MGMT 4860 Org. Theory
YUM brands
Based in Louisville, Kentucky One of the world's largest restaurant companies with over 41,000 restaurants in more than 125 countries and territories. Restaurant brands include KFC, Pizza Hut, and Taco Bell Since their spin-off from PepsiCo in 1997, Yum! Brands has become a truly global company from going from approximately 20% of profits coming from outside the U.S. to almost 70% in 2014.
differentiation
"the differences in cognitive and emotional orientations among managers in different functional departments, and the difference in formal structure among these departments."42 When the external environment is complex and rapidly changing, organizational departments become highly specialized to handle the uncertainty in that part of the external environment each department works with.
integration
"the quality of collaboration between departments.
Barcelona
HR is one of the most important things they do can't train people to be enthusiastic transcient business always hiring always firing 1 or 2 managers have quite-turned over 60 to 70 % of mgmt not afraid to let them go HR the biggest thing for any company in customer service three stage process: interview, send out on shop, hundred dollar allowance to go out to restaurants and write an essay level of education, intelligence, complete a task pretend like you've worked for six months start talking about a job
factors of production
One of the earliest, and still one of the most power- ful, motivations for U.S. companies to invest abroad is the opportunity to obtain raw materials, labor, and other resources at the lowest possible cost. Organizations have long turned overseas to secure raw materials that were scarce or unavailable in their home country. In the early twentieth century, for example, tire companies went abroad to develop rubber plantations to supply tires for America's growing automobile industry.
market sector
, smart companies are keeping tabs on social media (tweets, Facebook) to see what customers and potential customers care about, gain rapid insight into trends, and learn what words to use in marketing. For example, companies such as Mars, the maker of M&Ms, and Kraft, which makes different varieties of macaroni and cheese, are tweaking their products, particularly the use of certain food dyes, to address customer concerns.
worldwide product structure
, the automotive components group, industrial group, and so on are responsible for the manufacture and sale of products worldwide. The vice president of the international division is responsible for coordinators in each region, including a coordinator for Japan, Australia, South America, and northern Europe. The coordinators find ways to share facilities and improve production and delivery across all product lines sold in their regions.
strategic orientation -1st stage
-Domestic market extension orientation -Multidomestic market orientation -Global market orientation
as the environment becomes more complex,
-Events become less stable -Financial resources become less available -The level of uncertainty increases
global coordination mechanisms
-Global Teams -Headquarters Planning -Expanded Coordination Roles
types of resource dependent relationships
Organizations operating under the resource-dependence philosophy avoid excessive dependence on other organizations and maintain control of resources and outcomes. In the hierarchy of resourcedependence relationships, the strategies at the top, Acquisition/ Merger and Joint Venture, offer more direct control than Strategic Alliances, Supply Sourcing, or Trade Associations. Board Interlock offers less direct control.
challenges of global design
-complexity and differentiation -need for coordination -transfer of knowledge and innovation
instability often occurs when
-consumer interests shift -new technologies are introduced -competitors regarding advertising and new products or services
benefits of collaboration
-cost savings -better decision making -greater revenue -increased innovation
two essential ways he environment influences organizations
-the need for information about changes in the environment -the need for resources from the environment
international division
. The international division has a status equal to the other major departments or divisions within the company organized according to geographic interests own hierarchy to handle business ) in various countries, selling the products and services created by the domestic divisions, opening subsidiary plants, and in general moving the organization into more sophisticated international operation
interlocking directorates
A formal linkage that occurs when a member of the board of directors of one company sits on the board of directors of another company. o For example, media corporations share members of the board of directors with a variety of other large corporations including banks, investment companies, oil companies, health care and pharmaceutical companies and technology companies. ABC/Disney NBC/GE CNN/TimeWarner For more details:
transnational organizations
Assets and resources are dispersed worldwide • Structures are flexible and ever‐changing • Subsidiary managers initiate strategy and innovations that become strategy for the whole organization • Corporate culture, shared vision, and management style guide the organization
building relationships
Buffering roles Boundary-spanning roles Business intelligence Competitive intelligence
influence key sectors
Change of Domain Political Activity, Regulation Trade Associations Illegitimate/Illegal Activities
some experts believe a great percentage of radical innovations will come from companies in emerging markets such as
China and India in the coming years.
general decline in North America and Western Europe's Global 500 list and increase in countries such as
China, Brazil, Taiwan, and Russia
human resources sector
China, a new labor movement is challenging business leaders with emerging labor activist groups as well as legal aid and support networks at universities promoting workers rights. Young migrant workers are using the Internet and mobile phones to organize and spread information about poor working conditions.
environment
Composed of norms and values from stakeholders Enhance Legitimacy
problems of product structure
Often the product divisions do not work well together, competing instead of cooperating in some countries; and some countries may be ignored by product managers.
Guiltless gourmet
Founded in 1989 in Austin Texas by Doug Freeman o Enjoyed success until leaders failed to notice the changes in the environment. Large companies like Frito Lay entered the low-fat snack food market. o Instituted reactive strategies. o The company redesigned itself to become basically a full time marketing organization, w
mechanistic structure
Tasks are specialized Tasks are rigidly defined Strict hierarchy of authority and control Tasks are centralized Communication is vertical
what hinders adaptation
The ability of organizations to change is limited due to investment in plants, equipment, and specialized personnel; limited information; the viewpoints of decision makers; the organization's successful history; and the corporate culture.
the international sector can directly affect many organizations, and it has beomce extremely important in the last few years
The auto industry, for example, has experienced profound shifts as China recently emerged as the world's largest auto market. In response, car makers are moving international headquarters into China and designing features that appeal to the Chinese market, including bigger, limousine-like back seats, advanced entertainment systems, and light-colored interiors.
