Organization Behavior

and Design
Management 689
Global Design
Global Design

GLOBAL DESIGN
Multidomestic Strategy
Company pursues separate strategies in each
of its foreign markets while viewing the
competitive challenge independently from
market to market.
Globalization Strategy

In a global business, management

competes worldwide. Various country
subsidiaries are highly
interdependent in terms of
operations and strategies.

Economic Performance /
Global vs. Multidomestic Strategy
Global
Multidomestic
Strategy
Strategy
(n=200)

ROA
Profit
10.7%
Domestic MS
World MS

(n=200)

10.9%

7.6%

13.2%
6.3%

2.2%
+2.6%

Many

Model to Fit Organization Structure

to International Advantages

Transnational
Transnational

Matrix
Matrix
Structure
Structure

International
International
Division
Division

Few

Opportunitie
s for
Globalizatio
n
Strategy

Global
Global
Product
Product
Structure
Structure

Few

Global
Global
Geographic
Geographic
Structure
Structure

Opportunitie
s
for
Page 4
Multidomesti
c

Many

The Export Stage

The Change of Business in Honda

Sales
until
1978

Brazil
Thailand

Belgium

England

USA

Japan

Canada

France
West
Germany

The Multidomestic Stage - Global

Geographic Structure
Production & Sales

Brazil
Thailand

Belgium

England

1979 - 1986
USA

Japan

Canada

France
West
Germany

Globalization Strategy
Central & South America

Europe
Asia/Nea
r
& Middle
East

Brazil
Thailand

Belgium

England

Europe
USA

Japan

West
Germany

Canada

France

Complex
physical
distribution
and
Japan will
information
no
flow
longer be
the
nucleus
Actualizing
Actualizing
Globalization
Globalization

There are 5 Key Characteristics which

distinguish a Global Competitive Strategy
from a Multidomestic Strategy.
Market participation in globally
These include:
strategic countries
Standardized / product or service
offering
Value chain activity location:
eliminates duplication
Uniform marketing methods

Global Platform Concept

Definition
A country is a desirable global platform in
an industry if it provides an environment
yielding firms domiciled in that country an
advantage in competing globally in that
particular industry
Success is measured OUTSIDE the country
Characteristics:
comparative advantage (factor endowment)
distinctive local demand structure (size,
timing, and demand attributes).

Why a Performance Increase?- Global Design

Lower costs
Better product
Information
arbitrage
Increased leverage

Global Design

GLOCAL?

Be Global

Act Local
What does this mean to you?
Advantages,
Disadvantages

Page 11

Trotman read the case

What are his goals for Ford?

What

are his Challenges?

Page 12

...BUT PLENTY OF
CHALLENGES REMAIN
What concerns would you express to
Trotman if you were his advisor in
terms of areas to be cautious about
the Global Integration Plans?
He stated that he shifted to a product
oriented team from a functional team
In terms of a global company what are
the benefits/drawbacks?

13

Managing Conflict: Objectives

Understand sources of conflict

Understand the impact of culture and

diversity on managing conflict

Discuss productive versus

counterproductive approaches to
conflict

Communication

Conflict management
style/strategy

Practice Negotiation skills

14