International Business Chapter 14

29 cards·by lizarusakova

What 3 things are included in organizational architecture?

1.Location of decision-making responsibilities within the structure 2.Organization intosubunits 3.Establishment of integrating mechanisms

What do control systems measure?

The performance of subunits. They also judge how managers operate subunits

What are the incentives used for in organization?

To reward the appropriate managerial behavior

What is organizational culture?

The norms and values shared among the employees of organizaiton

The second way to describe organizational structure with 3 characteristics

1.Vertical differentiation(dec-mak location)2.Horizontal differentiation(sub-units organization)3.Integrating mechanisms(coordinate subunit

What is blue ocean strategy?

Strategy with the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. No competitors

Name 2 types of vertical differentiation

Centralization and decentralization

What are the main arguments for centralization strategy?

Facilitate coordination, ensure decisions consistency, easier implement changes,avoid duplication of responsabilities

What are the main arguments for decentralization?

Employee motivation,greater flexibility(rapid response),better decisions(closer toactivities),increase control in subsidiaries(local control

Matching of vertical differentiation and international strategies.

Global standartization-Centr,Localization-Decen,Transnational-C and D

4 ways of horizontal differentiation or division into subunits

By function(common for start-up),type of business(bu product),geographical area(by country),combination

Characteristics of worldwide area structure

-Facilitates local responsiveness -Org.divisions are self-contained and autonomous-Firms: low diversification+domestic function structure

Characteristics of worldwide product divisional structure

-High global standardization,Autonomous divisions,Strategic-financial control of headquarter,Diversified firms(domestic product division)

What is Global Matrix Structure?

Horizontal differentiation along two dimensions:product and geographic area division. transnational strategy. Transnational strategy

What is international division?

Creating internat division when frim first internationalize.OK at first,then problems(lack of coordination,voice).International structure

Types of formal integrating mechanism

Direct contract,liaison roles,teams,matrix structure

4 types of control system in multinational firm

Personal,bureaucratic,output and cultural control

What is the personal control?

Control by personal contact with subordinates

What is the bureaucratic control?

Control through a system of rules and procedures that directs the actions of subunits.

What is output control?

Setting goals for subunits to achieve, expressing them in terms ofprofitability,productivity, market share, and quality

What is cultural control?

When employees “buy into” the norms and value systems of the firm(strong culture that control employees)

How would you describe the performance ambiguity?

Situation when the causes of poor performance are not clear(subunit’s performance dependent on performance of other).Transnational firm

How can we define processes in the firm?

The manner in which decisions are made and work is performed within the organization

Two basic remarks about managing processes in the multinational c xompany

Many processes cut organizational and national boundaries;new valuable process can be developed anywhere in global operations network

Factors that can influence the company's culture

Leader(founder);broader culture of nation where firm was founded;history of firm with shaped values

Firm's culture can be maintained by...

Hiring and promotional practices;reward strategy;socialization str(training,friendly advice froom boss);communication str(stories,symbols)

What is strong corporative culture?

All managers have consistent set of values that have impact on how work is performed

Sources of company's inertia(hard to change companies structure etc)

Existing power and influence distribution;culture;CEO perception of appropriate business model;institutional constrains(national limits)

3 basic subsequent principles for successful organizational changes

Unfreeze through shock therapy;move to new state through proactive architecture;refreeze organization in new state