Complex, unstable environment
The greatest uncertainty for an organization A large number of elements in numerous environmental sectors impinge upon the organization, and they shift frequently or react strongly to organizational initiatives. When several sectors change simultaneously, the environment becomes turbulent.
raw materials sector
Tyson Foods is spending hundreds of millions of dollars to build 90 chicken farms in China to guarantee a supply of high-quality birds, which the company then processes and sells to fast food companies, wholesalers, and other meatpackers that use the meat in sausage and other prod- ucts. In the United States, Tyson pays independent farmers to raise chickens, but it has little control over product quality and safety in China so it decided to run its own farms, hoping safe products will build its brand in a country where the company is not well known.
simple stable environment
Uncertainty is low
economies of scale example-Walmart
Wal-Mart is perhaps the most salient example of a company benefiting from economies of scale. o As a dominant player in retailing, the company's size provides it with enormous efficiencies that it uses to keep costs low. For example, its size allows Wal-Mart to do its own purchasing more efficiently since it has thousands of large stores worldwide. This gives the company tremendous bargaining power with its suppliers. o Not only can it get its products cheaper, but its size allows it more inexpensive distribution. o In addition, it has an enormous amount of information concerning consumer likes and dislikes.
direct interlock
When one individual is the link between two companies, this is typically referred to as a
niche
a domain of unique environmental resources and needs sufficient to support an organization.
trade association
a federation that allows organizations, often in the same industry, to meet, share information, and monitor one another's activities. A trade association can also use collective resources to lobby for government policies to protect the industry.
the environmental conditions of complexity and dynamism create
a greater need to gether information and respond to changes based on that information
contracts and joint ventures reduce uncertainty through
a legal and binding relationship with another firm
joint venture
a separate entity created with two or more active firms as sponsors. This is a popular approach to sharing development and production costs and penetrating new markets.37 Joint ventures may be with either customers or competitors.
population
a set of organizations engaged in similar activities with similar patterns of resource utilization and outcomes. Organizations within a popu- lation compete for similar resources or similar customers, such as financial institu- tions in the Seattle area or car dealerships in Houston, Texas.
technology sector
an area in which massive changes have occurred in re- cent years. Technology for mobile Internet is a rapidly growing area. Although technology has created some jobs, analysts say it is eliminating many more than it is creating. In countries from the United States to Canada to Japan, studies have found substantial drops in white-collar jobs linked to adoption of new technology. Today, software is picking out worrisome spots on medical scans, spotting profits in stock trades in milliseconds, sifting through documents for evidence in court cases, and recording power usage beamed from digital utility meters at millions of homes.
collaborative network perspective
an emerging alternative to resource-dependence theory. Companies join together to become more competitive and to share scarce resources. Large aerospace firms partner with one another and with smaller companies and suppliers to design next-generation jets. Large pharmaceutical companies join with small biotechnology firms to share resources and knowledge and spur innovation. Consulting firms, investment companies, and accounting firms may join in an alliance to meet customer demands for expanded services.3
form
an organization's specific technology, structure, products, goals, and personnel, which can be selected or rejected by the environment
the autonomy of organizational parts gives strength to smaller units
and allows the firm to be flexible in responding to rapid change and competitive opportunities on a local level
resource-deo
argues that orga- nizations try to minimize their dependence on other organizations for the supply of important resources and try to influence the environment to make resources available
resource dependence
argues that organizations try to minimize their dependence on other organizations for important resources, and try to influence the environment to make resources available
The following characteristics distinguish the transnational organization from other global organi- zation forms such as the matrix,
assets and resources are dispersed into highly specialized operations that are linked together through interdependent relationships -structures are flexible and ever-changing -subsidiary managers intiate strategy and innovations that become strategy for the corporation as a whole -unification and coordination are achieved primarily through corporate culture, shared vision and values, and management style, rather than through formal structures and systems. -
the problems encountered by senior management using a global product structure result from the
autonomy of each regional division
in an international organization, the manufacturing manage has to be
aware of and coordinate with manufacturing operations of the company in various parts of the world so that the company achieves manufacturing efficiency and shares technology and ideas across units.
extraordinary advances in
communications, technology, and transportation have created a new, highly competitive landscape
multidomestic strategy
competition is handled in each country independently A multidomestic strategy would encourage product design, assembly, and marketing tailored to the specific needs of each country. Different global organization designs are better suited to either global standardization or national responsiveness.
the telecommunications industry, the oil industry, and airlines face
complex, unstable environments
complexity
complexity Environmental complexity refers to heterogeneity, or the number and dissimilarity of external elements (e.g., competitors, suppliers, industry changes, government regulations) that affect an organization's operations.
institutional environment
composed of norms and values from stakeholders (e.g., customers, investors, associations, boards, other organizations, government, and the community). Thus, the institutional view believes that organi- zations adopt structures and processes to please outsiders, and these activities come to take on rule-like status in organizations. The institutional environment reflects what the greater society views as correct ways of organizing and behaving.
country managers
coordinate across functions within a given country co- ordinate all the various functional activities located within the country to meet the problems, opportunities, needs, and trends in the local market, enabling the organi- zation to achieve multinational flexibility and rapid response.
network coordinator
coordinate information and activities related to key customer accounts. These coordinators would enable a manufacturing organization, for example, to provide knowledge and integrated solutions across multiple businesses, divisions, and countries for a large retail customer such as Tesco, Walmart, or Carrefour. Top managers in success- ful global firms also encourage and support informal networks and relationships to keep information flowing in all directions. Much of an organization's information exchange occurs not through formal systems or structures but through informal channels and relationships. By supporting these informal networks, giving people across boundaries opportun
intelligence team
cross-functional group of managers and employees, usually led by a CI professional, who work together to gain a deep understanding of a specific business issue, with the aim of presenting insights, possibilities, and recommendations to top leaders. -n provide insights that enable managers to make more informed decisions about goals, as well as devise contingency plans and scenarios related to major competitive issues
technical dimension
day-to-day work, technology, and operating requirements. governed by norms of rationality and efficiency, but the institutional dimension is governed by expectations from people and organizations in the external environment.
frenemies
the trend toward companies being both friends and enemies, collaborators and competitors. Many companies that long prided themselves on independence have shifted to an ecosystem approach.
the amount of complexity and dynamism in an organizations domain influences the need for information and therefore
the uncertainty felt w/in an organization
once an industry becomes established
there is an invis- ible push toward similarity. Isomorphism is the term used to describe this move toward similarity.
a more recent approach many organizations use is to drop the buffers and expose the technical core to the uncertain environment
these organizations no longer create buffers because they believe being well connected to customers and suppliers is more important that internal efficiency
general environment
those sectors that might not have a direct impact on the daily operations of a firm but will indirectly influence it. The general environment often includes the government, natural, sociocultural, economic conditions, technology, and financial resources sectors. These sectors affect all organizations eventually.
the models and perspectives for understanding interorganizational relationships ultimately help managers change their role from
top down management to horizontal coordination across organizations
today, freewhelling bloggers, twitterers, and youtubers are a
tremendous source of instability for scores of companies
twinning
two mills of similar size, age, and product mix are benchmarked against each other, with the weaker company told to copy the practices of the stronger one.
domestic divisions
typically organized along functional or product lines,
simple stable environment
uncertainty is low, only a few external elements in a limited nuber of environ,ental sector (e.g., suppliers, customers) to contend with, and they tend to remain stable.
