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54 Cards in this Set

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The basic functional structure works best when the organization has the following:
- Few products
- Few locations
- Few types of customers
- A stable environment
- Routine technology
Departments or subunits based on different product groups
Product structure
Departments or subunits based on geographic regions
Geographic structure
•Usually less efficient than the functional organization
•Allows a company to serve customer needs that vary by region or product
Basic & geographic structure
Managers choose product structures when:
•Product or an area sufficiently unique to require focused functional efforts on one type of product or service
Mixes functional, geographic, and product units
Hybrid structure
•When company first goes international, it seldom changes structure.
Passive exporter
•Licensing has little impact on domestic structures.
•However, when international sales become more central, structures need to be changed.
True
•Coordinates and controls a company’s export operations
-Is created when exports become significant
-Deals with international sales of all products
Export Department
•Subunit of the multinational company that is located in another country
Foreign Subsidiaries
Smaller version of the parent company
•Uses the same technology and producing the same products as the parent company
Mini-replica subsidiary
Has no companywide form or function
•Each subsidiary contributes what it does best
Transnational subsidiary
•Multinationals choose the mix of functions based on:
-The firm’s multinational strategy or strategies

-The subsidiaries’ capabilities and resources

-The economic and political risk of building and managing a subunit in another country

-How the subsidiaries fit into the overall multinational organizational structure
The International Division has the following characteristics:
•Larger and has greater responsibilities compared to the export department

•Responsible for managing exports, international sales, and foreign subsidiaries

•Usual step after export department

•Deals with all products

•Manages overseas sales force and manufacturing sites
What are the reasons to abandon the International division?
-Diverse products overwhelm capacities of multinational

-Not close enough to local markets

-Cannot take advantage of global economies of scale or global sources of knowledge
What are four options available to deal with these shortcomings?
-Worldwide product structure

-Worldwide geographic structure

-Matrix structure

-Transnational-network structure
•Has geographical units representing regions of the world

-Prime reason is to implement a multidomestic or regional strategy

-Organizational design with maximum geographic flexibility

-Separate divisions for large market countries
Worldwide Geographic Structure
-Gives product divisions responsibility to produce and sell their products or services throughout the world

-Implements strategies that emphasize global products

-Provides an efficient way to organize and centralize the production and sales of similar products
Worldwide Product Structure
Supports global products
Product Structure
Emphasizes local adaptation
Geographic Structure
•The front side has units based on geography to provide a multidomestic or regional focus

•The backside has units based on product groups to capture global economies of scale in R&D and production
Front-back Hybrid Structure
In the Worldwide Matrix Structures, it is an symmetrical organization with equal emphasis on what two things?
Worldwide product groups and Regional geographical divisions
•Geographic divisions focus on national responsiveness and product divisions focus on finding global efficiencies

•Balances the benefits produced by area and product structures

•Creates equal lines of authority for products and areas

-Works best with near equal demands from both sides

•Requires extensive resources for communication and coordination

•Requires middle and upper level managers with good human relations skills
Worldwide Matrix Structures
What are the problems with Matrix structures and what could happen as a result?
-Slow decision making process

-Too bureaucratic

The Result:

-Some companies have abandoned their matrixes and returned to product structures

-Other companies have redesigned their matrix structures to be more flexible with speedier decision making


-Too many meetings and too much conflict
Smaller organizations that take advantage of the Web to operate globally from Day One
Micro-multinational companies
What are the characteristics of a Micro-Multinational Company?
-They operate as born-global firms from the day they are founded, and they operate everywhere around the world

-They are willing to start operations and hire workers from around the world and from where it makes the most sense to do so

-They are more likely to use various state-of-the-art technology for communication purposes
Helps link the organization vertically, up and down the organizational hierarchy
Control system
What are the basic functions of a control system?
- Measure or monitor the performances of subunits

-Provide feedback to subunit managers regarding the effectiveness of their units
Horizontal organizational links
-Provide information flows among subsidiaries
Coordination system
What are the four types of control systems?
1. Output control system

2. Bureaucratic control system

3. Decision-making control

4. Cultural control system
•Assesses the performance of a unit based on results, not on the processes used to achieve these results
Output Control Systems
Unit controlled by its profit or loss performance
Profit center
•Focuses on managing behaviors within the organization
Bureaucratic control system
The bureaucratic control system ahs what three features?
Budgets, statistical reports, & standard operating procedures
Financial targets for expenditures
Budgets
Information to top management about nonfinancial outcomes
Statistical reports
Rules and regulations of appropriate behavior
Standard operating procedures (SOPs)
The control & coordination systems has what two characteristics?
Decision making control & Cultural control system
Level in the organizational hierarchy where managers have the authority to make decisions
Decision-making control
Uses organizational culture to control behaviors and attitudes of employees
Cultural control system
What are the design options for Coordination systems?
-Textural communication

-Direct contact

-Liaison roles

-Task forces

-Full-time integrators
E-mail, memos, and reports
Textual communication
Face-to-face interaction of employees
Direct contact
Part of a person’s job in one department to communicate with people in another department
Liaison roles
Temporary teams created to solve a particular organizational problem
Task forces
Cross-unit coordination is the main job responsibility
Full-time integrators
Permanent unit of the organization
Teams
Groups of people from different parts of the world who work together by using information and communication technologies such as intranets, web meetings, WIKI’s, e-mails and instant messaging
Global virtual teams
What are the problems with Global teams?
•Team members’ native languages are different

•Differences in cultural background

•Global teams dominated by headquarters’ perspectives and experiences

•Major challenges in building team collaboration

•Challenges in meeting programmatic objectives
What are steps to ensure the global teams collaborate to function effectively?
•Build relationships and trust

•Devote significant attention to project planning and hold project progress meetings regularly

•Cultural, language, and active-listening training

•Be aware of team-development stage
Refers to the systems, mechanisms, and other design elements of any organization to ensure that the right form of knowledge is available to the right individual at the right time
Knowledge management
Found in records or other repositories of information
Explicit form
Represents the knowledge that usually resides within employees and is dependent on the organization’s culture and context
Tacit knowledge
Knowledge Management: What are Some Steps to Develop Successful System?
•Identify/support knowledge activists

•Make knowledge management part of the general strategy

•Provide financial and human resources support

•Emphasize importance of communication

•Celebrate success