Organizational Design and Control Chapter 18

Organizational Structure What is it? What does it demonstrate? Organizational Design Considerations Two concerns Departmentalize and take advantage of efficiencies Coordinate activities Four primary dimensions

Evolution of International Company International Business

Evolution of International Company Global Corporate Form- Products

Evolution of International Company Global Corporate Forms- Geographic Regions

Evolution of International Company Global Corporate Forms- Functional

Evolution of International Company Hybrid Organization Examples Matrix Organization Problems Matrix overlay Strategic Business Units Changes in Organizational Forms

Current Organizational Trends Virtual Corporation Outsourcing Modular Advantages Disadvantages Horizontal Benefits Corporate Survival in the 21st Century Dynamic network structure

Control What is it? Subsidiaries v. Affiliates Where are Decisions Made? Product and equipment Competence of subsidiary management and HQ reliance on it Size and age of the international corporation Benefiting the enterprise to detriment of subsidiary Subsidiary frustration

Where is Decision Made? Product and Equipment Standardize? Competence of Subsidiary Management and HQ Reliance on It Moving executives around Understanding host country conditions How far away is host country? Size and Age of the International Corporation Established Smaller/newer

Where is Decision Made? Benefiting the Enterprise to Detriment of Subsidiary Subsidiary detriment Moving production factors Which subsidiary gets the order? Multicountry production Whose books profit? Subsidiary Frustration Managers

Other Control Issues Joint Ventures and Subsidiaries less than 100% Lack of freedom and flexibility Control can be had Four methods Reporting Financial Technological Market opportunities Political and economic De-jobbing Definition Hierarchy implodes Traits Overall Control Issues