1. International Business, 8th Edition
Griffin & Pustay
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2. Copyright © 2015 Pearson Education, Inc.
Learning Objectives
Define and discuss the nature of international organization design, and identify and describe the initial influence of international business activity on organization design
Identify and describe five advanced forms of international organization design and discuss hybrid global designs
Identify and describe key related issues in global organization design
Explain the general purpose of control and the levels of control in international business
Describe how international firms manage the control function
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3. The Nature of International Organization Design
Allocate Organizational Resources
Assign Tasks
Provide Information
Collects and Transmits Information
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4. Global Organization Designs
Global Design
Area Knowledge
Product Knowledge
Functional Knowledge
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5. Global Organization Designs (Cont.)
Common Forms
Product Design
Area Design
Functional Design
Customer Design
Matrix Design
Managerial Philosophy
Ethnocentric
Polycentric
Geocentric
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6. Related Products Unrelated Products Global Product Design
M-Form (Multidivisional)
Unrelated Products
H-Form (Holding)
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7. Global Product Design (Cont.)
Advantages
Expertise
Efficiencies
Global Marketing
Geocentric Corporate Philosophies
Disadvantages
Expensive Duplication
Knowledge Development
Coordination Levels
Corporate Learning
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8. Copyright © 2015 Pearson Education, Inc.
Global Area Design
Advantages
Marketing-Driven Strategy
Brand-Name Reputation
Expertise about the Local Market
Disadvantages
May sacrifice cost efficiencies
May slow diffusion of technology
Results in duplication of resources
Raises costs of coordination
Impedes global product planning
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9. Global Functional Design
Advantages
Transfer Expertise
Centralize Control
Focus on Functions
Disadvantages
Limited Products or Customers
Difficult to Coordinate
Duplication of Resources
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10. Global Customer Design
Opportunities
Serve Diverse Customers
Focus Marketing
Approach
Challenges
Duplication of Efforts
Coordination Issues
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11. Copyright © 2015 Pearson Education, Inc.
Global Matrix Design
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12. Global Matrix Design (Cont.)
Advantages
Organizational Flexibility
Coordination and Comunication
Disadvantages
Limited use in firm with few products
Limited use in fairly stable markets
Involves more than one manager
Creates a paradox in authority
Tends to promote compromises
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13. Copyright © 2015 Pearson Education, Inc.
Hybrid Global Designs
Size
Strategy
Technology
Environment
Culture
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14. Related Issues in Global Organization Design
Centralization versus Decentralization
Role of Subsidiary Boards of Directors
Coordination in the Global Organization
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15. Centralization versus Decentralization
Decision Making Focus
Local Market
Response
Overall Needs of the Firm
Corporate Headquarters
Lower
Higher
Local Subsidiary
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16. Coordination in the Global Organization
Organizational Hierarchy
Rules and Procedures
Ad Hoc Coordination Techniques
Informal Coordination Mechanisms
Informal Management Network
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17. The Control Function in International Business
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18. Copyright © 2015 Pearson Education, Inc.
Strategic Control
Strategic Control
Formulate Strategy
Implement Strategy
Role of Strategic Control
Financial Resources
Inventory Management
Exchange Rate Fluctuations
Joint Ventures and Strategic Alliances
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19. Organizational Control
Responsibility Center Control
Generic Organizational Control
Planning Process Control
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20. Copyright © 2015 Pearson Education, Inc.
Operations Control
Processes
Performance
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21. Managing the Control Function in International Business
Effectively Manage Control
Establishing International Control Systems
Essential Control Techniques
Behavioral Aspects of International Control
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22. Establishing International Control Systems
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23. Essential Control Techniques
Accounting Systems
Policies, Procedures, Rules and Regulations
Performance Ratios
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24. Behavioral Aspects of International Control
Resistance to Control
Reaction to Over-Control
Inappropriate Focus
Increased Accountability
Overcoming Resistance to Control
Participation
Accountability
Diagnostics
Culture
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