International business

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CNU / Graduate School of Business/ International Business 2010-03-02
Prof: Kang, Tae-koo
Student: Parvin Novruzov
ID: 96805

CHAPTER 13

3. Describe the organizational architecture atransnational firm might adopt to reduce the costs of control.
- The term organizational architecture – including organizational structure, control systems and incentives, organizational culture, processesand people and are not independent of each other within a transnational firm and might adopt to reduce the costs of control with wise management and by establishing successful link within theseelements.
4. If a firm is changing its strategy from an international to a transnational strategy, what are the most important challenges it is likely to face in implementing this change? How can the firmovercome these challenges?
- Which simultaneously pursue location and experience curve economies, local responsiveness, and the transfer of core competencies and skills all of the firm’s subunitsrequire more coordination than in firms pursuing an international strategy. In addition, it requires coordination between foreign subunits and the firm’s globally dispersed value creation activities toensure that any product offering and marketing strategy is sufficiently customized to local conditions.
Reread the Management Focus on Wal-Mart’s International Division and answer the followingquestions:

a. Why did the centralization of decisions at the headquarters of Wal-Mart’s international division create problems for the company’s different national operations? Has Wal-Mart’s responsebeen appropriate?
Country managers had to get permission from their Headquarter managers before changing strategy and operations and this was leading slow decision making. Centralization also wasoverloaded with information which concludes some poor decisions. It was appropriate in terms of management system to execute decisions according to the localization, But they need to find some way to...
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