forces for both global standardization and local responsiveness in many countries are low
using an international division with the domestic structure is an appropriate way to handle international business
process of ecological change
variation, selection, retention
power strategies
walmart and suppliers
differentiation
which is "the differences in cognitive and emotional orientations among managers in different functional departments, and the difference in formal structure among these departments." With high differentiation, coordination between departments becomes difficult, creating greater needs for integration
Global Product Structure
works best for worldwide production and sale of standard products.
multidomestic strategy
y means that competition in each country is handled independently of competition in other countries. Thus, a multidomestic strategy would encourage product design, assembly, and marketing tailored to the specific needs of each country.
is competition dead
yes, new form of competition is intensifying. companies find that they must coevolve with others in the ecosystem
transnational model of organization
• Advanced international organization to deal with multiple, interrelated, complex issues • Theory is based on interdependence • Useful for large, multinational companies with subsidiaries • Create an integrated network of individual operations that are linked together • Not an organizational chart; it is a managerial state of mind
legitimacy
defined as the general perception that an organization's actions are desirable, proper, and appropriate within the environment's system of norms, values, and beliefs. The notion of legitimacy answers an important question for institutional theo- rists: Why is there so much homogeneity in the forms and practices of established organizations?
organizational changes that result from coercive forces occur when an organization is
dependent on another, when there are political factors such as rules, laws, and sanctions involved, or when some other contractual or legal basis defines the relationship. . Organizations operating under those constraints will adopt changes and relate to one another in a way that increases homogeneity and limits diversity.
institutional perspective
describes how organizations survive and succeed through congruence between an organization and the expectations from its environment.
population-ecology perspective
differs from the other perspectives because it focuses on organizational diversity and adaptation within a population of orga- nizations.
when an organizational field is just getting started
diversity is the norm
global geographic structure
divides the world into geographic regions, with each geographic division reporting to the CEO. Each division has full control of functional activities within its geographic area companies w/ mature product lines and stable technologies can find low cost manufacturing w.in countries as well as meet different needs across countries for marketing and sales
organizations operating under the resource dependence philosophy will
do whatever is needed to avoid excessive dependence on other organizations and maintain control of resources and outcomes, thereby reducing their uncertainty
Honda
doing everything in-house is not the right way open collaboration is key partnership talks with Waymo, the Alphabet subsidiary formerly known as Google's self driving car unit to stay competitive, Honda needs to get over its chronic case of Not Invented Here syndrome willing to pursue win-win technology cooperation so that we can openly innovate with other companies and show individuality auto industry has entered a new era dominated by technologies like AI, sensors, apps and ride-sharing. honda execs touting a cooperative mobility ecosystem-a distributed fleet of vehicles that communicate with their occupants put technologies into production as quickly as possible
structure -3rd stage
domestic structure plus export department-domestic structure pls international division-worldwide geographic product structure-matrix, transnational structure
the patterns and events occurring in the environment can be described along three primary dimensions:
dynamism( whether evebts ub ebvironment stable or unstable), complexity, and abundance
niche
e (i.e., a domain of unique environmental resources and needs) sufficient to support it. The niche is usually small in the early stages of an organization but may increase in size over time if the organization is successful. . The niche is usually small in the early stages of an organization but may increase in size over time if the organization is successful. If the organization doesn't find an appropriate niche, it will decline and may perish.
typical alliances include
e licensing, joint ventures, and acquisitions
framework
e simple-complex and stable-unstable dimensions are combined into a framework for assessing environmental uncertainty. Toy manufacturers, for example, are generally found in simple but unstable environments. In other words, there may be few elements to contend with, but they are difficult to predict and change unexpectedly.
global hybrid or mixed structure
e, in which two or more different structures or elements of different structures are used. Hybrid structures are typical in highly volatile environments. UniCredit, for example, combines elements of functional, geographic, and product divisions to respond to dynamic market conditions in the multiple countries where it operates.83
when organizations enter the international arena, they have to create a structure to operate in numerous countries that differ in
economic development, language, political systems and government regulations, cultural norms and values, and infrastructure such as transportation and communication facilities.
_____, _________, and _________ forces have combined to pushe companies from a domestic to a global focus
economic, technological, and competitive
three primary factors motivate companies to expand internationally
economies of scale, economies of scope, and low production factors
companies often seek joint ventures to achieve production cost savings through
economies of scale, to share complementary technological strengths, to distribute new products and services through another country's distribution channels, or to take advantage of a partner's knowledge of local markets
many companies that long prided themselves on independence have shifted to an
ecosystem approach -cooperation
research study found that 1111-1-% of north american and western european manufacturers surveyed had set up
engineering operations in other countries
evaluating external environment steps
environmental scanning interpret environmental factors take action on opportunities or threats
strategic alliance
ess formal and binding than a joint venture. It is a collaborative agreement between two or more organizations that contribute resources to a common endeavor while maintaining their individuality. One example is a strategic partnership between NBCUniversal News Group and NowThis News, a start-up that creates short news segments tailored for social media sites such as Instagram and Snapchat and stored on mobile apps for viewers to watch throughout the day.
new organizations meet the new needs of society more than
established organizations that are slow to change
simple, unstable environment
even greater uncertainty
simple, unstable environment
even greater uncertainty - Rapid change creates uncertainty for managers. Even though the organization has few external elements, those elements are hard to predict (such as shifting social trends or changing customer interests), and they react unexpectedly to organizational initiatives.
organizational environment
everything that exists outside the boundary of the organization and has the potential to affect all or part of the organization.
in successful international firms, the role of top functional managers is
expanded to include responsibility for coordinating across countries, identifying and linking the organization's expertise and resources worldwide.
coercive forces
external pressure on organizations to adopt structures, techniques, or behaviors similar to other organizations-- sometimes with the force of law. It occurs when organizations are dependent on each other, when there are political factors such as rules, laws, and sanctions involved, or when a contractual or legal basis defines the relationship.
