...The Organization of International Business Organizational structure at Procter and Gamble Procter and gamble unique organizational structure offers the global scale benefits of an international company and the local focus to be relevant for customers in roughly 180 countries where their brands are solid. The company corporate structure provides the framework that allows them to tap the benefits of a global operation keep them in touch with local communities, and their strong governance practices ensure that they carry out operations with consistently high standard and integrity. Procter and gamble have made their organization structure an important part of their capability to grow. It combines global scale benefits with a local focus to win with consumers and retail customers in each country where P & G products are sold. Procter and gamble recently grouped its global business units into four industry-based sectors as part of the company’s on-going plan to improve business performance. The businesses in each sector are focused on common consumer’s benefits, share common technologies and face common competitors. Procter and gamble structure has removed many of the traditional overlaps and inefficiencies that exist in many large companies. Four organizational structure Procter and gamble uses: Market development organizations: are charged with knowing consumers and retailers in each market where Procter and gamble competes and integrating the...
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...explain the advantages and disadvantages of different international strategies and organisational structures for large multinational enterprises. In your answer you should discuss the relationship between strategies and structures and the conditions under which particular strategies and structures are more or less appropriate. You must also use models of strategies and structures as discussed during the course and presented in the textbook. One example of a case could be IBM’s transformation towards a more global model, but you can choose any similar case as long as some information on the case is publicly available. “This is to certify that the work I am submitting is my own. All external references and sources are clearly acknowledged and identified within the contents. I am aware of the University of Warwick regulation concerning plagiarism and collusion. No substantial part(s) of the work submitted here has also been submitted by me in other assessments for accredited courses of study, and I acknowledge that if this has been done an appropriate reduction in the mark I might otherwise have received will be made.” Table of Contents 1. Introduction 3 1.1 Essay Structure 3 2. The Firm – Huawei – The “Glocalized” MNE 4 2.1 Early Beginnings 4 2.2 The first steps to Internationalization 5 2.3 Entry into Advanced Markets 5 2.4 The Push into the Triad 5 3. Literature Review and Analysis 7 3.1 Strategy and...
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...Organizational Architecture? * Organizational architecture is the totality of a firm’s organization including: 1. Organizational structure * the formal division of the organization into subunits * the location of decision-making responsibilities within that structure - centralized versus decentralized * the establishment of integrating mechanisms to coordinate the activities of subunits including cross-functional teams or pan-regional committees 2. Control systems and incentives * control systems - the metrics used to measure performance of subunits * incentives - the devices used to reward managerial behavior 3. Processes, organizational culture, and people * Processes - the manner in which decisions are made and work is performed within the organization * Organizational culture - the norms and value systems that are shared among the employees of an organization * People - the employees and the strategy used to recruit, compensate, and retain those individuals and the type of people they are in terms of their skills, values, and orientation Figure of Organization Architecture What Are The Dimensions Of Organizational Structure? * Organizational structure has three dimensions: 1. Vertical differentiation - the location of decision-making responsibilities within a structure 2. Horizontal differentiation - the formal division of the organization into sub-units 3. Integrating mechanisms - the...
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...architecture—(organization structure, control systems, incentives, processes, organizational culture and people) Organizational Structure • Organizational structure has three dimensions: 1. Vertical differentiation - determines where decision-making power is concentrated within a structure 2. Horizontal differentiation - the formal division of the organization into sub-units 3. The establishment of integrating mechanisms - the mechanisms for coordinating sub-units Vertical Differentiation: Centralization • Facilitates coordination of activities Eg. A firm has a component manufacturing operation in Taiwan and an assembly operation in Mexico • Ensure decisions consistent with organization’s objectives • Allows top-level managers to bring about organizational change • Avoids duplication of activities Eg. Many international firms centralize their R&D functions into one or two locations to ensure the R&D work are not duplicated. Decentralization • Takes advantage of local information, which may result in better and faster decisions • Can motivate employees • Relieves top management • Can increase control in self-contained subunits • It can be worthwhile to centralize some decisions and decentralize others, e.g., centralizing control over core competencies while decentralizing operating decisions Horizontal Differentiation: The Design Of Structure • Horizontal differentiation is concerned with how the firm decides...
