Org Design & Control

Org Design & Control - The Global Organization and...

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Unformatted text preview: The Global Organization and Management Challenge: Organizational Design, Coordination, and Control MOR 492 Global Strategy 1 OVERVIEW Control: Global Essence of Implementation Managers Design Systems Culture 2 Organization Organization Organization MOR 492 Global Strategy Global Managers The Business Manager (Global scale & competitiveness) x Strategist+Architect+Coordinator Sensor+Builder+Contributor Scanner+Cross-Pollinator+Champion Leader+Talent Scout+Developer The Country Manager (Local responsiveness & flexibility) x The Functional Manager (Linking functions worldwide) x The Corporate Manager (Transnational mission) x MOR 492 Global Strategy 3 Four Basic Global Strategies High GLOBAL TRANSNATIONAL Efficiency, Global Scale, Low Cost, Global Integration INTERNATIONAL MULTIDOMESTIC Low Importance of Local Responsiveness MOR 492 Global Strategy EXPORT -ING Low High 4 Four Basic Global Organizational Designs High CENTRALIZED GLOBAL BUSINESS UNITS GLOBAL NETWORKS Efficiency, Global Scale, Low Cost, Global Integration INTERNATIONAL FUNCTIONAL DECENTRALIZED AREAFOCUSED Low Importance of Local Responsiveness MOR 492 Global Strategy EXPORT -ING Low High 5 Aligning Managers Responsibility and Decision-making Discretion with Organizational Arrangements High GBU Manager Dominant Networked Team Efficiency, Global Scale, Low Cost, Global Integration International Functional Manager Dominant Country Manager Dominant Low EXPORT -ING Low Importance of Local Responsiveness High 6 MOR 492 Global Strategy Successful Multinational Execution Important but not sufficient Formal Control Mechanisms x Incentives, compensation, monitoring systems, rewards & punishments Head office is familiar with subsidiaries local situation Two-way communication exists in the global strategy-making process Head office is relatively consistent in making decisions across subsidiaries Subsidiary units can legitimately challenge HQ views and decisions Subsidiary units receive an explanation for final strategic decisions 7 Due Process in Global Strategic Decision-making x x x x x MOR 492 Global Strategy Global Strategy Prescriptions Locate each value-added activity in the country that has the least cost for the factor that activity uses most intensely Dexterously shift capital and resources across national markets, cross-subsidizing global units Institutionalize fully standardized product offerings, marketing approaches, and commonly used distribution systems worldwide to allow maximum global efficiencies Consciously consolidate worldwide knowledge, technology, marketing and production skills to build reservoirs of distinctive core competencies that can act as engines for continuous new business development, innovation and enhanced customer value 8 MOR 492 Global Strategy How do you execute them? Increasing sacrifice of subsystem for system priorities and considerations Swift actions in a globally coordinated manner Effective and efficient exchange relations among the nodes of the multinational's global network Multinational enterprises need subsidiary managers with a sense of commitment, trust and social harmony MOR 492 Global Strategy - compulsory vs. voluntary execution 9 CONTROL IMPEDIMENTS Historical HQ evolution of headquarterssubsidiary relationship managers may lack understanding of skills and limitations involved in operating in dissimilar environments of JV partners governments like to influence strategy at subsidiary level 10 Presence Host MOR 492 Global Strategy ORGANIZATION STRUCTURE Name Name Title Title s International s Worldwide s Global s Matrix MOR 492 Global Strategy Name Name Title Title Name Name Title Title Name Name Title Title Area Name Name Title Title Name Name Title Title Product Division s Network 11 EXPORT ORGANIZATION Disadvantages x x x Export manager may have insufficient clout Export