China
fastest-growing middle class in history, is the largest or second-largest market for a variety of products and services, including mobile phones, automobiles, con- sumer electronics, luxury goods, and Internet use.
financial resources
first and foremost in the minds of entrepreneurs. Many small-business owners turned to online person-to-person (P-to-P) lending networks for small loans as banks tightened their lending standards. Jeff Walsh, for example, bor- rowed around $22,000 through Prosper.com for his coin laundry business. Alex Kalempa needed $15,000 to expand his business of developing racing shift sys- tems for motorcycles, but banks offered him credit lines of only $500 to $1,000. Kalempa went to LendingClub.com, where he got the $15,000 loan at an inter- est rate several points lower than the banks were offering.
interlocking directorate
formal linkage that occurs when a member of the board of directors of one company sits on the board of directors of another company. The individual is a communications link between companies and can influence policies and decisions.
transnational model of organization
highly differentiated to address the increased complexity of the global environment yet offers very high levels of coordination, learning, and transfer of organizational knowledge and innovations. The transnational model represents the most advanced kind of international organization. It reflects the ultimate in both organizational complexity, with many diverse units, and organizational coordination, with mechanisms for integrating the varied parts. The transnational model is useful for large, multinational companies with subsidiaries in many countries that try to exploit both global and local advantages as well as technological advancements, rapid innovation, and global learning and knowledge sharing. Rather than building capabilities primarily in one area, such as global efficiency, local responsiveness, or global learning, the transnational model seeks to achieve all three simultaneously. Dealing with multiple, interrelated, complex issues requires a complex form of organization and structure.
determining an organization's environmental uncertainty generally means focusing on sectors of the taks environment, such as
how many elements the organization deals with regularly and how rapidly these various elements change
benchmarking
identifying who is best at something in an industry and then duplicating the technique for creating excellence, improving it in the process
companies in industries with low demand, shortages, and strikes were more likely to be convicted for i
illegal activities, suggesting that illegal acts are an attempt to cope with resource scarcity.
bribery is one of the most frequent types of
illegitimate activity, particularly in companies operating globally
the more dependent an organization is on other organizations for scarce resources, the more
important it is to establish favorite linkages or control entry into the domain
organizational environment
includes all the elements that exist outside the boundary of the organization and have the potential to affect all or part of the organization.
task environment
includes sectors with which the organization interacts directly, including: Industry sector Raw materials sector Market sector Human resources sector International sector
eleven sectors can be analyzed for each organization
industry, raw materials, human resources, financial resources, market, technology, economic conditions, government, natural, sociocultural, and international.
stage of development-2nd stage
initial foreign involvement-competitive positioning-explosion multinational-global
institutional similarity
institutional isomorphism in the academic literature, is the emergence of a common structure and approach among organizations in the same field, causing one unit in a population to resemble other units in the same set of environmental conditions.
institutionality
institutional isomorphism in the academic literature, is the emergence of a common structure and approach among organizations in the same field. Isomorphism is the process that causes one unit in a population to resemble other units that face the same set of environmental conditions.
the management philosophy is based on
interdependence rather than either full divisional independence or total dependence of these units on headquarters for decision making and control.
one of the most popular ways companies get involved in international operations is through
international alliances
when a company is low with respect to developing either a globalization or multidomestic strategy, simply using an ________ with the domestic structure is an appropriate
international division
Air BNB growth strategy
international growth is up and to the right for Airbnb more than 35,000 cities and 191 countries second most valuable private startup in san fransisco behind uber sharing economy-economic model in which individuals are able to borrow or rent assets owned by someone else international expansion started in 2011 w/ acquisition of Accoleo first international airbnb office in Hamburg
collaboration and cooperation
is a prerequisite mounting expensive new programs and reducing costs, and enhancing the organization's profile in selected industries or technologies.
international sector
is also a part of the task environment because of globalization and intense competition. In August 2013, the U.S. Department of Agriculture (USDA) gave approval for four Chinese poultry processors to begin shipping cooked poultry products to the United States, which increased competition for U.S. processing plants. Not long after that decision, China's Shuanghui International Holding Ltd. began a $4.7 billion takeover of the U.S.-based pork processor Smithfield Foods Inc. to acquire new technology and improve safety practices.
organizational form
is an organization's specific technology, structure, products, goals, and personnel, which can be selected or rejected by the environment.
advertising
is especially important in highly competitive industries and in industries that experience variable demand. For example, since the U.S. Food and Drug Administration loosened regulations to permit advertising of prescription drugs in the United States, the major pharmaceutical companies have spent nearly $5 billion annually on advertisements such as a cute cartoon bee pushing Nasonex spray for allergies or heart attack survivors promoting the benefits of cholesterol- fighting Crestor.
the companies that will survive and flourish in the future will be those that
know their markets very well, qualify and hedge their risks, have the ability to innovate or adapt quickly - and can marry their entrepreneurial spirit with world-class commercial discipline.
contracts come in the form of
license agreements that involve the purchase of the right to use an asset for a specific time and supplier arrangements that contract for the sale of one firm's output to another -can provide long term security by tying customers and suppliers to specific amounts and prices
boundary spanning roles
link and coordinate an organization with key elements in the external environment. Boundary spanning is primarily concerned with the ex- change of information to detect and bring into the organization information about changes in the environment and to send information into the environment that presents the organization in a favorable light.
time horizon
long r&d department-short manufacturing departmen, short sales department
managing in a global environment-Holden outerwear
look outside for inspiration, stores, current trends eco-friendlier attributes, production processes to shipping prices would be doubled if shipping around the world quality of work-hard to find skilled workers big in japan, korea, asia, germany and france US and canada use sales reps from office japan, korea and europe use distributors most important -be on time consolidate all factories into one facility in China one boat for canada and US risk-eggs in one basket
formality of structure
low r&d department, high manufacturing department, high sales department
companies that have a presence in multiple countries gain _____ and _____ compared to the same size firm that has a presence in fewer countries
marketing power and synergy
normative forces
mean that organizations are expected to change for standards of professionalism and to adopt techniques considered by the professional community to be up-to-date and effective
multidomestic
means competitive issues in each country are independent of other countries; the company deals with each country individually.
uncertainty
means that decision makers do not have sufficient information about environmental factors, and they have a difficult time predicting external changes. Uncertainty increases the risk of failure for organizational decisions and makes it difficult to compute costs and probabilities associated with decision alternatives
uncertainty
means that decision makers have some degree of insufficient information about environmental factors, making prediction of external changes difficult. Characteristics of the environmental domain that influence uncertainty are the extent to which the external domain is complex and the extent to which events are dynamic.
struggle for existence
means that each organizational form is engaged in a competitive struggle to obtain sufficient resources for survival. This competition is especially intense among new organizations, many of which fail to survive, but even institutionalized organizations are not necessarily permanent in the long run.
global geographic structure
means that each region reports directly to the CEO and has full control of functional activities in its geographical area. Although this structure lends itself easily to exploiting opportunities for regional competitive advantages, problems may result from the autonomy of each regional division. It is difficult to plan on a global scale because each division acts to meet only the needs of its region. It is difficult to introduce products developed offshore into domestic markets, and there is often duplication of line and staff managers across regions.
