International business environment and operations 13e pearson chapter 15

International Business
Environments and Operations,
13/e
Part 5
Global Strategy, Structure, and
Implementation
15-1
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall


Chapter 15
The
Organization
of
International
Business

15-2
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall


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
15-3
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall


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

15-4
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall


Factors
Affecting Organizing
Operations

15-5
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall


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

15-6
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall


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

15-7
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

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 lowerlevel managers make and implement
strategic decisions.
15-8
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall


Horizontal Differentiation
• Functional Structure
– Advantages and Disadvantages

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

• Matrix Structure
– Unity of Command Principle

• Mixed Structure
15-9
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Contemporary Structures
• Network Structure
• Virtual Organization
• Pitfalls of Contemporary Structures

15-10
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall


Coordination and Control Systems
• Approaches to Coordination:
– Standardization
– Plan
– Mutual Adjustment
• Control Methods:
– Market
– Bureaucratic
– Clan
15-11
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall


Control Tools
•
•
•
•
•

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

15-12
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall


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

• Challenges and Pitfalls
• Organization Culture and Strategy

15-13
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall


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
15-14
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall


All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, or
transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise,
without the prior written permission of the publisher.
Printed in the United States of America.

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