The strategy –structure linkage for the international firm
* The companies are structured to link:
* The behavior of individuals
* To collect and pool information , skills or capital
* To engaged in related actions to achieve a set of goals
* To monitor performance, iniate corrections, define new goals.
Two dimensional org:
* Product line demands.
* Environmental concerns
-functional and client expertise
-product and techs know how
Knowledge of countries
Companies expand through:
* Vertical: new activities along the value chain or in the product line.
* Product: new products markets, wheter related or unrelated to its current core business.
* Geographic:take the firm into overseas markets, creation the multinational enterprise.
Appropriate for a multinational
* Functional expertise of the value chain activities in which the firm is involved.
* Product and tech know how of their various lines of business in which the firm is involved.
* Knowledge of the countries and regions where the business has interest
* Customer expertiseregarding similar markets segments and major accounts.
An international firm must effectively link its
* Systems strategy
Stages for a company to begin international
1. pre international division phase:
- Domestic market management concerns about: strategies (president-manager).
-little need to developed expertise in theforeign markets
-assistance in exporting provided by a EXPORT MANAGMETN COMPANY, later by in-house export manager.
-more investment in subsidiaries (financial performance)=headquarter staff group of international activities =more complex structure
2. international division structure:
1. all international activities are grouped (senior executive called vice president of internationaldivision or director of international activities)same divisional heads levels. Line authority over foreign subsidiaries.
2. Organizations segregation (domestic and international) there is a limited contact between both departments.
3. Subsidiaries (autonomy ,guidance and support)
4. Executives are able to supervise the establishment and growth of one or more product lines in several foreignmarkets, and develop new opportunities for expansion in other.
6. The concentration of international executives that are expertise in foreign operations.
7. The international group provides a unified position regarding the company’s activities in different countries.
8. Investment decisions can be made on a global basis and overseas development can turn tointernational capital markets.
10. Separation and isolation of domestic managers from their international counterparts
11. Conflict between the domestic and international groups.
3. Global hierarchical structure.
-this important stage happen when the international sales and market is important and size as the domestic one.
-the top management begins to see theenterprise like a truly multinational enterprise.
-the domestic-foreign bifurcation is abandoned in favor of an integrated worldwide integration.
-the structure ranks staff member who are experts in a pyramid according to the difficulties of the problems they can solve.
-corporate decision is made with a total company perspective (mission and objectives).
-this change must be accompanied by theacquisition and allocation of company resources on the basis of global opportunities and threats.
-a world wide area or worldwide product-----bases in two orientations.
The global product structure
-product division gets responsibly for products or groups (all functional activities)
-semiautonomous profit center (decentralized but with an umbrella)
* Ease and directness of flow of...