Organising for Globalisation

Organizing for Globalization

If you misjudge the market [by globalizing], you are wrong in 15 countries rather than only in one.
Ford European Executive

Organizing for Globalization

Two opposing forces in structural decisions The need for differentiation (focusing on and specializing in specific markets) The need for integration (coordinating those same markets) Globalization a specific strategy that treats the world as one market by using a standardized approach to products and markets

Organizing for Globalization

Organizing to facilitate a globalization strategy typically involves rationalization and the development of strategic alliances Organizing for global product standardization necessitates close coordination among the various countries involved The problem facing companies in the future is that the structurally sophisticated global networks leave the organization exposed to the risk of environmental volatility from all corners of the world

Emergent Structural Forms

Inter-organizational networks The global e-corporation network structure The transnational corporation (TNC) network structure

Organizational Change and Design

When does a company need to make a change in organizational structure? Makes a change in goals or strategy Makes a change in scope of operations Indications of organizational inefficiency Conflicts among divisions and subsidiaries Overlapping responsibilities Complaints regarding customer

Inter-organizational networks
Views the various companies, subsidiaries, suppliers, or individuals as a relational networks Allows the different network partners to adopt unique structures that are adapted to the local context

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 Global Structural Arrangements (cont.)

Transnational Network Structures
Multinational structural arrangement that combines elements of function, product, and geographic designs, while relying on a network arrangement to link worldwide subsidiaries
Dispersed subunits Subsidiaries that are located anywhere in the world where they can benefit the organization Specialized operations Activities carried out by subunits that focus on a particular product line, research area, or market area Designed to tap specialized expertise or other resources in the companys worldwide subsidiaries Interdependent relationships Share information and resources throughout the dispersed and specialized subunits

Transnational Corporation
Involves linking foreign operations to each other and to headquarters in a flexible way
Leverages local and central capabilities

Not a matter of boxes on an organizational chart; it is a network of company units and a system of horizontal communication Requires the dispersal of responsibility and decision making to local subsidiaries Effectiveness is dependant on the ability and willingness to share current and new learning and technology across the network
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