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...Manag Int Rev (2011) 51:179–192 DOI 10.1007/s11575-011-0071-6 R e s e a R c h a Rt i c l e Effective Global Strategy Implementation Structural and Process Choices Facilitating Global Integration and Coordination Attila Yaprak · Shichun Xu · Erin Cavusgil Abstract: 0 0 this article offers a contingency framework of global strategy implementation effectiveness on firm performance. The research question we seek to address is what the structural and process requirements are for MNEs to successfully implement global strategy through increased efficiency and effectiveness of integration and coordination across world markets. Our central premise is that MNEs’ capabilities in establishing supporting structural and process mechanisms will enhance the effectiveness and efficiency of implementing their global strategies which would, in turn, lead to better firm performance. Keywords: Integration and coordination · Global strategy · Firm performance · contingency framework Received: 25.12.2009 / Revised: 15.08.2010 / Accepted: 11.10.2010 / Published online: 02.04.2011 © Gabler-Verlag 2011 Prof. A. Yaprak () Department of Marketing, Wayne State University, Detroit, USA e-mail: Attila.yaprak@wayne.edu Asst. Prof. S. Xu Department of Marketing and Logistics, University of Tennessee, Knoxville, USA Asst. Prof. E. Cavusgil Department of Marketing, University of Michigan-Flint, Flint, USA 180 A. Yaprak et al. Introduction The globalization of the world economy...
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...IMPLEMENTING STRATEGIES: MANAGEMENT AND OPERATIONS ISSUES CHAPTER OUTLINE | |The Nature of Strategy Implementation | | |Annual Objectives | | |Policies | | |Resource Allocation | | |Managing Conflict | | |Matching Structure with Strategy | | |Restructuring, Reengineering, and E-Engineering | | |Linking Performance and Pay to Strategies | | |Managing Resistance to Change | | |Creating a Strategy-Supportive Culture | | |Production/Operations Concerns When Implementing Strategies ...
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...Market Structures and Pricing Strategies Kiona Thomas American Public University Econ600 Abstract The article analyzes the four main market structures, which are perfect competition, monopolistic competition, oligopoly and monopoly. It provides a detail description of the market, as well as explains the pricing strategy a firm would pursue in that particular market. The article also concludes with a real world example of Visa pricing strategy by examining it oligopoly market structure. Visa has few competitors; however, it must continuously monitor its competitor’s actions in order to remain competitive in today’s market. While, Visa is currently out performing it competitors, they are constantly trying to expand their market. Keywords: market structure, pricing strategy, Potomac Edison Market Structures and Pricing Strategies Introduction Economist can divide today’s market into four different market structures, which are perfect competition, monopolistic competition, oligopoly and pure monopoly. The market structure will help the firm select their pricing strategy. Each market structure has a different pricing strategy the organization can use to achieve profit maximization. Perfect Competition What is perfect competition? Perfect competition is sometimes referred to as pure competition (Officer, 1966). According to Robinson (1934), perfect competition is “a state of affairs in which the demand for the output of an individual seller is perfectly elastic”...
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...1. Diversification strategy (Scenario) Definition and Example: Specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets. Diversification strategy is expected to help firm earn above-average returns while profit came from different sources of market. Perhaps is also should increase firm overall performance. Value ultimately determined by degree to which the businesses in the portfolio are worth more under the management of the company then they would be under any other ownership. (eg: Types: a. Low Levels Single Business Strategy is Corporate-level strategy in which the firm generates 95% or more of its sales revenue from its core business area (operating in relatively few product markets). Eg: Wrigley only produces chewing and bubble gums. Dominant Business Diversification Strategy is Corporate-level strategy whereby firm generates 70-95% of total sales revenue within a single business area. Eg: UPS generated 61% of its revenue from its US package delivery biz and 22% from its international package biz, with the remaining 17% coming from the firm’s non-package biz. b. Moderate to High Levels Related Constrained Diversification Strategy—Firms generate less than 70% of revenue comes from the dominant business. The firm’s businesses are direct links with each other and share resources and activities between its...