resource dependence
means that organizations depend on the environment but strive to acquire control over resources in order to minimize their dependence.
globalization strategy
means that product design, manufacturing, and marketing strategy are standardized, which is less costly than creating different products for different markets. Economic and social changes, including a backlash against huge global corporations, have prompted consumers to favor local products.
variation
means the appearance of new, diverse forms in a population of organizations. These new organizational forms are initiated by entrepreneurs, established with venture capital by large corporations, or set up by governments seeking to provide new services.
low uncertainty
mechanistic structure, formal, centralized-few departments-no integrating roles-current operations orientation-low speed response
low-moderate uncertainty
mechanistic structure, formal, centralized-many departments, some boundary spanning-few integrating roles-some planning moderate speed response
inter-organizational framework
models and perspectives for understanding interorganizational relationships help managers change role from top down mgmt to horizontal relationships among organizations can be characterized by whether the organizations are similar or dissimilar , and whether the relationships are competitive or cooperative
market potential- 4th stage
moderate, mostly domestic-large mutlidomestic-very large multinational-whole world
specialists
more competitive than generalists in the narrow area in which their domains overlap.
global teams
o called transnational teams, are cross-border work groups made up of multiskilled, multinational members whose activities span multiple countries.85 Typically, teams are of two types: intercultural teams, whose members come from different countries and meet face to face, and virtual global teams, whose members remain in separate locations around the world and conduct their work electronically.
indirect interlock
occurs when a director of company A and a director of company B are both directors of company C. They have access to one another but do not have direct influence over their respective companies.66 Research shows that, as a firm's financial for- tunes decline, direct interlocks with financial institutions increase.
Board Interlock
occurs when a director serves on the boards of multiple companies, creating connections among the companies. The candy company Hershey, for example, has for decades had a board with at least a dozen interlocks with other companies at any one time.30 This practice also occurs frequently in Silicon Valley,
cooprarion
occurs when leaders from important sectors in the environment are made part of an organization. It takes place, for example, when influential customers or suppliers are appointed to the board of directors, such as when when the senior executive of a bank sits on the board of a manufacturing company. As a board member, the banker may become psychologically coopted into the inter- ests of the manufacturing firm.
acquisitions
offer greater control than joint ventures
high moderate uncertainty
organic structure, teamwork, participative, decentralized-few departments, much boundary spanning-few integrating roles-planning orientation, fast response
high uncertainty
organic structure, teamwork;participative, decentralized-many departments differentiated, extensive boundary spanning- many integrative roles-extensive planning, forecasting
Global Product Structure
organizational structure that divides worldwide operations according to a company's product areas one of the most commonly used structures through which managers attempt to achieve global goals because it provides a fairly straightforward way to effectively manage a variety of businesses and products around the world. Managers in each product division can focus on organizing for international operations as they see fit and directing employees' energy toward their own division's unique set of global problems or opportunities. provides top managers at headquarters with a broad perspective on competition, enabling the entire corporation to respond more rapidly to a changing global environment.
establishing formal relationships
ownership, contracts, joint ventures, interlocking directorates
other types of illegitimate activities include
payoffs to foreign governments, illegal political contributions, promotional gifts, and price fixing
collaborative network
perspective is an alternative to the resource dependence theory. Companies join together to become more competitive and to share scarce resources.
with a global product structure, each manager is responsible for
planning, organizing, and controlling all functions for the production and distri- bution of its products or services for any market around the world.
coercive forces
political influence the external pressures exerted on an organization to adopt structures, techniques, or behaviors similar to other organizations. Coercive pressures may also occur between organizations where there is a power difference
sociocultural sector
pressure from advocacy groups to improve working conditions for employees hired by contractors for large companies such as Walmart, Apple, and Amazon. Walmart recently sus- pended one of its seafood suppliers in the South after immigrant workers said they had been forced to work more than 80 hours a week, threatened with beat- ings, and told their families in Mexico would be hurt if they complained
struggle for existence
principle that underlies the population ecology model Organizations and populations of organizations are engaged in a competitive struggle over resources, and each organizational form is fighting to survive. The struggle is most intense among new organizations, and both the birth and survival frequencies of new organizations are related to factors in the larger environment.
all organizations are compelled by current environmental and competitive challenges to develop closer relationships w/ customers, which may lead companies to shift from
product based to geographic based structures.
globalization strategy
product design, manufacturing, and marketing strategy are standardized throughout the world, which is less costly than creating different products for different markets.
globalization strategy
products are standardized throughout the world
business integrator
provide coordination on a regional basis that might include several countries. These managers reach out to various parts of the organization to resolve problems and coordinate activities across groups, divisions, or countries.
population ecology
pulation Ecology Focuses on organizational diversity and adaptation with a population of organizations. Innovation and change take place through the birth of new forms and kinds of organizations Organizational Form and Ecological Change Large, established organizations have become dinosaurs. o Circuit City o Mervyn's o Woolworth o Kmart
coordination
refers to the quality of collabo- ration across organizational units. The question is how to achieve the integration and collaboration that is necessary for a global organization to reap the benefits of economies of scale, economies of scope, and labor and production cost efficiencies that international expansion offers. high differentiation=more time and resources to be devoted to achieving coordination because employees attitudes, goals, and work orientations differ widely
selection
refers to whether a new organizational form is suited to the environment and can survive. Only a few variations are "selected in" by the environment and survive over the long term. Some variations will suit the external environment better than others. Some prove beneficial and thus are able to find a niche and acquire the resources from the environment necessary to survive. Other variations fail to meet the needs of the environment and perish.
dynamism
refers to whether the environment in which the organization operates is stable or unstable. An environmental domain is stable if it remains essentially the same over a period of months or years. Under unstable conditions, environmental elements shift rapidly.
dynamism
refers to whether the environment in which the organization operates is stable or unstable. An environmental domain is stable if it remains essentially the same over a period of months or years. Under unstable conditions, environmental elements shift rapidly. Consider what is happening in the environment for digital
government sector
regulations influence every phase of organizational life. Two of the most prominent and far-reaching changes in the United States in recent years were the Patient Protection and Affordable Care Act (ObamaCare) and the Dodd-Frank Act (financial regulatory reform).7 Small companies in par- ticular are struggling with the time and expense required to meet provisions of new healthcare and financial reform laws.
greater information uncertainty is
resolved through greater structural flexibility and the assignment of additional departments and boundary roles
normative forces
result from common training and professionalism e pressures to achieve standards of professionalism and to adopt techniques that are considered by the professional community to be up to date and effective. Changes may be in any area, such as information technology, accounting requirements, marketing techniques, or collab- orative relationships with other organizations.
