Professional Documents
Culture Documents
66.511.202
Fall 2006
Ashwin Mehta, Visiting Faculty
Session 6
Global/Regional
(standardization)
Local
sales
Production
Logistics
Marketing
Frontline cust support
Procurement
R&D
Call Centers
Backend customer svc
Session 6
Potential Issues
Communication between Corporate & Businesses
Role of Business in Corporate Portfolio
Clarity of Business Strategies
Performance Metrics and Incentives
Structures
Session 6
Global Leader*
Session 6
Session 6
Functional division
International functions reporting into domestic functions
R&D functions reporting to domestic R&D, etc.
Low overhead, works well with limited product offers
coordination among functions could be a challenge
Product division
good for companies with many different offers (like consumer goods companies)
Redundancies
Geographical division
More popular with companies having large International presence
Matrix division
Better coordination/communication and information sharing
Complex
Potential for a politicized
Session 6
Groupe Bull
(France)
Product Line
Mgmt (PLM)
Strategy
Staff
Bull HN
(US)
R&D
Mfg
Mktg
Admin
Geographic
UK
Italy
International
Canada
Pacific
Bull
(France)
R&D
Mfg
Mktg
Admin
Sales
France
Germany
etc.
Session 6
President
Corporate
Staff
R&D
Operating
Companies
U.S.
Product
Group
A
Operating
Companies
Europe*
Product
Group
B
Operating
Companies
Latin
America
Product
Group
C
Operating
Companies
Africa
Operating
Companies
Asia*
Product
Group
B
*Note: Because of
space limitations,
product groups for
only Europe and Asia
are shown here.
Product
Group
D
Session 6
Global/MNEs
Before established companies adapted to new global environment
incremental markets view
Now --- new companies and industries are born global
primarily from developing countries (e.g. India)
home markets too small and moving to go global
Primary markets view
Accessing scarce resources (specially human)
Session 6
Global/Multinationals Challenges
Country Managers
CEO
SBU head
Business managers
Functional managers
Session 6
Up the (E) Organization! A Seven-Dimensional Model for the Centerless Enterprise, Neilson, et al,
Strategy+Bsiness, 2000
Session 6
Session 6
Costs
Divisional
Focus
Effectiveness
Fewer coordination issues
Quick response to changes
Coordination costs
Functional myopia
Loss of big picture
Bureaucracy
Session 6
Effectiveness
Cost per
Economics of scale
Duplication of resources
Coordination costs
Market share
Customer satisfaction
Revenue Growth
Time to market
Product introduction
Functional Structure
Doing Things Right
Divisional Structures
Doing Right Things
Session 6
Centralization Vs Decentralization
There are 2 basic forms of organization structures: Centralize or Decentralize --If one does not work, try the other!
Typically companies use both types of organizations
Right mix
Sequential Decision Process
Efficiency and Effectiveness requirements
Centralization/Decentralization mix
Tall Vs Flat Organizations
Inertia
Expertise issue
Responsibility
Lateral Communication
The Corporate Center
Primarily includes efficiency (HR, Legal, Purchasing, IT, etc.)
Expanded Center: Strategic Management function;
Executive Ed function; and Centers of Excellence
Session 6
Session 6
Session 6
Session 6
Matrix/Reciprocal
Highly unclear
Responsibility Matrix
Session 6
Ten Steps To A Global Human Resources Strategy, John A. Quelch, Helen Bloom Strategy+Business, 1999
Session 6
Use of Expats
Pros
- Product/culture knowledge
- Easy & Efficient corporate
relationships
-Technical/business skills not locally
available
-Transferable skills
-Protects/promotes company interests
in JVs, M&A
-Less chance of competition
-Career Path
Cons
-Hi Costs
-Black outs and Brown outs
-Long start-ups and wind down time
-Short sighted focus
-Out of sight, out of mind concern
-Re-entry issues
-Lack of available management
Session 6
Use of Locals
Pros
-Cheaper
-Language/culture of the country
-Local market/custom knowledge
-Skills in managing local staff
-Project local company image
-Educated
Cons
-Demand>Supply
-Takes time to bring to speed
-Lack corporate contacts
-Protection of IPs
-Control of JVs (loyalty concern)
Session 6
Session 6
Incentives
Incentives
Good objectives --- measurable
Incentives tied to objectives
Motivating objectives and incentives
Objectives should not be all or nothing
Reward the right things
Session 6
Incentives
Evaluation Controls
Strategy and Objectives
Actual performance
Significant deviation?
Cause-effect analysis/learning
Continue
Rewards/corrections Actions/change
Session 6
Behavior
Performance
Behavior
Performance
Session 6
Culture
Company/Corporate Culture
Sub-cultures and Managing Differences
National/Regional Culture
Work Vs Customer Implications
Session 6
Session 6
1980s
Cost
Innovation
Coordinating
Regional orgns
-overlapping structures
To minimize differences
1990s
New untapped
markets
Global management
-strategy
-technical programs
-marketing
O2005
Innovation
- GBU taking
over profit
Country level
-profit
Session 6
Organization 2005:
Objective: transform Global planning and management system into a
more innovative and quicker system
Old structure:
countries
GBU 1
GBU 2
GBU 3
Session 6
Session 6
The Legend
http://sk2us.com/index.htm
Session 6
The Discovery
The Ritual
Visualize
Empty your mind and visualize your skin now
and in the future.
Purify
Apply a small amount of cleanser with your
fingertips, using slow circular motions, until your
skin feels clean, awakened and refreshed.
Renew
To experience the Pitera magic, sprinkle about a
teaspoon of Facial Treatment Essence into the
cupped palm of your hand. Rub hands together
and press gently and evenly onto face and neck,
stimulating the renewal of the skins outer layer.
Enhance
Complete the Ritual with any of the following
treatment options based on your specific needs:
Anti-Aging, Illuminating, Refining, Nourishing
and/or Boosting.
Session 6
Session 6
Incremental revenues
Addresses prestige market segment
Diversifies P&Gs cosmetics product lines
Investment in sales and marketing will yield positive returns
Innovation should originate throughout the GBU
Coordination of national and regional strategies is the task of
the GBU
Session 6
Session 6
Session 6