5: Seminar Cross-Cultural Management in the International System Week 10: Organizational Culture and Strategy Supportive Structures The interconnections of an organizations reporting relationships comprise its structure. Formalized structures exist because most humans have some inherent need to check in with someone when they make important decisions. Organizations have developed a broad array of formal (and informal) reporting relationships to meet this need and very often an organizations culture reflects the desirability of these relationships. I strongly encourage you to find your own examples of each of the structural types I have described below since they are not contained in your text, but help to explain the material in the text. Particularly, you could look for source reviews that connect structure to culture (see organization structure, corporate governance, corporate structure, international structure, organizational culture and ALL variations of international or global attached to each of the terms). Do your best to connect the concepts from the text to the structure and culture source reviews. The classic and most common example of organizational design is the hierarchy, or functional structure. It is comprised of a CEO under whom we would titles including Vice Presidents of Finance, Marketing, Production, and Research & Development. This structural type originates from the military system wherein a clear chain of command is necessary for centralized decision-making and strategic implementation. The structure is supported by a great deal of formalization. Its downfall is that it is slow to respond to changes. Examples include the Garmin Corporation and the Australian Military.. http://www.garmin.com/aboutGarmin/employment.html http://www.awm.gov.au/atwar/structure/rank_comparative.htm A Basic Product Structure is very similar to the functional structure, except that the senior staff members are arranged by product type. So, instead of functional Vice Presidents, we would see Vice Presidents of various product lines VP of Olive Garden, VP of Bahama Breeze, VP of Red Lobster, or VP of Smokey Bones. http://www.dardenrestaurants.com/abt_board.asp The Basic Geographic Structure is also similar, there is a discernible CEO, but top managers have titles describing the domestic area region they are responsible for. Many Sales Departments are set up in this manner as it reflects the type and size of sales territories allotted to each sales person and regional sales manager. http://www.growmark.com/gmksyst/staff_board/staff.htm An International Division structure is simply a domestic structure, function, product, or geographic, with a separate title for all things international. Many organizations that are new international operations opt to hire international experts to run such departments. The upside is that such a structure allows the organization slow and steady entry into
international operations. The downside is that often international divisions are seen as undesirable, small or not part of the mainstream focus of the organization. Frankly, the ups outweigh the downs if the long-term strategic orientation is to expand internationally. It gives the organization time to build international competencies. Examples include the Kiwanis Club, the Cat Fanciers Association, Salzgitter, A.G. (one of the worlds largest specialty steel manufacturers see Trading) and Dominos Pizza. The International Division structure is most supportive of the International strategy. At Salzgitter, the cultural climate is very much about planned, yet aggressive growth. This growth has taken the form of buying up competitors that have foreign competencies already in place Mannesman Pipe and Tubing and Vallourec Steel and Piping. They are allowing the foreign subsidiaries to function as they always have and, in the process, are learning how to compete on the international market with a broad array of their product pallet. As a traditional family culture approach to organizational culture, they do not want to disturb their foreign purchases, but realize the parent company can learn much from its children. http://www.kiwanis-division5.org/ http://www.cfainternational.org/ http://www.salzgitter-ag.de/gb/2004/0_image/divisions.gif http://phx.corporate-ir.net/phoenix.zhtml?c=135383&p=irol-govmanage The World Wide Geographic structure is a common sense arrangement of resources surrounding geographic location. Essentially, each location is left to its own resources to ensure overall success, so the structure can be decentralized supportive and of the Multidomestic strategy: Save the Children and the International Chamber of Commerce. Or, the structure can have elements of centralization that are supportive of the Transnational Strategy: Bombardier Recreational Products and Honda. At Bombardier for example, the Guided Missile culture is alive and well. Each project has a clear and defined focus and failure to complete a project means that you sat on the exploding missile. As a nonproject member, asking questions about where the missile is aimed can result in getting run over. The project comes first and all resources are focused on its success. This is not necessarily a bad thing since much work gets completed in this fashion and the organization has logged tremendous successes over the years. http://www.savethechildren.net/alliance/about_us/structure.html http://www.iccwbo.org/home/menu_national_committees.asp http://www.brp.com/en/Company/Organizational.Structure.htm http://world.honda.com/profile/governance/
The World Wide Product Structure us rapidly developing as one of the most prevalent international business structures. The logic is pretty simple, assign top managers who are responsible for the worldwide production and marketing of a particular P/S/I type and let them build international expertise in all markets. It is an expensive structure since many job titles are reproduced in the different product divisions, but it is highly supportive of the Global and Transnational strategy types. Examples include the AMMA (the African Monsoon Multidisciplinary Analysis project, Kimball, International, and Procter & Gamble. http://www.kimball.com/ http://www.pg.com/jobs/corporate_structure/four_pillars.jhtml Hybrid structures are the most common business structures supporting international organizations. A hybrid is a reflection of the importance that international operations have taken on at an organization, as well as a reflection of the optimal operating processes within the industry. Examples include the International Olympic Committee - a Matrix / Hybrid; and the USAID - a Geographic Hybrid. Essentially, a hybrid structure can be supportive of any globalization strategy. Like all of the strategies, it should help the organization implement its core strategy and should be a planned and formal support mechanism; in other words, it should exist because the organization wants a hybrid, and not because it happened to evolve that way. The IOC carries many artifacts and icons of a long and variable past including many elements of an Eifel Tower culture: it is difficult to get onto IOC Committees (you had to be a former medal winner at one point), once in place committee members are difficult to remove from office, and changes have c...