1. Bahçeşehir University
Social Science Institutions
Ph D. Business Program
Management & Organization
Organizational Theory
Prof. Dr. Atilla DİCLE
Designing Organizations for the International Environment
Prep. by: İlhan ÇİFTÇİ

2. Industrial Revolution & Globalization
Bahçeşehir University - Organizational Theory

3. Bahçeşehir University - Organizational Theory
Orientation Stages
Global
Orientation
Multinational
Orientation
International
Orientation
Domestic Orientation
Bahçeşehir University - Organizational Theory

4. Four Stages of Int’l Evolution
I - Domestic
II - International
III - Multinational
IV - Global
Strategic Orientation
Domestically oriented
Export – oriented multi domestic
Multinational
Global
Stage of Development
Initial foreign involment
Competitive positioning
Explosion
Structure
Domestic structure, plus export department
Domestic structure, plus international division
Worldwide geographical product
Matrix, transnational
Market Potential
Moderate, mostly domestşc
Large, multidomestic
Very large, multinational
Whole world
Bahçeşehir University - Organizational Theory

5. Fortune 500 Investigation - 2006
The number of US companies was 189 in the 500 biggset company. #
Country
Revenue (billion $)
# of Firm in Global Market 1 US
5.841
189 2
Japan
2.181 82 3
France
1.246 37 4
Britain
1.079 35 5
Germany
1.363 34 6
China
358 15 7
Canada
185 13 8
Netherlands
388 12 9
Switzerland
382 10
South Korea
266 11
Bahçeşehir University - Organizational Theory

6. Maps - The World US & Turkey
Bahçeşehir University - Organizational Theory

7. Bahçeşehir University - Organizational Theory
In accordance to revenue basis,Tüpraş is the biggest company in Turkey and the number of Tüpraş is 108 in an US market
Fortune 500 Investigation
Bahçeşehir University - Organizational Theory

8. To Expand Int’l Market Motivators
Economies of Scale
Indutrial Revolution
Innovations
Technology
...
Economies of Scope
Diversification of Products
Increase in product quantity
Expand regions, country and market
Low Cost Production Factors
Invest raw materials with a lowest possible cost
Get opportunity to obtain scare
Obtain source of cheap labor
Bahçeşehir University - Organizational Theory

9. Bahçeşehir University - Organizational Theory
Strategic Alliances
Strategic Alliance is one of the way of getting involved in international trade
Licensing
Joint Ventures
Consortia
Source: ....
Bahçeşehir University - Organizational Theory

10. Strategic Alliances Benefits
Achieve production cost savings
through economies of scale
Share complementary technological
strengths
Distrubute new products
Service through anaother country’s
distrubution channels
Bahçeşehir University - Organizational Theory

11. Strategic Alliances SamplesJV
Pharmaceutical
Merck,
Eli Lilly,
Pfizer,
Warner Lambert
JV,
Gold Exploration
Robex Resources (Canada)Inc. &
Geo Services International (Mali)
Jonit Ventures,
Consortias JV
Banking Sector
ICiCI (India) & Prudential (UK)
(Asset Management)
CONSROTIA
Airbus  French, British,German vs Boeing (US)
Source: ....
Bahçeşehir University - Organizational Theory

12. Bahçeşehir University - Organizational Theory
Model for Global vs Local Opportunities
Decision between the Globalization vesrsus a multidomestic global strategy
Whether the manager want each global affiliate to act autonomously or whether activities should be standardized across countries
Globalization strategy means that product design, manufacturing and marketing strategy are standardized throught the world (Coca – Cola  only the advertising and marketing need to be tailored for different regions)
A multidomestic strategy menas that competition in each counrty is handled independently of competition in other countries (Dominos - - > The compnay has int’l restaurants and offers 100 different pizza pies)
Bahçeşehir University - Organizational Theory

13. Model to Fit Org. Structure to Int’l Advantages
High
Globalization Staretegy:
Global
Product
Structure
Both Globalization and Multi Domestic Strategy:
Matrix
Export Strategy:
International
Division
Multi Dpmestic Strategy:
Geographic
Forces for
Global
Integration
Low
Low
Forces for National Responsiveness
High
Bahçeşehir University - Organizational Theory

14. Bahçeşehir University - Organizational Theory
Int’l Divison & Domestic Division
Domestic Division:
Typicially Orginized along functional or product lines
International Divison:
Orginized according to geographical interest
Has its own hierarchy to handle business (licensing, joint ventures) in various countries
Selling the products and services and prodcuts created by the domestic division
Openning subsidiary plants
Moving the organization into more sophisticated international operations
Bahçeşehir University - Organizational Theory

15. Domestic Hybrid Structure with Int’l Division
CEO
Human
Resources
Research &
Development
Corporate
Finance
Europe
Sales
Mideast
(Sales)
Electircial
Product
Div.
Scientific
Product
Div.
Medical
Product
Div.
Internatinal
Division
Brazil
(Subsidiary)
Staff
(Legak,
Licensing)
Bahçeşehir University - Organizational Theory

16. Global Product Divison Structure
The Product based structure
works best when a division handles products that are tecnology similar and can be standarized for marketing worldwide
All Divison Manager is responsible
Controlling
Organizing
Distrubition of product
Planning
Issues
Successful global Division Structure
Bahçeşehir University - Organizational Theory

17. Global Geographical Divison Structure
Divides the world into geographical
regions
Each geographical divison reporting
to CEO
Each Division has full control of
functional activities wtihin a geog. area
Difficult to transfer new domestic
tech. and products, (each div.
thinks what it need)
Source: ....
Bahçeşehir University - Organizational Theory

18. Global Matrix Structure
It provides a way to achieve vertical and horizontal coordination simultaneously along two dimensions
The matrix works best when pressure for decision making balances the interests of both product standarzation and geographical localization and when coordination to share resources is important
Bahçeşehir University - Organizational Theory

19. Global Matrix Structure
Bahçeşehir University - Organizational Theory

20. Building Global Capabilities
The Global Organizational Challenge
Increased Complexity and Differenciation
Need for Integration
Transfer of Knowledge and Innovation
Global Coordination Mechanisms
Global Teams
Headquarters Planning
Expand Coordination Roles
Bahçeşehir University - Organizational Theory

21. Cultural Differences in Coordination and Control
National Value Systems
Three National Approaches to Coordination and Control
Centralized Coordination in Japannese Companies
European Firms’ Decentralized Approach
The U.S.
Bahçeşehir University - Organizational Theory

22. Questions and Explanations
Bahçeşehir University - Organizational Theory