mimetic forces
result from responses to uncertainty the pressures to copy or model other organizations, occur. I.E- McDonalds revived stagnant sales by adding healthier menu items and new types of beverages, so other fast-food chains began doing the same
public relations
similar to advertising, except that stories often are free and aimed at public opinion. Public relations people cast an organization in a favorable light in speeches, on websites, in press reports, and on television. Public relations attempts to shape the company's image in the minds of customers, suppliers, government officials, and the broader public. G
global matrix structure
similar to the matrix described in Chapter 3, except that for multinational corpora- tions the geographic distances for communication are greater and coordination is more complex. The matrix works best when pressure for decision making balances the interests of both product standardization and geographic localization and when coordina- tion to share resources is important. The matrix can support a mixed globaliza- tion and multidomestic strategy
a family owned hardware store in a suburban community is in a
simple environment. The store does not have to deal with complex technologies or extensive government regulations, and cultural and social changes have little impact. Human resources are not a problem because the store is run by family members and part-time help. The only external elements of real importance are a few competitors, suppliers, and customers.
a soft drink distributor functions in a
simple, stable environment
toy manufacturers are in a
simple, unstable environment
state universities, appliance manufacturers, and insurance companies are in a somewhat
stable, complex environment
global stage
stage-global structure-matrix, transnational structure the company transcends any single country. The business is not merely a collection of domestic industries; rather, subsidiaries are interlinked to the point where competitive position in one country significantly influences activities in other countries.
when there is a high level of complementarity between the business lines, geographical positions, or skills of two companies, the firms often go the route of a __ rather than ownership through merger or acquisition
strategic alliance -such alliances formed through contracts and joint ventures
generalist and specialist
strategies distin- guish organizational forms in the struggle for survival. Organizations with a wide niche or domain—that is, those that offer a broad range of products or services or that serve a broad market—are generalists. Organizations that provide a narrower range of goods or services or that serve a narrower market are specialists.
sectors
subdivisions of the external environment that contain similar elements.
sectors
subdivisions that contain similar elements.
organizational ecosystem
system formed by the interaction of a community of organizations and their environment. An ecosystem cuts across traditional industry lines.
general environment
t includes those sectors that may not have a direct impact on the daily operations of the firm but that influence the industry or economy in general ways that in turn indirectly influence the organization. Government sector Natural sector Sociocultural sector Economic conditions Technology sector Financial resources sector
complex, stable environment
t represents somewhat greater uncertainty. A large number of elements (e.g., suppliers, customers, government regulations, industry changes, unions, economic conditions) have to be scanned, analyzed, and acted upon for the organization to perform well. External elements do not change rapidly or unexpectedly in this environment.
headquarters planning
take an active role in planning, scheduling, and control to keep the widely distributed pieces of the global organization working together and moving in the same direction e most important function of corporate headquarters was to "provide enterprise leadership."
institutional view and organization design
technical and institutional. The technical dimension is the day-today work technology and operating requirements which is governed by norms of rationality and efficiency. Institutional structure is that part of the organization most visible to the outside public which is governed by expectations from the external environment. The adoption of structures might not be linked to actual production needs and might occur regardless of whether specific internal problems are solved. Formal structure is separated from technical action in this view.
generalists
the breadth of the generalist's domain serves to protect it somewhat from environmental changes. Though demand may decrease for some of the generalist's products or services, it usually increases for others at the same time. because of the diversity of products, services, and customers, generalists are able to reallocate resources internally to adapt to a changing envi- ronment, whereas specialists are not. However, because specialists are often smaller companies, they can sometimes move faster and be more flexible in adapting to changes.
industry sector
the retail industry in South Korea has always been dominated by big department stores, but as smartphone use has surged in the country over the past few years, companies saw new ways to reach consumers. South Korea has a low number of women in the workforce, so there is a ready audience of affluent television and Internet shoppers. Online and home shopping competitors are growing in popularity, and posters on subway station walls allow people to make purchases simply by snapping a picture of a barcode.
motivations for global expansion
1) Economies of scale 2) Economies of scope 3) Low-Cost Production Factors
international ticket sales now account for up to
80% of a movie's total gross
specialist
A company that provides a narrow range of goods or services or that serves a narrower market
generalists
A company that offers a broad range of products or services or that serves a broad market
Textile manufacturing in the United States is now practically nonexistent as companies have lowered costs by shifting most production to
Asia, Mexico, Latin America, and the Caribbean.
adding positions and departments
As the complexity in the external environment increases, so does the number of positions and departments with the organization, which in turn increases internal complexity.
during the economic turmoil of recent years, some companies, including Apple and Google, have run up against a long- standing U.S. federal law that bars direct interlocks between competing companies.
Arthur Levinson, chairman of Roche Holding AG's Genentech, for example, re- signed from the Google board after the Federal Trade Commission began investigating his participation on both the Google and Apple boards. Similarly, Eric Schmidt, executive chairman and former CEO of Google, resigned from the Apple board for the same reason, as the two companies compete in a growing number of businesses
benefits of coordination
Cost savings, better decision making, greater revenues, and increased innovation.
organic structure
Employees contribute to the common task of the department Tasks are adjusted and redefined through teamwork Less hierarchy of authority and control Knowledge and control of tasks are located anywhere in the organization Communication is horizontal
perspective
How organizations survive and succeed through similarity between an organization and the expectations from its environment
changing role of management
In ecosystems, managers move beyond traditional responsibilities Managers must think about horizontal processes The old role of management relied on operation roles and boundaries Collaborative roles are becoming more important for success
an examples of a traditionally stable environemnt is public utility
In the rural Midwest, demand and supply factors for a public utility are stable. A gradual increase in demand may occur, which is easily predicted over time. Toy companies, by contrast, have an unstable environment. Hot new toys are difficult to predict, a problem compounded by the fact that children are losing interest in toys at a younger age, their interest captured by video and computer games, electronics, and the Internet.
reasons for trouble building trusting relationships
Language barriers, cultural dissimilarities, and geographic distances can prevent managers from spotting the knowledge and opportunities that exist across dis- parate country units. • Sometimes managers don't appreciate the value of organizational integration and want to protect the interests of their own division rather than cooperate with other divisions. • Divisions sometimes view knowledge and innovation as power and want to hold onto it as a way to gain an influential position within the global firm. • The "not-invented-here" syndrome makes some managers reluctant to tap into the know-how and expertise of other units. • Much of an organization's knowledge is in the minds of employees and cannot easily be written down and shared with other units.
