Bài giảng International Business - Chapter 14 The Organization of International Business

International Business 9eBy Charles W.L. HillMcGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter 14The Organization of International Business What Is Organizational Architecture?Organizational architecture is the totality of a firm’s organization including Organizational structureControl systems and incentivesProcesses, organizational culture, and peopleTo be the most profitablethe elements of the organizational architecture must be internally consistentthe organizational architecture must fit the strategythe strategy and architecture must be consistent with each other, and consistent with competitive conditionsWhat Is Organizational Architecture?Organizational ArchitectureWhat Are The Dimensions Of Organizational Structure?Organizational structure has three dimensions Vertical differentiation - location of decision-making responsibilities within a structure Centralized decision-makingDecentralized decision-makingHorizontal differentiation - formal division of the organization into sub-unitsIntegrating mechanisms - the mechanisms for coordinating sub-unitsWhy Is Horizontal Differentiation Important?Initially, most firms have no formal structure, but as they grow, develop a functional structureFirms may switch to a product divisional structure where each division is responsible for a distinct product lineWhen firms expand internationally, they often group all of their international activities into an international divisionWhat Is A Functional Structure?A Typical Functional StructureWhat Is A Product Divisional Structure?A Typical Product Divisional StructureWhat Is An International Divisional Structure?One Company’s International Divisional StructureWhat Happens Next?Firms that continue to expand will move to either a Worldwide product divisional structure - adopted by firms that are reasonably diversifiedWorldwide area structure - favored by firms with low degree of diversification and a domestic structure based on functionThe global matrix structure – tries to minimize the limitations of the worldwide area structure and the worldwide product divisional structureWhat Is A Worldwide Product Division Structure?A Worldwide Product Divisional StructureWhat Is A Worldwide Area Structure?A Worldwide Area Structure What Is The Global Matrix Structure?A Global Matrix StructureHow Does Organizational Structure Change Over Time?The International Structural Stages ModelHow Can Subunits Be Integrated?Regardless of the type of structure, firms need a mechanism to integrate subunitsMany firms use informal integrating mechanismsa knowledge networkFormal integrating mechanisms includePersonal controlsBureaucratic controlsOutput controlsCultural controlsWhat Is The Link Between Control, Incentives, And Strategy? Interdependence, Performance Ambiguity, and the Costs of Control for the Four International Business StrategiesWhat Is Organizational Culture?Organizational culture - the values and norms that employees are encouraged to followEvolves fromfounders and important leadersnational social culturethe history of the enterprisedecisions that resulted in high performanceManagers in companies with a “strong” culture share a relatively consistent set of values and norms that have a clear impact on the way work is performedWhat Is The Link Between Strategy And Architecture? Firms pursuing a localization strategy focus on local responsivenessFirms pursuing an international strategy create value by transferring core competencies from home to foreign subsidiariesFirms pursuing a global standardization strategy focus on the realization of location and experience curve economiesFirms pursuing a transnational strategy focus on simultaneously attaining location and experience curve economies, local responsiveness, and global learningWhat Is The Link Between Strategy And Architecture? A Synthesis of Strategy, Structure, and Control SystemsHow Can Firms Implement Organizational Change?For a firm to succeedThe firm’s strategy must be consistent with the environment in which the firm operatesThe firm’s organization architecture must be consistent with its strategyTo implement organization changeUnfreeze the organization through shock therapyMove the organization to a new state through proactive change in architectureRefreeze the organization in its new state