国际企业管理
7
Organizational Designs for
Multinational Companies
跨国公司组织设计
国际企业管理 ch7
朱吉庆
博士 讲师
harveyzjq@126.com
Learning Objectives
• Understand the components of organizational
design
• Know the basic building blocks of organization
structure
• Understand the structural options for
multinational companies
• Know the choices multinationals have in the use
of subsidiaries
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Learning Objectives
• See the links between multinational strategies
and structures
• Understand the basic mechanisms of
organizational coordination and control
• Know how coordination and control mechanisms
are used by multinational companies
• Understand the need for knowledge
management systems within organizations
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Organizational Design
• How organizations structure subunits and
coordination and control mechanisms to achieve
strategic goals
• Basic questions:
- How to divide work among the organization’s subunits?
- How to coordinate and control the efforts of the units
created?
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Nature of Organization Design
• In small organizations, there is little reason to
divide work
- Everyone does the same thing and everything
• As organizations grow, there is a need to divide
work and the organization
• There is no one best organizational design
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The Basic Functional Structure
• Departments perform separate business
functions such as marketing or manufacturing
• Simplest of organizations
• Most smaller organizations have functional
structures
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Exhibit 8.1: A Basic Functional Structure
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The Basic Functional Structure
• Works best when organization has:
-
Few products
Few locations
Few types of customers
A stable environment
Routine technology
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The Basic Product and Geographic
Structures
• Product structure: departments or subunits
based on different product groups
• Geographic structure: departments or subunits
based on geographic regions
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The Basic Product and Geographic
Structures (cont.)
• Usually less efficient than the functional
organization
• Allows a company to serve customer needs that
vary by region or product
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Exhibit 8.2: Product Structure
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Exhibit 8.3: A Basic Geographic Structure
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The Basic Product and Geographic
Structures
• Managers choose product structures when:
 Product or an area sufficiently unique to require
focused functional efforts on one type of product or
service
• Hybrid structure: mixes functional, geographic,
and product units
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Organizational Structures to Implement
Multinational Strategies
• When company first goes international, it seldom
changes structure.
- Passive exporter
• Licensing has little impact on domestic
structures.
• However, when international sales become more
central, structures need to be changed.
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Export Department
• Coordinates and controls a company’s export
operations
• Export department
- Is created when exports become significant
- Deals with international sales of all products
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Exhibit 8.4: A Functional Structure
with an Export Department
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Foreign Subsidiaries
• Subunit of the multinational company that is
located in another country
• Types of foreign subsidiaries
- Minireplica subsidiary: smaller version of the parent
company
 Uses the same technology and producing the
same products as the parent company
- Transnational subsidiary: has no companywide form or
function
 Each subsidiary contributes what it does best
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Foreign Subsidiaries
• Many subsidiaries are neither minireplicas nor
transnationals
• May take different forms or functions
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Foreign Subsidiaries
• Multinationals choose the mix of functions based
on:
- The firm’s multinational strategy or strategies
- The subsidiaries’ capabilities and resources
- The economic and political risk of building and
managing a subunit in another country
- How the subsidiaries fit into the overall multinational
organizational structure
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International Division
• Larger and has greater responsibilities
compared to the export department
• Responsible for managing exports, international
sales, and foreign subsidiaries
• Usual step after export department
• Deals with all products
• Manages overseas sales force and
manufacturing sites
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Exhibit 8.5: An International Division
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Organizational Structures to Implement
Multinational Strategies
• Reasons to abandon the international division
- Diverse products overwhelm capacities of
multinational
- Not close enough to local markets
- Cannot take advantage of global economies of scale
or global sources of knowledge
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Organizational Structures to Implement
Multinational Strategies
• Several options available to deal with these
shortcomings
-
Worldwide product structure
Worldwide geographic structure
Matrix structure
Transnational-network structure
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Worldwide Geographic Structure
• Has geographical units representing regions of
the world
- Prime reason is to implement a multidomestic or
regional strategy
- Organizational design with maximum geographic
flexibility
- Separate divisions for large market countries
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Exhibit 8.6: Royal Vopak Geographic
Structure
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Worldwide Product Structure
• Worldwide product structure
- Gives product divisions responsibility to produce and
sell their products or services throughout the world
- Implements strategies that emphasize global products
- Provides an efficient way to organize and centralize
the production and sales of similar products
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Exhibit 8.7: Worldwide Product Structure
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Hybrids
• Both worldwide product structure and worldwide
geographic structure have advantages and
disadvantages
- Product structure: supports global products
- Geographic structure: emphasizes local adaptation
• Multinationals often want both abilities
• Use hybrids
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Front-back Hybrid Structure
• The front side has units based on geography to
provide a multidomestic or regional focus
• The backside has units based on product groups
to capture global economies of scale in R&D
and production
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Exhibit 8.8: Tetra Pak’s Front-Back Hybrid
Structure
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Worldwide Matrix Structures
• Symmetrical organization with equal emphasis
on
- Worldwide product groups and
- Regional geographical divisions
• Geographic divisions focus on national
responsiveness and product divisions focus on
finding global efficiencies
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Worldwide Matrix Structures
• Balances the benefits produced by area and
product structures
• Creates equal lines of authority for products and
areas
- Works best with near equal demands from both sides
• Requires extensive resources for
communication and coordination
• Requires middle and upper level managers with
good human relations skills
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Exhibit 8.9: Worldwide Matrix
Organization
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Matrix Structures
• Problems emerging with worldwide matrix
structures
- Slow decision making process
- Too bureaucratic
- Too many meetings and too much conflict
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Matrix Structures (cont.)
