16. Planning, Organization, and Control of Global Marketing Operations

Chapter Overview Global Strategic Marketing Planning Key Criteria in Global Organizational Design Organizational Design Options Organizing for Global Brand Management Life Cycle of Organizational Structures Control of Global Marketing Efforts

Introduction The capstone of a company’s global marketing activities will be its marketing plan. To implement its global plans effectively, a company needs to reflect on the best organizational setup that enables it to successfully meet the threats and opportunities posed by the global marketing arena.

Introduction Global marketers must confront organizational issues such as: What is the proper communication and reporting structure? Who within the organization should bear responsibility for each of the functions? How can a company leverage the competencies of its subsidiaries? Where should decision-making authority reside for various areas?

1. Global Strategic Marketing Planning The content of a global strategic marketing plan usually covers four areas: Market situation analysis Objectives Strategies Action plans Bottom-Up versus Top-Down Strategic Planning

1. Global Strategic Marketing Planning Marketing plans can go wrong! The top stumbling blocks are: Lack of proper information Too little emphasis on the development of alternative strategic options Unrealistic strategic objectives Failure to separate short/long-term plans. Lack of framework to identify strengths/weaknesses

2. Key Criteria in Global Organizational Design Environmental Factors Competitive Environment Rate of Environmental Change Regional Trading Blocs Nature of Customers

2. Key Criteria in Global Organizational Design Firm-Specific Factors Strategic Importance of International Business Product Diversity Company Heritage Quality of Local Managerial Skills

3. Organizational Design Options International Division Structure Global Product Division Structure (See Exhibit 16-1.)

Exhibit 16-1: Organizational Structure of John Deere of a Global Product Structure

3. Organizational Design Options Geographic Structure (Exhibit 16-2) Country-Based Subsidiaries New Role of Country Managers: Country managers of the twenty-first century should have the following five profiles: The trader The builder The cabinet member The ambassador The representative The country prince (country manager and product champion)

Exhibit 16-2: Heinz Company: Example of a Geographic Structure

Exhibit 16-3: Job Description of Japan Country Manager at Twitter

3. Organizational Design Options Regional Structures A recent survey done in the Pacific region singles out five distinct roles for regional headquarters (RHQs): Scouting Strategic simulation Signaling commitment Coordination Pooling resources Matrix Structure (Exhibit 16-4) The matrix structure explicitly recognizes the multidimensional nature of global strategic decision making. With a matrix organization, two dimensions are integrated into the organization.

Exhibit 16-4: Nestlé’s Organizational Setup

3. Organizational Design Options The Global Network Solution The networked global organization is sometimes also referred to as a transnational. Examples: Asea-Brown Boveri (ABB), Toyota In the network model, each national unit can be viewed as a source of ideas, skills, capabilities, and knowledge that can be harnessed for the benefit of the total organization (See Exhibit 16-5.)

Exhibit 16-5: Guidelines on Global Virtual Teamwork

4. Organizing for Global Brand Management Global Branding Committee Usually made up of top-line executives from headquarters, regional, or local offices. Brand Champion A brand champion is a top-line executive (sometimes a CEO).

4. Organizing for Global Brand Management For global brand managers to be effective: The top of the organization is committed to branding. There is a solid strategic planning process in place. Managers see the need to travel to learn about local management and best practices. There is a system to identify, mentor, and train prospects who can fill the role. Informal, Ad-hoc Branding Meetings

5. Life Cycle of Organization Structures Companies need to adapt organizations existing structures too rigid or complex environmental changes managers learn new skills new senior management brought in. Successful restructuring takes time, planning and resources. Fundamental cultural change often needed.

5. Life Cycle of Organization Structures Several management theorists attempted to devise the “right” fit between the MNC’s environment (internal and external) and the organization. Present research argues that flexibility and sustaining the right management process are more important than pursuing the proper organizational structure. Country and regional managers must look at strategic issues from multiple perspectives—a “glocal” mindset.

Exhibit 16-6: Stopford-Wells International Structural Stages Model

6. Control of Global Marketing Efforts Formal (“Bureaucratic”) Control Systems Establishing Standards (Metrics) Behavior and outcome-based Measuring and Evaluating Performance Analyzing and Correcting Deviations

6. Control of Global Marketing Efforts Informal Control Methods Corporate Culture: Clan cultures and market cultures To shape a shared vision, cultural values should have three properties: Clarity Continuity Consistency Human Resource Development

6. Control of Global Marketing Efforts “Soft” versus “Hard” Levers There are seven management tools or levers that companies can use to resolve the global/local tradeoffs: 1. Organizational structure 2. Process 3. Incentives 4. Metrics 5. Strategy 6. Networks 7. Culture

6. Control of Global Marketing Efforts Advice for Strategic Coherence Recognize the need for business asymmetry Democracy is a must. A shared vision is important. There is a need for a good mix of specialists of three types – country, functional, and business. Moving unit headquarters abroad seldom solves the organization’s problems.