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Mgt 485-11-2
Case Study Question(s)Due Monday, March 29thDue Monday, March 29th
Dan Simson: Project Mgr. Discuss the cultural dimension(s) of time (e.g.
temporal forces, past vs. future orientation, sequential vs. synchronous, orientation and value) and how they apply to this case
Discuss the organizational and strategic impacts, focusing on Dan Simson’s responsibilities to maximize his organization’s effectiveness (Profitabity, developing Human Resources, increasing market exposure)
Make and justify a recommendation as to how Dan Simson can be effective in this environment
Mgt 485-11-3
Determ inants of an Organization’s StructureW ork s pecializ ation S pecialization
S ubdivid ing “ tas ks ” in to s eparate jo bs (d iv is io n o f lab o r)C entralization C entralization
H ie rarch ic a l le ve l w ith autho rity to m ake a d ecis io nA uthority / r esponsib ility s tructur e H ierarchy o f a uthority
A b ility to p rovide d irectio n: W ho re ports to w ho mS pan o f c ontro l
R elated to H ie rarc hy: num be r o f e m ployees re porting to s upervis o r
C hain o f c om m andN um be r o f s upervis ors o verseeing ind iv id ual e m ployees
D epartm entalization C om plexityN um be r o f ac tiv itie s o r s ubsystem s w ith in the o rganizatio n
F orm alizationW ritte n d ocum e ntatio n (ru le s , p o lic ies , p rocedures )
S tandardizationS im ilar w o rk ac tiv itie s b eing d one in a uniform m anne r
P ersonnel r atiosD eploym e nt o f p eople to functions and d epartm ents
P rofessionalizationL eve l o f form al e ducatio n & tra in ing o f e m ployees
Mgt 485-11-4
Organizational Consequence of Internationalization
Aircraft Cameras Electronics Computers
Telecommunications
Aerospace
Autos
Synthetic fibers
Cement
Steel
Clothing
Packaged goods
High
Low
Low High
Pressure for Local Responsiveness
Pre
ssu
re f
or
Glo
balizati
on
Mgt 485-11-5
Goals and Strategy
Environment Size
Culture
Technology
Structure1. Formalization2. Specialization3. Standardization4. Hierarchy of Authority5. Complexity6. Centralization7. Professionalism8. Personnel Ratios
Mgt 485-11-6
Initial Division Structure
Used for Initial Entry into International Markets
Exporting Common first choice for manufacturers of
technologically advanced products Firm can charge premium price due to little
competition
Subsidiary A common for handling finance-related
businesses or other operations that require an on-site presence from the start
Mgt 485-11-7
Subsidiaries During the Early Stage of Internationalization
Home OfficeDepartments
OverseasSubsidiaries
CEO
Production Marketing Finance Personnel
V.P. InternationalOperations
France Japan Egypt Australia Argentina
Mgt 485-11-8
International Division Structure
Advantages Takes burden off the CEO Receives top management attention Promotes overall unified approach Develops internationally experienced managers
Disadvantages Separating domestic and international
managers may cause differing objectives Home office may not be able to allocate
resources globally, thereby penalizing growth
Mgt 485-11-9
An International Division Structure
Home OfficeDepartments
OperatingDivisions
CEO
Production Marketing Finance Personnel
DomesticDivision
DomesticDivision
DomesticDivision
DomesticDivision
InternationalDivision
Australia Japan Italy
OfficeOperations
Marketing Government Relations
Mgt 485-11-10
Global Product Division
Advantages Helps to manage diversity Able to cater to local needs Marketing, production, and finance can be co-
ordinated on a product-by-product global basis Disadvantages
Duplication of facilities and staff personnel Managers may pursue attractive short-term
sites instead of long-term sites Managers spend to much time trying to tap
local instead of international markets
Domestic divisions are given worldwide responsibility for product groups
Mgt 485-11-11
A Global Product Division Structure
CEO
Production Marketing
Finance Personnel
SouthAmerica
Africa Europe
Australia Far East
ProductDivision A
ProductDivision B
ProductDivision C
ProductDivision D
ProductDivision E
Production
Marketing Finance Personnel
Great BritainFranceGermanyItalyNetherlands
Mgt 485-11-12
Global Area Division
Advantages Reduces cost per unit Caters to local markets Makes rapid decisions to accommodate
environmental changes
Disadvantages Difficulty reconciling a product emphasis with
geographic orientation Ignores new research and development by
division groups
Based on geographic rather than product orientation
Mgt 485-11-13
A Global Area Division Structure
Home OfficeDepartments
OperatingDivisions
CEO
Production Marketing Finance Personnel
NorthAmerica
SouthAmerica Europe Asia Africa
Great BritainFranceGermanyItalyNetherlands
Mgt 485-11-14
Global Functional Division
Advantages Emphasizes functional expertise Tight centralized control Relatively lean managerial staff
Disadvantages Difficulty co-ordinating manufacturing and
marketing Difficulty managing multiple product lines Only CEO can be held accountable for
profits
Worldwide operations based primarily on function and secondarily on product
Mgt 485-11-15
A Global Functional Structure
CEO
Production Marketing Finance
DomesticProduction
Product AProduct BProduct CProduct D
ForeignProduction
Product AProduct BProduct CProduct D
DomesticProduction
Product AProduct BProduct CProduct D
ForeignProduction
Product AProduct BProduct CProduct D
Mgt 485-11-16
Mixed Organization Structures
Advantages Allows organization to create the specific
type of design to meet its needs Disadvantages
Complexity increases Difficulty arises in co-ordinating personnel
Combines global product, area, and functional divisions to supplement its primary structure with a secondary
one, and perhaps a tertiary (third) one
Mgt 485-11-17
A Multinational Matrix Structure
CEO
Production Marketing Finance Personnel
Manager,Industrial GoodsNorth America
Manager,Industrial GoodsEurope
North America Industrial Goods Europe
Mgt 485-11-18
Meeting the Challenges of Globalization
Synergy - (2 + 2 = 5) whole is greater than the sum of its parts
Organizational Synergy Pooling knowledge across regions Sharing resources to meet world-wide needs Pooling purchases for greater negotiating
power Coordinating strategies to become more
efficient Vertically integrating to be more cost effective Creating new businesses
Mgt 485-11-19
Strategies: Mutual adjustment Use of direct, technically skilled supervisors Use of integrative leadership Technical training provided in-house Use of standard milestones in work design Flexible design standards
Organizing for Product Integration
Mgt 485-11-20
Information Technology
Key Questions: Which information systems are needed? Are investments are worthwhile? How does technology fit into management’s
strategic thinking ? How should users and specialists connect
within the company? How do you design systems to improve
organizational performance?
Mgt 485-11-21
Organizational Characteristics3 most critical for international
operations Formalization
The use of defined structures used in decision making, communicating, and controlling
Objective - written descriptions Subjective -informal controls
Specialization The assigning of individuals to specific, well-
defined tasks Horizontal specialization Vertical specialization
Centralization Management system in which important decisions
are made at the top
Mgt 485-11-22
Symptoms of Structural Deficiency
Decisions are delayed or lacking in quality
Organization does not respond innovatively to a changing environment
Too much conflict from departments being at cross purposes is evident