• Result
- Some companies have abandoned their matrixes and
returned to product structures
- Other companies have redesigned their matrix
structures to be more flexible with speedier decision
making
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The Transnational-Network Structure
• Newest solution to the complex demand of being
locally responsive and taking advantage of
global economies of scale
• Combines functional, product, and geographic
subunits
- Dispersed subunits
- Specialized operations
- Interdependent relationships
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The Transnational-Network Structures
• Has no symmetry or balance in its structural
form
• Resources, people, and ideas flow in all
directions
• Nodes or centers in the network coordinate
product, functional, and geographic information
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The Transnational-Network Structures
• Philips divides the world into three groups
 Key countries: such as the Netherlands and the United States
produce for local and world markets and control local sales
 Large countries: such as Mexico and Belgium have some local
and worldwide production facilities and local sales
 Local business countries: smaller countries that are primarily
sales units and that import products from the product divisions’
worldwide production centers in other countries
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Exhibit 8.10: Geographic Links in the
Philips Transnational Structure
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Exhibit 8.11: Product Links in the Same
Organization
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Components of the TransnationalNetwork Structure
1.Dispersed subunits: subsidiaries located
anywhere where they can most benefit the
company
2.Specialized operations: subunits specializing in
particular product, research areas, or marketing
areas
3.Interdependent relationships: continuous
sharing of information and resources by
dispersed and specialized subunits
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Metanational Structure
• Large entrepreneurial multinational
 Can tap into pockets of innovation, technology, and
markets located around the world
• Develops extensive systems to encourage
organizational learning and entrepreneurial
activities
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Metanational Characteristics
• Nonstandard business formulas for any local
activity
• Looking to emerging markets as sources of
knowledge and ideas
• Creating a culture supporting global learning
• Extensive use of strategic alliances to gain
knowledge for varied sources
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Characteristics of Metanationals
• High levels of trust between partners to
encourage knowledge sharing
• Centerless organization that moves strategic
functions away from headquarters to major
markets
• Decentralization of decision making to managers
who serve key customers and strategic partners
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Micro-Multinational Company
• Micro-multinational companies: smaller
organizations that take advantage of the Web to
operate globally from Day One
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Micro-Multinational Company
• Characteristics
- They operate as born-global firms from the day they
are founded, and they operate everywhere around
the world
- They are willing to start operations and hire workers
from around the world and from where it makes the
most sense to do so
- They are more likely to use various state-of-the-art
technology for communication purposes
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Multinational Strategy and Structure: An
Overview
• Most companies support early
internationalization efforts with export
department
• Depending on globalization strategy, they evolve
into product or geographic structure
• Pressure for local adaptation and global
efficiencies result into matrix or transnationalnetwork
• No company reaches any pure form—use
hybrids
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Exhibit 8.12: Multinational Strategy,
Structure, and Evolution
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Control Systems
• Control system: helps link the organization
vertically, up and down the organizational
hierarchy
• Basic functions of control system
- Measure or monitor the performances of subunits
- Provide feedback to subunit managers regarding the
effectiveness of their units
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Coordination Systems
• Coordination system: horizontal organizational
links
- Provide information flows among subsidiaries
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Design Options for Control Systems
• Four types of control systems
-
Output control system
Bureaucratic control system
Decision-making control
Cultural control system
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Output Control Systems
• Assesses the performance of a unit based on
results, not on the processes used to achieve
these results
- Profit center: unit controlled by its profit or loss
performance
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Bureaucratic control system
• Focuses on managing behaviors within the
organization
- Budgets: financial targets for expenditures
- Statistical reports: information to top management
about nonfinancial outcomes
- Standard operating procedures (SOPs): rules and
regulations of appropriate behavior
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Control and Coordination Systems
• Decision-making control: level in the
organizational hierarchy where managers have
the authority to make decisions
• Cultural control system: uses organizational
culture to control behaviors and attitudes of
employees
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Exhibit 8.13: Use of Control Mechanisms in
Multinational Organizational Structures
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Design Options for Coordination Systems
• Textual communication: e-mail, memos, and
reports
• Direct contact: face-to-face interaction of
employees
• Liaison roles: part of a person’s job in one
department to communicate with people in
another department
• Task forces: temporary teams created to solve a
particular organizational problem
• Full-time integrators: cross-unit coordination is
the main job responsibility
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Teams
• Teams: permanent unit of the organization
- Global virtual teams: groups of people from different
parts of the world who work together by using
information and communication technologies such as
intranets, web meetings, WIKI’s, e-mails and instant
messaging
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Problems with Global teams
• Team members’ native languages are different
• Differences in cultural background
• Global teams dominated by headquarters’
perspectives and experiences
• Major challenges in building team collaboration
• Challenges in meeting programmatic objectives
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Steps to ensure the global teams
collaborate to function effectively
• Build relationships and trust
• Devote significant attention to project planning
and hold project progress meetings regularly
• Cultural, language, and active-listening training
• Be aware of team-development stage
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Knowledge Management
• Knowledge management: refers to the systems,
mechanisms, and other design elements of any
organization to ensure that the right form of
knowledge is available to the right individual at
the right time
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Knowledge Management
• Types of knowledge
 Explicit form:found in records or other repositories of
information
 Tacit knowledge: represents the knowledge that
usually resides within employees and is dependent on
the organization’s culture and context
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Exhibit 8.14: Knowledge Management Barriers
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Knowledge Management: Steps to
Develop Successful System
• Identify/support knowledge activists
• Make knowledge management part of the
general strategy
• Provide financial and human resources support
• Emphasize importance of communication
• Celebrate success
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Conclusion
• Good strategies do not guarantee success –
also need good implementation
• Need the right organizational designs to carry
out strategies
• Chapter reviews basic organizational structures
and discusses international organizational
designs and structures
• Chapter also discusses knowledge management
systems
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