Chapter 8 Organization Structure and Control Systems.PPT

Chapter 8 Organization Structure and Control Systems PowerPoint by Kristopher Blanchard North Central University Organizational Structure There is no permanent organization chart for the world. . . . It is of supreme importance to be ready at all times to take advantage of new opportunities. —Robert C. Goizueta, Former Chairman and Ceo, Coca-Cola Company Evolution and Change in MNC Internationalization is the process by which a firm gradually changes in response to international competition, domestic market saturation, and the desire for expansion, new markets, and diversification. Structural Evolution Stages Model occurs when managers redesign the organizational structure to optimize the strategy’s changes to work, making changes in the firm’s tasks and relationships and designating authority, responsibility, lines of communication, geographic dispersal of units and so forth Basic Organizational Structures A number of basic structures exist that permit an MNC to compete internationally Structure must meet the need of both the local market and the home-office strategy of globalization Contingency approach Balances the need to respond quickly to local conditions with the pressures for providing products globally Most MNCs evolve through certain basic structural arrangements in international operations Organizational Consequences of Internationalization Basic Organizational Structures cont. Global Structural Arrangements Global Product Division Structural arrangement in which domestic divisions are given worldwide responsibility for product groups Global Area Division Structure under which global operations are organized on a geographic rather than a product basis Global Functional Division Structure which organizes worldwide operations primarily based on function and secondarily on product Matrix Organization Structure Structure that is a combination of a global product, area, or functional arrangement Typical ways that firms organize international acti