Summary Daft chap.6

8/9/2019 Summary Daft chap.6

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Stages of International EvolutionStages of International Evolution

1. DOMESTIC

Initial entryinto foreign marketsthrough exporting

2. INTERNATIONAL

Companyhasa departmentor division forinternationalsales

Itis doing businessin morethanone country.

3. MULTINATIONAL

Well established overseas withsubsidiaries & facilities

Structureis probablyahybrid

4. GLOBAL

Corporate culturenotoriented toanyone country

Operationsaregeographically dispersed worldwide.

Extremelylargeand complexstructures

1. DOMESTIC

Initial entryinto foreign marketsthrough exporting

2. INTERNATIONAL

Companyhasa departmentor division forinternationalsales

Itis doing businessin morethanone country.

3. MULTINATIONAL

Well established overseas withsubsidiaries & facilities

Structureisprobablyahybrid

4. GLOBAL

Corporate culturenotoriented toanyone country

Operationsaregeographically dispersed worldwide.

Extremelylargeand complexstructures


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Common Ways to Go InternationalCommon Ways to Go International

Licensing

Joint Ventures Partnerships

Outsourcing

Acquisitions Mergers

Join theArmy

Licensing

Joint Ventures Partnerships

Outsourcing

Acquisitions Mergers

Join theArmy


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Organizational Designsfor Global AdvantageOrganizational Designsfor Global Advantage

Three major factors determine structure. ..

1. SCOPE (Extent of foreign operations) How many countries

What % of market share in each

What % of sales is foreign sales

2. SIZE of the organization. In terms of sales

Relative to the competition

3. NATUREOF PRODUCTS and or services Are they global(Coke)

Are they culturally tailored

Three major factors determine structure. ..

1. SCOPE (Extent of foreign operations) How many countries

What % of market share in each

What % of sales is foreign sales

2. SIZE of the organization. In terms of sales

Relative to the competition

3. NATUREOF PRODUCTS and or services Are they global(Coke)

Are they culturally tailored


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Global GeographicDivision StructureGlobal GeographicDivision Structure

CEO

Pacific

Division

European

Division

Latin

American

Division

Canadian

Division

Corporate

Staff

Long-term

Planning

Product

CoordinatorsGeographic divisions enable

Multi-domestic strategies


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DomesticHybrid Structurewith

International Division

DomesticHybrid Structurewith

International Division

ScientificProducts

Division

Research &

Development

Human

Resources

MedicalProducts

Division

Europe

(Sales)

Electrical

Products

Division

Corporate

Finance

International

Division

Brazil

(Subsidiary)

Mid East

(Sales)

Staff (Legal,

Licensing)

CEO

Some global product divisions

and some multi-domestic

products that require cultural

tailoring.


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Global Matrix StructureGlobal Matrix Structure

International

Executive

Committee

Power

Transformers

Germany NorwayArgentina/

Brazil

Spain/

Portugal

Transportation

Industry

Business

Areas

Country Managers

Local

Companies

Balances product interests of both product standardization and

geographical localization.


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Transnational ModelTransnational Model

Nohierarchy to speak of except withinsubsidiaries

No one subsidiary canhave an impact

without coordination and integration amongother subsidiary managers.

Alliances are established to facilitate change.

Gives autonomy to the subsidiaries

Makes subsidiaries more flexible andresponsive to local/regional needs.

Nohierarchy to speak of except withinsubsidiaries

No one subsidiary canhave an impact

without coordination and integration amongother subsidiary managers.

Alliances are established to facilitate change.

Gives autonomy to the subsidiaries

Makes subsidiaries more flexible andresponsive to local/regional needs.


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Transnational Model of

Organizations

Transnational Model of

Organizations Assets and resources are dispersed worldwide into

highly specialized operations that are linkedtogether through interdependent relationships.

Structures are flexible and ever-changing.

Subsidiary managers initiate strategies andinnovations that become strategy for thecorporation as a whole.

Unification and coordination are achievedprimarily through corporate culture (sharedvisions and values), and management style ratherthan through formal structures and systems

Assets and resources are dispersed worldwide intohighly specialized operations that are linkedtogether through interdependent relationships.

Structures are flexible and ever-changing.

Subsidiary managers initiate strategies andinnovations that become strategy for thecorporation as a whole.

Unification and coordination are achievedprimarily through corporate culture (sharedvisions and values), and management style ratherthan through formal structures and systems


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MatchingOrganizational Structure toInternational Advantage

MatchingOrganizational Structure toInternational Advantage

Global Geographic

StructureMulti-domesticHighLow

Global Matrix

Structure

Globalization and

Multi-domesticHighHigh

Global Product

StructureGlobalizationLowHigh

International

DivisionExportLowLow

StructureStrategy

And Forces forNational

Responsivenessare . . .

When Forcesfor GlobalIntegration

are . .


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Doing Business InternationallyDoing Business Internationally

Saksplanned to open a store inChina in timefor the BeijingOlympics but, due to the

bureaucratic red tape,permits, and otherlegal issues, the games were over beforeconstruction could even begin.

Bertlesmann,Europes largest magazine

publisher, tried for decades to extend theirsuccess into the U.S., but eventually sold offtheir U.S. assets as a billion dollarexperiment gonehorribly wrong.

Saksplanned to open a store inChina in timefor the BeijingOlympics but, due to the

bureaucratic red tape,permits, and otherlegal issues, the games were over beforeconstruction could even begin.

Bertlesmann,Europes largest magazine

publisher, tried for decades to extend theirsuccess into the U.S., but eventually sold offtheir U.S. assets as a billion dollarexperiment gonehorribly wrong.

Documents

Summary Daft chap.6