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chapter 14 international organization design and control Chapter Objectives 1 Define and discuss the nature of international organization design and identify and describe the initial impacts of international business activity on organization design Identify and describe five advanced forms of international organization design and discuss hybrid global designs Chapter Objectives 2 Identify and describe related issues in global organization design Explain the general purpose of control and the levels of control in international business Describe how international firms manage the control function Organization Design Organization design (or organization structure) is the overall pattern of structural components and configurations used to manage the total organization. Factors Affecting Design Functions of Firm Design Allocates organizational resources Assigns tasks to its employees Informs employees about firm’s rules, procedures, and expectations Collects and transmits information Types of Knowledge Affecting Design Forms of Global Organization Design Managerial Philosophies Affecting Design Global Product Design The global product design assigns worldwide responsibility for specific products or product groups to separate operating divisions within a firm. Figure 14.1 Samsung’s Global Product Design Global Product Design Advantages Managerial expertise Production efficiencies Production flexibilities Flexible response to change Marketing flexibility Disadvantages Unnecessary duplication Coordination and cooperation difficult The Danone Group uses a global product design. Global Area Design The global area design organizes the firm’s activities around specific areas or regions of the world. Figure 14.2 Global Area Design Disadvantages of Global Area Design Global Functional Design The global functional design calls for a firm to create departments or divisions that have worldwide responsibility for the common organizational functions—