IAF605 week 12 chapter 15 the organization of international business
description
Transcript of IAF605 week 12 chapter 15 the organization of international business
IAF 605 - International Business Management
Week 12
The Organization of International Business
Reminder
Agenda
Infosys case
Organizational Structures
break
Coordination and Control Systems
Organizational Culture and Strategy
Questions
Consider the options presented in the chapter regarding structural design, coordination and control, and corporate culture. Please profile the interplay among these within Infosys.
What do you think was the key event in the organizational evolution of Infosys? What do you think the Infosys organization will look like in 2015?
Can Infosys continue its historic growth in sales and employees and still retain its founding values? What approaches and tools would you recommend to do so?
What organizational problems do you think prove troublesome to executives at Infosys?
Given what you have read, do you think you would like to work for Infosys? Why or why not?
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
Chapter Objectives
Vertical Differentiation - the matter of how the company balances centralization versus decentralization of decision making
Centralization
• the degree to which high-level managers, usually above the country level, make strategic decisions and pass them to lower levels for implementation.
Decentralization
• the degree to which lower-level managers, usually at or below the country level, make and implement strategic decisions.
Decision making
• should occur at the level of the people who are most directly affected and have the most intimate knowledge about the problem.
Horizontal Differentiation - describes how the company designs its formal structure to perform three functions
Specify the total set of organizational tasks
Divide those tasks into jobs, departments, subsidiaries, and
divisions so the work gets done
Assign authority and authority relationships to make sure work gets
done in ways that support the company’s
strategy
See Table 15.1
page 562
Functional structure
International division structure
Product division structure
Geographic (area) division structure
Matrix division structure
Contemporary structures, like the network or virtual formats, arrange work roles, responsibilities, and relationships in ways that eliminate the horizontal, vertical, or external boundaries that block
the development of knowledge-generating and decision-making relationships
Source: http://www.flickr.com/photos/greg_scales/
Simplified Network Structure (p570) – core competencies stay in-house – everything else is outsourced
Image source: http://www.itechnews.net
Virtual Organization
Coordination and Control Systems
to prevent duplication of efforts
to ensure that headquarters managers do not withhold the best resources from the international operations
to include insights from anywhere in the organization
Source: http://www.flickr.com/photos/eschipul/
Coordination can take place via standardization, plan, and mutual adjustment
stan
dar
diz
atio
n sets universal rules and procedures that apply to units worldwide
enforces consistency in performance of activities in geographically dispersed units
pla
n requires interdependent units to meet common deadlines and objectives
mu
tual
ad
just
men
t requires managers to interact personally with counterparts (frequently)
Companies exercise control through:
• uses external market mechanisms to establish objective standards.
Market control
• emphasizes organizational authority and relies on rules and regulations.
Bureaucratic control
• uses shared values and ideals to moderate employee behavior.
Clan control
Source: http://www.flickr.com/photos/agroove/
Control Mechanisms
Reports
Visits to Subsidiaries
Cost and Accounting Comparisons
Evaluation Measurements
Information Systems
Organization Culture
The set of fundamental assumptions about the organization and its goals and practices that members of the company share
A system of shared values about what is important and beliefs about how the world works.
Importance of Culture - often shapes the strategic moves it considers.
Key features of a company’s organization
culture include:
• Values and principles of management.
• Work climate and atmosphere.
• Patterns of “how we do things around here.”
• Traditions.
• Ethical standards.
Challenges and Pitfalls
Managers from different countries often have values that differ from those endorsed by the company
People in an MNE often have slight exposure to the values held by senior managers
Evidence suggests that mixing national cultures on teams does not necessarily improve performance
Strategy and Organizational Culture in International Business (p581)
Homework
review Chapter 15
do quiz (Blackboard)
read Chapter 20 – Human Resources Management
read: Tel-Comm-Tek (TCT) p783-787