Organizational Design and
Control
Chapter 18
Organizational Structure
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What is it?
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What does it demonstrate?
Organizational Design
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Considerations
Two concerns
Departmentalize and take advantage of efficiencies
 Coordinate activities
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Four primary dimensions
Evolution of International Company
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International Business
Evolution of International Company
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Global Corporate Form- Products
Evolution of International Company
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Global Corporate Forms- Geographic Regions
Evolution of International Company
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Global Corporate Forms- Functional
Evolution of International Company
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Hybrid Organization
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Matrix Organization
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Examples
Problems
Matrix overlay
Strategic Business Units
Changes in Organizational Forms
Current Organizational Trends
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Virtual Corporation
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Modular
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Advantages
Disadvantages
Horizontal
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Outsourcing
Benefits
Corporate Survival in the 21st Century
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Dynamic network structure
Control
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What is it?
Subsidiaries v. Affiliates
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Where are Decisions Made?
Product and equipment
 Competence of subsidiary management and HQ
reliance on it
 Size and age of the international corporation
 Benefiting the enterprise to detriment of subsidiary
 Subsidiary frustration
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Where is Decision Made?
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Product and Equipment
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Competence of Subsidiary Management and HQ
Reliance on It
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Standardize?
Moving executives around
Understanding host country conditions
How far away is host country?
Size and Age of the International Corporation
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Established
Smaller/newer
Where is Decision Made?
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Benefiting the Enterprise to Detriment of
Subsidiary
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Subsidiary detriment
Moving production factors
Which subsidiary gets the order?
Multicountry production
Whose books profit?
Subsidiary Frustration
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Managers
Other Control Issues
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Joint Ventures and Subsidiaries less than 100%
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Lack of freedom and flexibility
Control can be had
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Reporting
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Financial
Technological
Market opportunities
Political and economic
De-jobbing
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Four methods
Definition
Hierarchy implodes
Traits
Overall Control Issues