Pesewa Presentations

Why do we need to organise international marketing activities? The way in which an organisation is structured helps determine: – how effectively and efficiency it exploits opportunities; – its capacity for responding to problems and challenges. No one best way. Issues: – definition of organizational units; – centralization vs. decentralization; – assignment of reporting and control system.

Factors influencing centralisation vs decentralisation: – management philosophy and style. Centralisation: – efficiency, consistency, avoidance of duplication. – the challenge of rapid technological change may best be met by centralised R&D. Decentralisation: – local responsiveness and adaptation. Centralisation vs decentralisation

Organisational Structure Organizational Design – Stages used when expanding overseas Export department – The creation of an export department structure is usually the first step in the functional organization toward entry into foreign markets – Usual initial form for export marketing. – Allows the building up of international expertise. International division – As the export revenue share increases and there are several countries in the strategic portfolio, the firm changes to an international division structure – Provides single, coordinated management of international business across product lines and countries. – Problem: lack of built-in key product/technology competencies.

Organisational Structure Geographical/regional structure – As overseas sales expand and the management of the countries takes more time and resources, the firm usually subdivides the international division into country groups or trade regions – Area presidents have responsibility for profit and performance. – Useful for companies with wide geographical spread and relatively narrow product lines: food, beverage, automobile, pharmaceutical industries. – Emphasises importance of regional characteristics. – Within regions, product managers have internal staff support. – Problems: difficulty in spreading of new products; duplication of staff; coordination of planning; coordination of R&D.

Organisational Structure Organisational Design – Stages of expansion (cont’d) Global product divisions – Regional and local managers’ authority is subordinated to that of the global division chief, who approves and directs – Used by companies with several dissimilar product lines. – Meets special requirements of products and supporting technologies. – Most appropriate where standardised marketing mix is more important than individualisation for local needs. – Problems: duplication of staff and activities; lack of international coordination between product lines. – Product line coordinators may ease problems.

Organisational Structure Matrix organisations – Organisations in which both country and product receive equal emphasis. – Mixed approach combines two or more competencies on a worldwide basis: geographic knowledge; product knowledge; functional competence; or knowledge of customer or industry. – Staff members have two or more bosses; work as members of more than one competency group. – Advantages: emphasises more than one competency (e.g., provide market and product knowledge). – Disadvantages: unclear decision-making structure; slower decision making; built-in tendency for conflict.

People and Organisational Culture Local Acceptance – Global marketing strategy often requires a great deal of work on the part of local managers Local conditions are frequently different from other places Corporate Culture – Methods that people and organizational culture use to enhance effective communication Build a strong corporate culture internationally Build a common technical or professional culture Build strong financial and planning systems

People and Organisational Culture The Expatriate manager – Typical leadership roles of the expatriate manager Role 1 – Customer representative – The expatriate manager must serve as a high-level contact with existing customers, prospects and suppliers in the local market Role 2 – Local champion – The expatriate manager must be a champion for the local office at headquarters Role 3 – Network coordinator – The expatriate management must provide linkages with the firm’s other offices in the worldwide network of the firm

Conflict Resolution Conflict Resolution Practices – Let country managers retain local brands and marketing budgets – Solicit country managers’ input for new-product development – Give country managers lead roles in global teams – Provide international transfers for country managers – Involve the country manager in the formulation of the global marketing strategy