Daniels ib13 ppt_15

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 15-1

International BusinessEnvironments and Operations

Part 5Global Strategy, Structure, and

Implementation


Chapter 15

The Organization

of International

Business


Chapter Objectives• Profile the evolving understanding of organizing a

company for international business• Describe the antecedents and features of traditional

structures• Describe the antecedents and features of contemporary

structures• Study the systems used to coordinate and control

international activities• Profile the role and characteristics of organization culture• Link the ideas of strategy and organization in the

international company


Organizing Operations

Organizing is the process of creating the structure, systems, and culture needed to implement the company’s strategy.


FactorsAffecting Organizing

Operations


Change: The Critical Factor

Changes in the market environment and nature of work push managers to rethink how they organize their workplace.

• Trends inducing change:– Expansion of International Business– Importance of Knowledge as a Competitive Advantage– The Internet as a Design Standard– Workplace Adjustments– Managerial Adjustments– Changing Social Contract– Global Credit Crunch and Rising Unemployment


Organization Structure

Structure: formal arrangement of jobs within acompany that specifies roles, responsibilities,and relationships• Vertical Differentiation• Horizontal Differentiation


Vertical Differentiation

• Centralization versus Decentralization in Organizational Design– Centralization: degree to which high-level

managers make strategic decisions and delegate them to lower levels for implementation.

– Decentralization: degree to which lower-level managers make and implement strategic decisions.


Horizontal Differentiation

• Functional Structure– Advantages and Disadvantages

• Divisional Structure– International Division– Product Division– Geographic Division

• Matrix Structure– Unity of Command Principle

• Mixed Structure


Contemporary Structures

• Network Structure• Virtual Organization• Pitfalls of Contemporary Structures


Coordination and Control Systems

• Approaches to Coordination:– Standardization– Plan– Mutual Adjustment

• Control Methods:– Market – Bureaucratic– Clan


Control Tools

• Reports• Visits to Subsidiaries• Cost and Accounting Comparisons• Evaluative Metrics• Information Systems


Organization Culture

• The Importance of Culture– Culture and Values– Culture and the Value Chain

• Challenges and Pitfalls• Organization Culture and Strategy


Future: The Role and Rise of Corporate Universities

• Managers believe companies must purposefully develop shared values

• Worldwide, more than 1,000 new corporate universities have begun operations

• Corporate universities—physical and virtual institutions that:– Lead training efforts– Facilitate learning– Help upgrade competencies– While advocating the philosophical ideals of the

company’s culture


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