orders may receive low priority Domestically oriented organization not supportive of foreign market requirements MOR 492 Global Strategy 12 TRADITIONAL SOLUTION: STRUCTURAL MERRY-GO-ROUND Worldwide Product Division Global Matrix FOREIGN PRODUCT DIVERSITY International Division Area Division FOREIGN SALES AS PERCENTAGE OF TOTAL SALES MOR 492 Global Strategy 13 INTERNATIONAL DIVISION CEO/ CEO/ PRESIDENT PRESIDENT DOMESTIC DOMESTIC DIVISION DIVISION A A DOMESTIC DOMESTIC DIVISION DIVISION B B DOMESTIC DOMESTIC DIVISION DIVISION C C INTERNATIONAL INTERNATIONAL DIVISION DIVISION Germany Germany Japan Japan Brazil Brazil MOR 492 Global Strategy 14 INTERNATIONAL DIVISION ADVANTAGES DISADVANTAGES Focus on international opportunities in hierarchy International Domestic domestic split divisions exert greater power understand product market strategies of all divisions Greater "weight" Establishment of formal control procedures Manager needs to MOR 492 Global Strategy 15 WORLDWIDE AREA CEO/ CEO/ PRESIDENT PRESIDENT North North America America Country Country Manager: U.S. Manager: U.S. Canada Canada Europe Europe Germany Germany Spain Spain South South America America Brazil Brazil Argentina Argentina Asia Asia India India Japan Japan MOR 492 Global Strategy 16 WORLDWIDE AREA ADVANTAGES DISADVANTAGES Local sensitivity More efficient use of resources within country country managers Country considerations dominate over global may not have adequate knowledge of all products Country managers Motivated Duplication at HQ 17 MOR 492 Global Strategy WORLDWIDE PRODUCT DIVISION CEO/ CEO/ PRESIDENT PRESIDENT Product Product Division A Division A Area Product Area Product Manager: U.S. Manager: U.S. Area Product Area Product Manager: Japan Manager: Japan Product Product Division B Division B Area Product Area Product Manager: U.S. Manager: U.S. Area Product Area Product Manager: Japan Manager: Japan Product Product Division C Division C Area Product Area Product Manager: U.S. Manager: U.S. Area Product Area Product Manager: Japan Manager: Japan Product Product Division D Division D Area Product Area Product Manager: U.S. Manager: U.S. Area Product Area Product Manager: Japan Manager: Japan MOR 492 Global Strategy 18 WORLDWIDE PRODUCT DIVISION ADVANTAGES DISADVANTAGES Better coordination within product groups competition Duplication at country level Global view of Facilitates technology transfer across country border Coordination across product groups initiative Less subsidiary MOR 492 Global Strategy 19 PORTFOLIO- WORDWIDE BUSINESS MANAGER Worldwide Business Manager Country 1 Country 5 Country 2 Country 3 Country 4 MOR 492 Global Strategy 20 PORTFOLIO- COUNTRY MANAGER Country Manager Business 1 Business 2 Business 4 Business 5 Business 3 MOR 492 Global Strategy 21 GLOBAL MATRIX CEO/ CEO/ PRESIDENT PRESIDENT Product Product Division A Division A Subs. Mgr. Subs. Mgr. Japan Japan Subs. Mgr. Subs. Mgr. Germany Germany Manager A Manager A Product Product Division B Division B Manager B Manager B Product Product Division C Division C Manager C Manager C MOR 492 Global Strategy 22 GLOBAL MATRIX ADVANTAGES DISADVANTAGES Combines positives of product and area structures May be suitable for transnational strategies MOR 492 Global Strategy Dual reporting can cause confusion Slow decision making Requires high horizontal and vertical coordination 23 ORGANIZATIONAL IMPLICATIONS: THE INTEGRATED NETWORK CENTRALIZED HUB DECENTRALIZED FEDERATION THE INTEGRATED NETWORK MOR 492 Global Strategy COORDINATED FEDERATION 24 NETWORK Business Business manager manager Business Business manager manager Business Business manager manager Corporate Corporate Management Management Business Business manager manager Business Business manager manager MOR 492 Global Strategy Business Business manager manager 25 ...
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This note was uploaded on 02/11/2012 for the course MOR 492 at USC.

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