Ch 11 Organizing Intl Operations

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Ch 11 Organizing Intl Operations Basic Org.
Structures 1. Intl Div - One division handles
all intl operations Advantage - Unified
approach to IB under top magt Disadvantage - 2
camps with diff goals, ask for resources - RD is
domestic-oriented
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2. Global Product Div Advantage - Good for
managing product diversity - Coordinate functions
based on products Drawbacks - Duplicate
facilities and personnel 3. Global Area Div S
Cater to local needs, rapid decisions W Hard to
reconcile a product geographically
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4. Global Functional Div S Focus on
functional expertise Tight centralized
Control W Coordination/communication
problems 5. Mixed Structure e.g. Global Matrix
Structure Sony S Create a specific design to
meet needs W Coordinating too many groups
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Transnational Network Structure
Combine elements of other designs But rely
on a network to link sub 3 Components -
Dispersed Subunits sub located anywhere -
Specialized Operations Activities based on
special expertise - Interdependent Relationship
Sharing
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Other Org. Arrangements 1. M As 6T in a
year - major MNCs are doing MAs 2. JV and
Strategic Alliances - A senior MNC and a local
partner e.g. CALICA, a JV of US/Mexico - JV of
MNCs in industrialized countries e.g. JV of
Coca-Cola and PG
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• - Mixed JV between private firms and govt
• e.g. China Intl Capital Corp, JV of 4
• - Alliances for a variety of purposes
• Starbucks and Meida in Beijing mkt access
• ATT and NEC share core competence
• Philips/Matsushita establish ind. standards
• Boeing and Japanese firms share fixed costs

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• Risks and Challenges with JV and Alliances
• - One exploits another, one way gaining
• - Give competitors a low cost route
• - Loss of the benefits from learning by doing
• - Divided loyalties and boundaries
• - Different environments, magt practices
• - Conflicts of interest and priorities

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3. Keiretsus - A corporate relationship linking
J firms Vertically, or Horizontally - Being
bound by Cross-ownership Long-term business
dealings Interlocking directorates Social
ties e.g. Mitsubishi Group - Mitsubishi Bank
- Mitsubishi Corp., a trading co. - Mitsubishi
Heavy Industries
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US Type of Keiretsus Ford RD joins 8
consortia Production has equity in 3
firms Assembly has ownership in Europe, S. Am,
Asia Fin. Service has its own 7 units Mktg
Ford and Mazda buy from each other
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4. E-Network Form of Org use e-lancers Nokia
entered US display mkt, 5 employees
Subcontract tech support, logistics,
sales/mktg Topsy Tail 80m revenue, 3
employees Never touch its products in the
supply chain Rise of multinational university
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Role of Org. Synergy - Positive synergy
effect - Emerging trends to make synergy
work Role of IT in Organizing e.g.
Seven-Eleven Japan Use IT to monitor and meet
needs Use of Subsidiary Boards of Directors
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Org. Characteristics of MNCs Formalization
- Objective org. chart, job descriptions,
operating instructions, procedure manuals -
Subjective vague goals, use values Horizontal
vs. Vertical Specialization Centralization vs.
Decentralization