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...Implementing Strategy in Companies That Compete in a Single Industry SYNOPSIS OF CHAPTER Chapter 12 examines how managers can best implement their strategies in single-industry firms in order to achieve a competitive advantage and superior performance. First, the main elements of strategy implementation—structure, control systems, and culture—are analyzed in detail, focusing on the way they work together to create an organizing framework. Then the chapter turns to the topic of using structure, control, and culture at the functional level to build distinctive competencies. After that, the chapter addresses the challenges of implementing the generic business strategies of cost leadership or differentiation in a single industry. The final section covers restructuring and reengineering, two strategies that single-business firms can use to improve corporate performance. The next chapter takes up where this one leaves off and examines strategy implementation across industries and across countries—that is, implementing corporate and global strategy in firms that compete in more than one industry. TEACHING OBJECTIVES 1. Introduce the main elements of strategy implementation—structure, control systems, and culture—and their relationships to each other. 2. Demonstrate how structure, control, and culture can build distinctive competencies at the functional level. 3. Describe the use of structure, control, and culture in implementing a single-business firm’s generic business strategy. 4...
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...Chapter 11 Global Strategy and Organization International Business Strategy, Management & the New Realities by Cavusgil, Knight and Riesenberger International Business: Strategy, Management, and the New Realities 1 Learning Objectives 1. The role of strategy in international business 2. The integration-responsiveness framework 3. Distinct strategies emerging from the integration-responsiveness framework 4. Organizational structure 5. Alternative organizational arrangements for international operations 6. Building the global firm 7. Putting organizational change in motion International Business: Strategy, Management, and the New Realities 2 What Is Strategy? • Strategy is a plan of action that channels an organization’s resources so that it can effectively differentiate itself from competitors and accomplish unique and viable goals. • Managers develop strategies based on the organization’s strengths and weaknesses relative to the competition and assessing opportunities. • Managers decide which customers to target, what product lines to offer, and with which firms to compete. International Business: Strategy, Management, and the New Realities 3 Strategy in an International Context • Strategy in an international context is a plan for the organization to position itself vis-a-vis its competitors, and resolve how it wants to configure its value chain activities on a global scale. • Its purpose is to help managers create an international vision, allocate resources...
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...Market Structures and Pricing Strategies Kiona Thomas American Public University Econ600 Abstract The article analyzes the four main market structures, which are perfect competition, monopolistic competition, oligopoly and monopoly. It provides a detail description of the market, as well as explains the pricing strategy a firm would pursue in that particular market. The article also concludes with a real world example of Visa pricing strategy by examining it oligopoly market structure. Visa has few competitors; however, it must continuously monitor its competitor’s actions in order to remain competitive in today’s market. While, Visa is currently out performing it competitors, they are constantly trying to expand their market. Keywords: market structure, pricing strategy, Potomac Edison Market Structures and Pricing Strategies Introduction Economist can divide today’s market into four different market structures, which are perfect competition, monopolistic competition, oligopoly and pure monopoly. The market structure will help the firm select their pricing strategy. Each market structure has a different pricing strategy the organization can use to achieve profit maximization. Perfect Competition What is perfect competition? Perfect competition is sometimes referred to as pure competition (Officer, 1966). According to Robinson (1934), perfect competition is “a state of affairs in which the demand for the output of an individual seller is perfectly elastic”...
