forms
21/28
THE TRANSNATIONAL-NETWORK STRUCTURES
Has no symmetry or balance in its structural
form
Resources, people, and ideas flow in all
directions
Nodes or centers in the network coordinate
product, functional, and geographic
information
7/29/2019 Contemporary Organization Forms
22/28
GEOGRAPHIC LINKS IN THE PHILIPS
TRANSNATIONAL STRUCTURE
7/29/2019 Contemporary Organization Forms
23/28
PRODUCT LINKS IN THE SAME ORGANIZATION
7/29/2019 Contemporary Organization Forms
24/28
COMPONENTS OF THE TRANSNATIONAL-
NETWORK STRUCTURE
1. Dispersed subunits: subsidiaries locatedanywhere where they can most benefit thecompany
2. Specialized operations: subunits specializingin particular product, research areas, ormarketing areas
3.
Interdependent relationships: continuoussharing of information and resources bydispersed and specialized subunits
7/29/2019 Contemporary Organization Forms
25/28
HOW TO DECIDE ON ORGANIZATIONAL
STRUCTURE FOR MULTINATIONALS?
How geographically dispersed are
capabilities
How competent are people to work across
different geographies
These two questions decide what should be
the organizational structure for a
multinational organization
7/29/2019 Contemporary Organization Forms
26/28
Sharp
R&D and manufacturing in Japan,only international sales focus
Consumer products companies: Locate
manufacturing to low cost nations like Indiabut keep R&D centered in US
When GE develops new Jet engines, relieson China to design for manufacturing, usesIndia for analytics and material science andGerman Labs for wind tunnel testing
7/29/2019 Contemporary Organization Forms
27/28
COMPETENCE ACROSS GEOGRAPHIES
Large cultural and technical differencesexists across countries and within functionswhich a firm is unable to reconciliate Not
very competentCommon language and low cultural
differences people easily mobile acrossgeographies and countries Moderately
competent
People well adapt to work across products,functions and geographies
7/29/2019 Contemporary Organization Forms
28/28
Competence in
working across
countires
Low Medium High
Front back hybrid Global matrix Transnational/ T-Design
Geogrophic
dispersion
Low Medium High