International Business Chapter 12

What are the six structures within International Organization

1. Export 2. International 3. Geographic Area 4. Product 5. Functional 6. Global Matrix

What are the four strategies emerging from the IR Framework?

1. Global 2. International (Home Replication) 3. Multinational (Multi-domestic) 4. Transnational

Visionary leaders are characterized by which four major traits?

1. International mind-set and cosmopolitan values 2. Willingness to commit resources 3. Strategic vision 4. Willingness to invest in human assets

What are the pressures for local responsiveness?

1. Leverage natural endowments available to the firm 2. Cater to local customer needs 3. Accommodate differences in distribution channels 4. Respond to local competition 5. Adjust to cultural differences 6. Meet host government requirements and regulations

What are the pressures for global integration?

1. Seek cost reduction through scale economies 2. Capitalize on converging consumer trends and universal needs 3. Provide uniform service to global consumers 4. Conduct global sourcing of raw materials, components, energy and labor 5. Monitor and respond to global competitors 6. Take advantage of media that reaches buyers in multiple markets

What are the two basic needs of the IR Framework?

1. to integrate value chain activities globally (efficiency) 2. create products that are responsive (flexibility)

What defines a company that is proactively building a global organizational culture?

1. value and promote a global perspective in all major initiatives 2. value global competence and cross cultural skills among their employees 3. adopt a single corporate language for business communications 4. promote inter dependency between headquarters and subsidiaries 5. subscribe to globally accepted ethical standards

International Division Structure

An organizational design in which all international activities are centralized within one division in the firm, separate from domestic units

Multinational (Multi-domestic) Strategy

Approaches world as many nations (subsidiaries can make decisions) HQ delegates considerable autonomy to each country manager, allowing him or her to operate independently and pursue local responsiveness

What two types of structure are within organizational structure?

Centralized and decentralized

What are the three strategic objectives?

Efficiency, flexibility and learning

How can managers attempt to achieve global coordination and integration not just by subscribing to particular organizational design?

Globalizing mechanisms

Multi-domestic Industry

Industry in which competition takes place on a country by country basis

What is the Integration Responsiveness (IR) Framework?

It represents the competing pressures on the internationalizing firm

Global Integration

Left hand side of IR - coordination of the firms value chain activities across countries to achieve worldwide efficiency, synergy, and cross fertilization in order to take maximum advantage of similarities between countries

International (Home-Replication) Strategy

Leverages domestic capabilities worldwide; firms view international business as separate from, and secondary to, its domestic business

Local Responsiveness

Management of the firm's value chain activities on a country by country basis to address diverse opportunities and risks

What are two different global teams?

Strategic global teams and operational global teams

What characterizes a global firm?

Strategy, organizational structure, organizational processes, organizational culture and visionary leadership

As a general rule, _____ follows _____

Structure follows strategy

Efficiency

The firm must build efficient international value chains

Learning

The firm must create the ability to learn from operating in international environments and exploit this learning on a worldwide basis

Flexibility

The firm must develop worldwide flexibility to accommodate diverse country specific risks and opportunities

What is the global local debate?

a company cannot be efficient and flexible at the same time because they contradict one another

Product Structure

an arrangement in which management of international operations is organized by major product line

Geographic Area Structure

an organizational design in which management and control are decentralized to the level of individual geographic regions

Functional Structure

arrangement in which management of the firms international operations is organized by functional activity, such as production and marketing

Global Matrix Structure

arrangement that blends the geographic area, product and functional structures to leverage the benefits of a purely global strategy while keeping the firm responsive to local needs

Organizational Structure

describes the reporting relationships inside the firm or the "boxes and lines" that specify the links between people, functions, and processes that allow the firm to carry out its operations

Transnational Strategy

firm strives to be relatively responsive to local needs while retaining sufficient central control of operations to ensure efficiency and learning

Operational Global Teams

focus on the efficient and effective operation of the business across the whole network

Centralized Structure

gives HQ considerable authority and control over the firms activities worldwide

What are globalizing mechanisms?

global teams and global information systems

What is the fundamental issue in organizational structure?

how much decision making responsibility the firm should retain at headquarters and how much is should delegate to foreign subsidiaries and affiliates

Strategic Global Teams

identify or implement initiatives that enhance long term direction of the firm

Global Industry

industry in which competition is on a regional or worldwide scale

Global Team

internationally distributed group of employees charged with a specific problem solving or best practice mandate that affects company operations, worldwide

Organizational Processes

managerial routines, behaviors, and mechanisms that allow the firm to function as intended

Organizational Culture

pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt.

Strategy

planned set of actions managers employ to make best use of the firms resources and core competencies to gain competitive advantage

Visionary Leadership

quality of executive management that provides inspirational guidance and motivation to personnel, leading firm to a better future

Decentralized Structure

substantial autonomy and decision making authority are delegated to the firms subsidiaries around the world

Export Department

unit within the firm charged with managing the firms export operations

Global Strategy

views world as single unit of analysis; operations are managed centrally (subsidiaries mimic HQ) HQ seeks control in order to minimize redundancy and maximize efficiency