International Business Environments and Operations

Part 5 Global Strategy, Structure, and Implementation

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Chapter 15

The Organization of International Business

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Chapter Objectives
Profile the evolving understanding of organizing a company for international business Describe the antecedents and features of traditional structures Describe the antecedents and features of contemporary structures Study the systems used to coordinate and control international activities Profile the role and characteristics of organization culture Link the ideas of strategy and organization in the international company
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Organizing Operations
Organizing is the process of creating the structure, systems, and culture needed to implement the companys strategy.

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Factors Affecting Organizing Operations

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Change: The Critical Factor

Changes in the market environment and nature of work push
managers to rethink how they organize their workplace. Trends inducing change:
Expansion of International Business Importance of Knowledge as a Competitive Advantage The Internet as a Design Standard Workplace Adjustments Managerial Adjustments Changing Social Contract Global Credit Crunch and Rising Unemployment

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Organization Structure
Structure: formal arrangement of jobs within a company that specifies roles, responsibilities, and relationships Vertical Differentiation Horizontal Differentiation

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Vertical Differentiation
Centralization versus Decentralization in Organizational Design Centralization: degree to which high-level managers make strategic decisions and delegate them to lower levels for implementation. Decentralization: degree to which lowerlevel managers make and implement strategic decisions.
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Horizontal Differentiation
Functional Structure
Advantages and Disadvantages

Divisional Structure
International Division Product Division Geographic Division

Matrix Structure
Unity of Command Principle

Mixed Structure
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Contemporary Structures
Network Structure Virtual Organization Pitfalls of Contemporary Structures

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Coordination and Control Systems

Approaches to Coordination: Standardization Plan Mutual Adjustment Control Methods: Market Bureaucratic Clan
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Control Tools
Reports Visits to Subsidiaries Cost and Accounting Comparisons Evaluative Metrics Information Systems

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Organization Culture
The Importance of Culture
Culture and Values Culture and the Value Chain

Challenges and Pitfalls Organization Culture and Strategy

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Future: The Role and Rise of Corporate Universities

Managers believe companies must purposefully develop shared values Worldwide, more than 1,000 new corporate universities have begun operations Corporate universitiesphysical and virtual institutions that:
Lead training efforts Facilitate learning Help upgrade competencies While advocating the philosophical ideals of the companys culture
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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

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