standardization
Managers must decide whether they want each global affiliate to act autonomously or whether activities should be standardized across countries. These decisions are reflected in the choice between a globalization versus a multidomestic global strategy.
design elements
Managers must design organizations for complex international coordination Organizations' international strategies and structures evolve There are diverse options for specific international strategies There are a variety of challenges for global organizations Diverse national and cultural values influence an organization's approach Companies operating globally require broad coordination
supply sourcing
Many organizations establish contracts with key suppliers to acquire resources to supplement in-house resources and capabilities. Rather than going it alone, companies such as Apple, Walmart, Dell, and Tesco develop deep, mutually beneficial relationships to make sure they have the supplies and resources they need.
resource strategies
McDonalds and beef suppliers, managing supply chain relationships
economies of scale example: McDonalds and proctor and gamble
McDonalds can produce both hamburgers and French fries at a lower average cost than what it would cost two separate firms to produce the same goods. This is because McDonalds hamburgers and French fries share the use of food storage, preparation facilities, and so forth during production. o Another example is a company such as Proctor & Gamble which produces hundreds of products from razors to toothpaste. They can afford to hire expensive graphic designers and marketing experts who will use their skills across the product lines. Because the costs are spread out, this lowers the average total cost of production for each product.
pharmaceutical companies such as Abbott Laboratories, Merck, and Pfizer operate in a highly complex environment.
They use multiple, complex technologies; cope with numerous ever-changing government regulations; are significantly affected by international events; compete for scarce financial resources and highly trained scientists; interact with numerous suppliers, customers, contractors, and partners; respond to changing social values; and deal with complex legal and financial systems in multiple countries.
acquisition/merger
This type of relationship offers the greatest amount of control over joint outcomes because the acquiring firm absorbs all of the resources, assets, and liabilities of the target organization. For example, Mattel recently acquired Canada's Mega Brands Inc. to expand its line of toys and compete with LEGO in the market for plastic construction blocks. Mattel will own the company and control what happens with it.
buffering roles
absorb uncertainty from the environment. The technical core performs the primary production activity of an organization. Buffer departments surround the technical core and exchange materials, resources, and money between the environment and the organization.
alternatives for altering the domain
acquisition and divestment Facebook and Whatsapp and Good and Lenovo
many managers prefer ___ because they offer greater control than joint ventures
acquisitions
internal structures can be adapted in many ways to better meet the external environment by
adding positions and departments, building relationships, differentiation and integration,
international events can influence all the domestic sectors of the environment
adverse weather and a workers' strike in Western Africa, which supplies about two-thirds of the world's cocoa beans, sharply increased raw material costs for Choco-Logo, a small maker of gourmet chocolates in Buffalo, New York.14 Farmers, fertilizer companies, food manufacturers, and grocers in the United States faced new competitive issues because of an unexpected grain shortage and rising costs related to international changes. Strong economic growth in developing countries enabled millions of people to afford richer diets, including grain-fed meat, which directly contributed to the grain shortage in the United States.
economic conditions
affect the way a company must do business. The global recession that began in 2008 affected companies in all industries. Briggs Inc., a small New York City company that plans customized events for corporations wanting to woo top clients or reward staff or client loyalty, had to make some changes when it began losing customers. Even huge, elite corpora- tions were hesitant to spend extravagantly in the weakening economy, so Briggs began looking for ways to save clients' money, such as moving events to smaller venues, scaling down décor, and adding extras that didn't add to the cost.
licensing
allowing another firm to market your brands
one outcome of high differentiation is that coordination and collaboration among departments
become more difficult
economies of scale
building a global presence expands an organization's scale of operations, enabling it to realize.
megacommunity approach
businesses, governments, and nonprofit organizations join together across sectors and industries to tackle huge, compelling problems of mutual interest, such as energy development, world hunger, or cybercrime.
companies can gain competitive advantage thorugh local responsiveness
by responding to unique competitive advantages through local responsiveness-worldwide geographic structure is appropriate
intererorganizational relationships
the relatively enduring resource transactions, flows, and linkages that occur among two or more organizations.
international environment
can directly affect many organizations, and it has become extremely important in the last few years. The distinctions between foreign and domestic operations have become increasingly irrelevant. For example, the auto industry has experienced profound shifts as China recently emerged as the world's largest auto market. Car makers are moving international headquarters into China and designing features that appeal to the Chinese market.
techniques for influencing or changing a firm's environment
change where you do business (Walmart and Amazon-walmart ecommerce and amazon physical presence Get political Unite with Others Don't fall into illegitimate activities
domain
chosen environmental field of action. It is the territory an organization stakes out for itself with respect to products, services, and markets served. Domain defines the organization's niche and defines those external sectors with which the organization will interact to accomplish its goals.
environmental domain
chosen territory of action defining the niche and external sectors with which the organization will interact to accomplish its goals.
top managers can provide
clear strategic direction, guide far-flung operations, and resolve competing demands from various units.
evaluating external environments
general environment and specific environment how managers make sense of external environments -engage in environmental scanning -surveying environment for trends that may affect business search for info related to economy, technologica, sociocultural trends scholarly databases specific-customers, suppliers scanning-components specific to information itself trade journals companies evaluation will only be as good as the information that it collects general environments can be separated into two categories-opportunities and threats opportunities-changes or trends in external environment threats-opposite statistical software-opportunity failing to adapt-threat categorize environmental factors into opporunities and threats opportunities-capitalized in order to increase accuracy of decision making business managers should clearly outline their business model as well as the important environmental factors being considered
competitive intelligence
gives top executives a systematic way to collect and analyze public information about rivals and use it to make better decisions.40 Using techniques that range from Internet surfing to digging through trash cans, intelligence professionals dig up information on competitors' new products, manufacturing costs, or training methods and share it with top leaders. Intelligence teams are the newest wave of CI activities.
the emphasis on interdependency enables
global efficiencies and organizational learning
economic, technological, and competitive forces have combined to push many companies from domestic to a
global focus
ways to meet global challenges
global teams, stronger headquarters planning and control, and specific coordination roles
challenges of global design
greater complexity and differentiation, an increased need for integration, and more difficulty transferring knowledge and innovation.
cooperation is necessary for
greater innovation, problem solving, and performance. Partnerships are a major avenue for entering global markets.
