Unit Lesson MBA 6001: Unit VII Click the arrows at the corner of each slide to advance (green) or go back (red) during the presentation.

Unit VII: organizational design and strategy within the global operations environment Please be sure to turn up your volume or plug in your headphones. The next several slides contain important audio. (OpenClipartVectors, 2013)

Strategy Degree of rivalry Threat of substitutes Buyers’ bargaining power Suppliers’ bargaining power Barriers to entry and threat of new entrants Business Trends Economic Growth Political Activities Societal Developments Organizations are constantly changing. Business trends, economic growth, political activities, and societal developments cause constant organizational transitions. Therefore, changing organizational structures are needed to accommodate transformation, reorganization, and realignment.   Strategy is the direction and scope of an organization over time. It aligns resources to its changing environment, its markets, and customers to meet shareholder’s expectations (Feurer & Chaharbaghi, 1997). It has been discussed that there are five forces that shape strategy (Porter, 1980). These forces are 1) degree of rivalry, 2) threat of substitutes, 3) buyers’ bargaining power, 4) suppliers’ bargaining power, and 5) barriers to entry and threat of new entrants. A strategy that embraces the organization’s mission and vision may include globalization.

Globalization Global financial markets Internet and supply chain management Economies of scale Competitive advantage Strategy implementation Transformations Innovative ideas Different perspective in management Cultural changes Globalization has changed the way organizations operate in terms of global financial markets, internet and supply chain management, economies of scale, and competitive advantage. A process of strategy implementation and transformation comes with globalization. Globalization is also about innovative ideas, a different perspective in management, and cultural changes (Mikl-Horke, 2004). Globalization is an important factor for organizations that compete at an international level to benefit customers, performance quality, and a low-cost strategy (Friedman, 2007). Human resource management (HRM) must adapt to international and cultural trends to successfully manage these organizational transitions. (Marco, 2010)

Organizational Design Differences Cultural Factors Change Processes Privatization laws Market economic policies Changes in consumer behaviors and employee behaviors Profound social and cultural changes Organizational Design Differences Management styles Shareholder values Communication styles Cultural Differences Uncertainty Avoidance Transfer of best practices Centralized power distance when making decisions Confrontation when achieving consensus HRM Recruit globally Provide training Select leaders consistent with the culture Meet employees’ information and career advancement needs Promote women (some cultures) Increased sensitivity Cultural and diversity awareness To cope with globalization, many change processes must be considered for successful operations such as privatization laws, market economic policies, changes in consumer behaviors and employee behaviors, and profound social and cultural changes. Organizational design in global economies will include differences in management styles, shareholder values, and communication styles. Cultural factors and performance differences may force changes in the organizational structure. Strategic implementation involves changing value conceptions and attitudes while connecting to institutional structures, behavioral patterns, and customs of the culture (Mikl-Horke, 2004). Cultural differences may include uncertainty, avoidance, transfer of best practices, centralized power distance when making decisions, or confrontation when achieving consensus. Therefore, human resource management have to recruit globally, provide training, select leaders consistent with the culture, and meet employee’s information and career advancement needs. In some cultures, it may be difficult to promote women. As organizations globalize, there are differences in cultures, languages, speed, and content expertise. Globalization also calls for increased sensitivity and cultural and diversity awareness (Friedman, 2007).

Structures Three-dimensional matrix structure Boundaryless Structures Worldwide product manager Functional manager International issues Overseas managers Financials Local issues Product and functional duties Branding Boundaryless Structures Common with globalization Some organizations use a three-dimensional matrix structure for international operations. This structure may include a worldwide product manager, a functional manager for international issues, and overseas managers to focus on financials, local issues, product and functional duties, and branding. In international settings, to eliminate communication resistance and power issues, more networking and collaborations are needed rather than hierarchal relationships. Boundaryless structures are common with globalization. Departmental, team, and dual-reporting structures also work well in international settings. (Altmann, 2015)

Technology Collaboration Global Risk Globalization Inflation Intracompany accounts Performance management Globalization Free trade zones Reduced labor and production cost Products that are similar across cultures Success happens when companies successfully integrate local market differences with economies of scale and transfer of knowledge and technology. (Linforth, 2015) Technology is the key to successful global implementation. U.S. companies and foreign countries constantly collaborate to stay current not only with technology but also with financial resources. Global risk should be considered and managed considering inflation, intracompany accounts, and performance management. In addition to free trade zones, globalization includes reduced labor and production cost and products that are similar across cultures. Success happens when companies successfully integrate local market differences with economies of scale and transfer of knowledge and technology.

Boundaryless structures are NOT common with globalization. Self Check True or False (Altmann, 2014) Boundaryless structures are NOT common with globalization. The next few slides consist of self check questions for you to test your knowledge regarding the content covered in this unit. The correct answer will be indicated on the next slide. True or False: Boundaryless structures are NOT common with globalization

FALSE Boundaryless structures are common with globalization. Departmental, team, and dual-reporting structures also work well in international settings. The answer is False! Boundaryless structures are common with globalization. Departmental, team, and dual-reporting structures also work well in international settings. (ClkerFreeVectorImages, 2012)

True or False (Altmann, 2014) Business trends, economic growth, political activities, and societal developments cause constant organizational transitions. True or False: Business trends, economic growth, political activities, and societal developments cause constant organizational transitions.

TRUE Business trends, economic growth, political activities, and societal developments cause constant organizational transitions. Therefore, changing organizational structures are needed to accommodate transformation, reorganization, and realignment. True! Business trends, economic growth, political activities, and societal developments cause constant organizational transitions. Therefore, changing organizational structures are needed to accommodate transformation, reorganization, and realignment. (ClkerFreeVectorImages, 2014)

References Altmann, G. (2014). Test [Image]. Retrieved from https://pixabay.com/en/board-school-uni-learn-work-test-361516/ Altmann, G. (2015). Organizational chart [Image]. Retrieved from https://pixabay.com/en/organization-chart-grid-817363/ ClkerFreeVectorImages. (2012). X [Image]. Retrieved from https://pixabay.com/en/cancel-no-symbol-sign-wrong-mark-47588/ ClkerFreeVectorImages. (2014). Checkmark [Image]. Retrieved from https://pixabay.com/en/checkmark-tick-check-yes-mark-303752/ Feurer, R., & Chaharbaghi, K. (1997). Strategy development: Past, present and future. Training for Quality, 5(2), 58-70. Friedman, B. A. (2007). Globalization implications for human resource management roles. Employee Responsibilities and Rights Journal, 19(3), 157. doi:http://dx.doi.org/10.1007/s10672-007-9043-1 Linforth, P. (2015). Internet [Image]. Retrieved from https://pixabay.com/en/business-internet-web-technology-1012761/ Marco Lachmann-Anke, P. (2010). Globe [image]. Retrieved from https://pixabay.com/en/globe-planet-earth-world-1015311/ Mikl-Horke, G. (2004). Globalization, transformation and the diffusion of management innovations. Journal for East European Management Studies, 9(2), 98-122. OpenClipartVectors. (2013). Headset [Image]. Retrieved from https://pixabay.com/en/headphone-headset-music-audio-159569/ Porter, M.E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. New York, NY: Free Press.