Global Coordination Mechanisms
advertisement
Bahçeşehir University Social Science Institutions Ph D. Business Program Management & Organization Organizational Theory Prof. Dr. Atilla DİCLE Designing Organizations for the International Environment Prep. by: İlhan ÇİFTÇİ 1 Industrial Revolution & Globalization Bahçeşehir University - Organizational Theory 2 Orientation Stages Domestic Orientation International Orientation Bahçeşehir University - Organizational Theory Multinational Orientation Global Orientation 3 Four Stages of Int’l Evolution I - Domestic II - International Domestically oriented Export – oriented Multinational multi domestic Global Stage of Initial foreign Development involment Competitive positioning Explosion Global Structure Domestic structure, plus export department Domestic structure, plus international division Worldwide geographical product Matrix, transnational Market Potential Moderate, mostly domestşc Large, multidomestic Very large, multinational Whole world Strategic Orientation III - Multinational Bahçeşehir University - Organizational Theory IV - Global 4 Fortune 500 Investigation - 2006 # Country 1 2 3 4 Revenue # of Firm in (billion $) Global Market US Japan France Britain 5.841 2.181 1.246 1.079 189 82 37 35 5 Germany 6 China 7 Canada 1.363 358 185 34 15 13 8 Netherlands 388 12 9 Switzerland 382 12 10 South Korea 266 11 Bahçeşehir University - Organizational Theory The number of US companies was 189 in the 500 biggset company. 5 Maps - The World US & Turkey 6 Bahçeşehir University - Organizational Theory Fortune 500 Investigation - 2008 500 448 464 469 Kendi Ülkesindeki Yeri (Sağ eksen) 450 400 14 12 379 US ile Karşılaştırıldığında 350 10 10 315 300 11 377 363 332 12 9 8 8 250 7 200 206 163 159 150 6 6 5 4 4 108 100 3 50 In accordance to revenue basis,Tüpraş is the biggest company in Turkey and the number of Tüpraş is 108 in an US market 2 2 1 Bahçeşehir University - Organizational Theory ARÇELİK ERDEMİR FORD OTOMOTİV EÜAŞ TURKCELL ENKA İNŞAAT TÜRK TELEKOM SHELL & TURCAS PET. PETROL OFİSİ TEDAŞ BOTAŞ 0 TÜPRAŞ 0 7 To Expand Int’l Market Motivators Economies of Scale • Indutrial Revolution • Innovations • Technology • ... •Diversification of Products Economies •Increase in product quantity of Scope •Expand regions, country and market Low Cost • Invest raw materials with a lowest possible cost Production •Get opportunity to obtain scare •Obtain source of cheap labor Factors Bahçeşehir University - Organizational Theory 8 Strategic Alliances Strategic Alliance is one of the way of getting involved in international trade Licensing Source: .... 9 Joint Ventures Consortia Bahçeşehir University - Organizational Theory Strategic Alliances Benefits Achieve production cost savings through economies of scale Share complementary technological strengths Distrubute new products Service through anaother country’s distrubution channels Bahçeşehir University - Organizational Theory 10 Strategic Alliances Samples JV Pharmaceutical Merck, Eli Lilly, Pfizer, Warner Lambert JV, Gold Exploration Robex Resources (Canada)Inc. & Geo Services International (Mali) Jonit Ventures, Consortias JV Banking Sector ICiCI (India) & Prudential (UK) (Asset Management) Source: .... 11 CONSROTIA Airbus French, British,German vs Boeing (US) Bahçeşehir University - Organizational Theory Model for Global vs Local Opportunities Decision between the Globalization vesrsus a multidomestic global strategy Whether the manager want each global affiliate to act autonomously or whether activities should be standardized across countries Globalization strategy means that product design, manufacturing and marketing strategy are standardized throught the world (Coca – Cola only the advertising and marketing need to be tailored for different regions) A multidomestic strategy menas that competition in each counrty is handled independently of competition in other countries (Dominos - - > The compnay has 2.500 int’l restaurants and offers 100 different pizza pies) Bahçeşehir University - Organizational Theory 12 Model to Fit Org. Structure to Int’l Advantages High Forces for Global Integration Low Globalization Staretegy: Both Globalization and Multi Domestic Strategy: Global Product Structure Global Matrix Structure Export Strategy: Multi Dpmestic Strategy: International Division Global Geographic Structure Low Forces for National Responsiveness Bahçeşehir University - Organizational Theory High 13 Int’l Divison & Domestic Division Domestic Division: Typicially Orginized along functional or product lines International Divison: Orginized according to geographical interest Has its own hierarchy to handle business (licensing, joint ventures) in various countries Selling the products and services and prodcuts created by the domestic division Openning subsidiary plants Moving the organization into more sophisticated international operations Bahçeşehir University - Organizational Theory 14 Domestic Hybrid Structure with Int’l Division CEO Human Resources Electircial Product Div. 15 Research & Development Corporate Finance Scientific Product Div. Medical Product Div. Internatinal Division Bahçeşehir University - Organizational Theory Europe Sales Mideast (Sales) Brazil (Subsidiary) Staff (Legak, Licensing) Global Product Divison Structure All Divison Manager is responsible Controlling Organizing Distrubition of product Planning Issues Successful global Division Structure 16 The Product based structure works best when a division handles products that are tecnology similar and can be standarized for marketing worldwide Bahçeşehir University - Organizational Theory Global Geographical Divison Structure • Divides the world into geographical • regions • Each geographical divison reporting • to CEO • Each Division has full control of • functional activities wtihin a geog. area • Difficult to transfer new domestic tech. and products, (each div. thinks what it need) Source: .... 17 Bahçeşehir University - Organizational Theory Global Matrix Structure It provides a way to achieve vertical and horizontal coordination simultaneously along two dimensions The matrix works best when pressure for decision making balances the interests of both product standarzation and geographical localization and when coordination to share resources is important 18 Bahçeşehir University - Organizational Theory Global Matrix Structure Deloitte International Executive Committee Business Areas Turkey Switzerland UK Egypt Audit Audit Audit Audit Audit Corporate Finance Corporate Finance Corporate Finance Corporate Finance Tax Tax Tax Tax Tax ERS ERS ERS ERS ERS Corporate Finance Bahçeşehir University - Organizational Theory 19 Building Global Capabilities The Global Organizational Challenge Increased Complexity and Differenciation Need for Integration Transfer of Knowledge and Innovation Global Coordination Mechanisms Global Teams Headquarters Planning Expand Coordination Roles Bahçeşehir University - Organizational Theory 20 Cultural Differences in Coordination and Control National Value Systems Three National Approaches to Coordination and Control Centralized Coordination in Japannese Companies European Firms’ Decentralized Approach The U.S. Bahçeşehir University - Organizational Theory 21 Questions and Explanations Bahçeşehir University - Organizational Theory 22
