OB ch 7 -8

Globalization drivers

• Economies of Scale

  • Increasing size, lowering costs

• Economies of Scope

  • Number/variety of products, services, markets, countries

• Factors of Production

  • Lower cost resources, reduced government restrictions

4 stages of international evolution

1. domestic

2. international

3. multinational

4. global

Domestic- Strategic orientation

domestically oriented

Domestic - Stage of Development:

intial foreign involvement

Domestic - Structure

domestic structure plus export department

Domestic - market potential

moderate, mostly domestic

International - Strategic Orientation

export-oriented, multi domestic

International - Stage of Development

competitive positioning

International - Structure

Domestic structure plus international division

International - Market Potenital

Large, multi-domestic

Multinational - Strategic Orientation

multinational

Multinational - Stage of Development

explosion

Multinational - Structure

Worldwide geographic, product

Multinational - Market Potenital

Very large, multinational

Global - Strategic Orientation

Global

Global - Stage of Development

Gobal

Global - Structure

Matrix, trans-national

Global - Market Potenital

whole world

Joint Venture

Type of strategic alliance

• Separate entity created with two or more active firms as sponsors (e.g., competitors joining forces to compete globally)

Consortia

Type of Strategic Alliance

Groups of independent companies that join together to share skills, resources, access to one another’s markets, etc.

International Division

Geographic Division

Global Product Structure

Functional Structure

Global Geographic Structure

Geographical Structure

Global Matrix

Matrix

Global Coordination Mechanisms

Information linkages

Headquarters Planning

Rules and Plans

Specific Coordination Roles

Full time inegrators

How to build global capacity

The Challenge

• Increase complexity and differentiation 

• Need for integration 

• Knowledge transfer 

The mechanisms

• Global Teams

• Headquarters planning

• Expanded coordination roles

4 cultural Value Patterns

• Deal-focused versus relationship-focused

• Informal versus formal

• Rigid time versus fluid time

• Expressive versus reserved

Organization Life Cycle

1. entrepreneurial

2. Collectivity

3. formalization

4. elaboration

Crisis

1. Need for leadership

2. need fir delegation with control

3. need to deal with too much red tape

4. need for revitalization

Characteristics in Org Life Cycle

1. nonbureaucratic

2. Prebureaucratic

3. bureaucratic

4. very bureaucratic

Structure of Org Cycle

1. informal, one-person show

2. mostly informal, some procedures

3. ormal procedures, division of labor, specialties added

4. teamwork within bureaucracy, small-company thinking

Products or Services in Org Cycle

1. single product or service

2. major product or service with variations

3. line of products or services

4. multiple product or services lines

Reward and Control Systems in Org Cycle

1. personal, paternalistic

2. personal, contribution to success

3. impersonal, formalized systems

4. extensive, tailored to product and department

Innovation in Org Cycle

1. by owner-manager

2. by employees and managers

3. by separate innovation group

4. by institutionalized

   r&d

Goals in Org Cycle

1. Survival

2. Growth

3. internal stability, market expansion

4. reputation, complete organization

Top Management Style in Org Cycle

1. individualistic, entrepreneurial

2. charismatic, direction-giving

3. delegation with control

4. team approach, attack bureaucracy

Types of Control

Bureaucracy

• formal control (rules, standards, hierarchy)

Market

• econmic value, “market forces” (prices, competition, exchange relationship

Clan

• informal (social) control mechanisms (tradition, shared values and beliefs, trust)

Decline

1. Blinded (prompt action)

2. Inaction (correct action)

3. Faulty Action (effective reorganization)

4. Crisis

5. Dissolution

Organization Decline and Downsizing

1. Atophy - overly bureaucratized; can’t adapt to the environment

2. Vulnerability - can’t prosper in the current environment

3. Environmental decline or competition