Complex, stable environment
greater uncertainty
complex, unstable environment
greatest uncertainty
examples of trickle up innovation
groupe danome-built small plants in bangladesh Nestle- repositioned Maggi brand noodles as a budget friendly health food in australia and new zealand general electric- electronic machine for salie in india and sells in us as well as other countries hewlett-packard- has team in india looking for ways to migrate web-interface application created for mobile phones in asia and africa to developed markets in the us and europe john deere-developed high quality low-cost tractor for farmers in india that is now increasingly in demand in the us among farmers reeling from recession
international division
has a status equal to other major departments, and has its own hierarchy to handle international matters such as sales or opening subsidiary plants
Trickle-Up Innovation (Reverse Innovation)
has companies paying attention more than ever to the need for mechanisms that encourage sharing across the international enterprise.
in resource-dependent relationships, large independent companies
have power over smaller suppliers or partners. Amazon has power over small publishing companies, can ask for shipping deals or lower prices and the publishing companies have no choice but to go along
limitations on the ability of organizations to change
heavy investment in plants, equipment, and specialized personnel; limited information; the established viewpoints of decision makers; the organization's own successful history that justifies current procedures; and the difficulty of changing corporate culture.
a globalization strategy can save a company money because it
helps reap economy of scale efficiencies by standardizing product design and manufacturing, using common suppliers, introducing products around the world faster, coordinating prices, and eliminating overlapping facilities
environmental complexity
heterogeneity, or the number and dissimilarity of external elements (e.g., competitors, suppliers, industry changes, government regulations) that affect an organization's operations.
business intelligence
high-tech analysis of large amounts of internal and external data to spot patterns and relationships that might be significant.
theo chocolate
most important to control brand and the message, control the manufacturing from the bean, and the supply chain. build vertically integrated business/ barriers to entry so high in organic chocolate-only about 12 companies, control manufacturing and distribution business ethic informed by belief that all life on planet is interconnected fair trade certification-do what they say they are going to do fair for life- certification that ensures economic and social integrity average cocoa farmer earns less than a dollar a day -resort to slavery fair trade for cocoa farmers- transparent creating a profitable business model that has a good impact only fair trade certified organic chocolate triple bottom line company people, planet, profit at equal measure hold themselves accountable-IMO certification-hold to same fair trade standards as their farmers transparency at every level of supply chain most exciting thing-voice for chain, loyal following
interpersonal orientation
mostly tasks r&d, task manufacturing department, social sales department
joint venture
new and distinct organizational entity set up by two or more organizations to jointly develop an innovative product or shared technology. The successful video streaming site HULU, for example, is a joint venture that was set up by News Corporation (which owns Fox), Disney (which owns ABC), and Comcast
goals
new developments, quality-efficient production-customer satisfaction
global companies
no longer think of themselves as having a single home country and, indeed, have been called stateless corporations.31 This represents a new and dramatic evolution from the multinational company of the 1960s and 1970s. At this stage, ownership, control, and top management tend to be dispersed among several nationalities.
joint ventures
result in the creation of a new organization that is formally independent of the parents, although the parents will have some control.65 Madrid- based tech start-up FON formed a joint venture with British phone carrier BT to install FON wi-fi technology in the modems of nearly 2 million BT customers. Office Depot and Reliance Retail Limited, a division of India's largest private-sector employer, entered into a joint venture to provide office products and services to business customers in India. Food and agricultural corporation Cargill Inc. has numerous joint ventures around the world, such as the one with Spanish cooperative Hojiblanca to source, trade, and supply customers worldwide with private label and bulk olive oils.
knowledge transfer
s hindered by language, cultural, and geographic distances; protection of one's own division rather than cooperation; viewing knowledge as power one unit does not want to give up; the reluctance to use knowledge from elsewhere due to pride; and the fact that much of this knowledge is not written down.
boundary spanners
scan the environment. prevent the organization from stagnating by keeping top managers informed about environmental changes. The greater the uncertainty in the environment, the greater the importance of boundary spanners.
task environment
sectors with which the organization interacts directly and that have a direct impact on the organization's ability to achieve its goals. The task environment typically includes the industry, raw materials, and market sectors, and perhaps the human resources and international sectors.
instututional view
sees organizations as having two essential dimensions— technical and institutional.
for some industries, technological, social, or economic forces may create a situation in which
selling standardized products worldwide provides a basis for competitive advantage because it enable the company to keep costs lower than if it had to provide products tailored to each market global product appropriate
key reasons for collaboration include
sharing risks when entering new markets, mounting expensive new programs and reducing costs, and enhancing the organization's profile in selected industries or technologies.
most of the work to influence the external environment is accomplished jointly w/ other organizations that have
similar interest
multinational stage
the company has extensive experience in a number of international markets and has established marketing, manufacturing, or research and development (R&D) facilities in several foreign countries. The organization obtains a large percentage of revenues from sales outside the home country. Explosive growth occurs as international operations take off, and the company has business units scattered around the world along with suppliers, manufacturers, and distributors. Companies in the multinational stage include Siemens of Germany, Sony of Japan, and Coca-Cola of the United States. Aditya Birla Group is an example of a multinational based in India. explosion structure-worldwide geographic product structure market potential-very large, multinational
international stage
the company takes exports seriously and begins to think multidomestically
mimetic forces
the copying or modeling of other organizations. Benchmarking is a clear example of official copying, although when best practice techniques are duplicated, they may be improved.
natural sector
the external environment, including all elements that oc- cur naturally on earth, is of growing importance as consumers, organizations, and managers become increasingly sensitive to diminishing natural resources and the environmental impact of a company's products and business practices. Many companies have adopted a philosophy of sustainability, which refers to economic development that meets the needs of the current generation while pre- serving the environment for the needs of future generations as well. Caesars Entertainment, one of the world's largest gaming companies, created a scorecard to keep track of how well the company was doing at reducing energy consump- tion, recycling waste, reducing water consumption, and meeting other "green" goals. Managers found that the more information guests had about Caesars' sustainability practices, the better they felt about the company and the more likely they were to enjoy their stay at the casino and to book future visits.
domestic stage
the first stage of international development in which a company is domestically oriented while managers are aware of the global environment initial foreign involvement domestic structure plus export department moderate, mostly domestic details of freight forwarding, customs probem and initial foreign sales is handled through an export department
retention
the preservation and institutionalization of selected orga- nizational forms. Certain technologies, products, and services are highly valued by the environment. The retained organizational form may become a dominant part of the environment. Many forms of organization have been institutional- ized, such as government, schools, churches, and automobile manufacturers.
increased need for coordination
the quality of collaboration across the organizational units. The question is how to achieve the integration necessary for a global organization to reap the benefits of international expansion.
integration
the quality of collaboration among departments.44 Formal integrators are often required to coordinate departments.