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...control the strategic direction and performance of organization. Effective governance that aligns managers’ decisions with shareholder’s interests can help produce a competitive advantage for the firm. * Three internal governance mechanisms (1) Ownership concentration, (2) The board of directors, (3) Executive compensation. The market of corporate control is an external governance mechanism. This market is a set of potential owners seeking to acquire undervalued firms and earn above-average returns on their investments by replacing ineffective top-level management team. * Ownership is separated from control in the modern corporation. Owners hire managers to make decisions that maximize the firm’s value. Thus, modern corporations are characterized by an agency relationship that is created when one party hires and pays another party to use its decision making skills. As risk-bearing specialists, owners diversify their risk by investing in multiple corporations with different risk profiles. * In a large number of family-owned firms, ownership and managerial control are not separated at all. Family-controlled firm face at least two problem related to corporate governance. First, as they grow, they may not have access to all of the skilled to effectively manage the firm. Second, they may need to seek outside capital and thus give up some of ownership. *...
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...CHAPTER 12 Implementing Strategy in Companies That Compete in a Single Industry Synopsis of Chapter Chapter 12 examines how managers can best implement their strategies in single-industry firms in order to achieve a competitive advantage and superior performance. First, the main elements of strategy implementation—structure, control systems, and culture—are analyzed in detail, focusing on the way they work together to create an organizing framework. Then the chapter turns to the topic of using structure, control, and culture at the functional level to build distinctive competencies. After that, the chapter addresses the challenges of implementing the generic business strategies of cost leadership or differentiation in a single industry. The final section covers restructuring and reengineering, two strategies that single-business firms can use to improve corporate performance. The next chapter takes up where this one leaves off and examines strategy implementation across industries and across countries—that is, implementing corporate and global strategy in firms that compete in more than one industry. Teaching Objectives 1. Introduce the main elements of strategy implementation—structure, control systems, and culture—and their relationships to each other. 2. Demonstrate how structure, control, and culture can build distinctive competencies at the functional level. 3. Describe the use of structure, control, and culture in implementing a single-business...
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...INTERNATIONAL STRATEGIES (Jay B Barney) Summary International Strategies can be seen as a special case of diversification strategies. Firms implement international strategies when they pursue business opportunities that cross country borders. Like all diversification strategies, international strategies must exploit real economies of scope that outside investors find too costly to exploit on their own in order to be valuable. Five potentially valuable economies of scope in international strategies are: 1. To gain access to new customers for a firm’s current products or services 2. To gain access to low-cost factors of production, 3. To develop new core competencies 4. To leverage current core competencies in new ways and 5. To manage corporate risk. To be a source of sustained competitive advantage, a firm’s international strategies must be valuable, rare and costly to imitate and the firm must be organized to realize the full potential of its international strategies, these strategies can still be rare, for at least two reasons : 1. Given the broad range of international opportunities, firms may not compete head to head with other firm pursuing the same international strategies that they are pursuing and 2. Firms may bring valuable and rare resources and capabilities to the international strategies they pursue. Both direct duplication and substitution can affect the imitability of a firm’s international strategy. Direct duplication is not likely when firms bring valuable...
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...Chapter 7: * Merger: a strategy through which two firms agree to integrate their operations on a relatively co-equal basis * Acquisition: a strategy through which one firm buys a controlling, or 100% interest in another firm with the intent of making the acquired firm a subsidiary business within its portfolio. After acquisition, management of the acquired firm report s to the management of the acquiring firm * Takeover: a special type of acquisition when the target firm did not solicit the acquiring firm’s bid for outright ownership * Friendly acquisition: the management of the target firm wants the firm to be acquired * Unfriendly acquisition (hostile takeover): the management of the target firm does not want the firm to be acquired (direct negotiations with the firm’s owners; tender offer; bear hug) Explain the popularity of acquisition strategies in firms competing in the global economy * There are seven reasons why acquisitions in firms competing in the global economy work * Increased Market Power: * This is the primary reason for acquisition * If a firm achieves enough market power, it can become market leader * Example: AT&T acquisition with T-Mobile made them in the lead with market share in w-ireless service providers * Also, not only would their market share increase, but their customers would increase by 1/3 and all cell towers and wireless spectrum that t-mobile had would also turn to AT&T ...
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