全球戰(zhàn)略管理課件

1GLOBALSTRATEGICMANAGEMENT10-MultinationalStrategies,Structures,andLearning1GLOBALSTRATEGICMANAGEMENT1Copyright?2009Cengage.Allrightsreserved.10–2OutlineMultinationalstrategiesandstructuresAcomprehensivemodelofmultinationalstrategy,structure,andlearningWorldwidelearning,innovation,andknowledgemanagementDebatesandextensionsThesavvystrategistCopyright?2009Cengage.AllToyotaas(Almost)No.1For30yearsToyotahasbeenwideningthegapbetweenitselfandrivalsAlmosttheNo.1byvolume2007–70thanniversaryoffoundingand50thsincestartingtoimportintotheUS2007only3000salesawayfromGMwhichhasheldtopspotsince1931Copyright?2009Cengage.Allrightsreserved.10–3Toyotaas(Almost)No.1For30Toyotaas(Almost)No.1MaybedeliberatelyholdingbacktoavoidpossibleprotectionismintheUSToavoidemployeesfrombecomingtooarrogantStartedwithandexportstrategyNowmanufacturesafullvehiclerangein21countries,includingChinaCopyright?2009Cengage.Allrightsreserved.10–4Toyotaas(Almost)No.1MaybeToyotaas(Almost)No.1InUSToyota:1970=2%ofsales(GM40%)1980=3%1990=8%2000=9%2006=13%(GM26%)2007=16%(GM24%)1995=26factories2007=63factoriesCopyright?2009Cengage.Allrightsreserved.10–5Toyotaas(Almost)No.1InUSToyotaas(Almost)No.1HowtokeepToyota,Toyota?2007qualityproblemsConsumerReportsmagazinedropsCamryV6sedan,LexusGS,TundrapickupfromrecommendedlistWouldnolongerrecommendToyotawithoutreliabilitydataNolongerassumptionofqualityorreliabilityCopyright?2009Cengage.Allrightsreserved.10–6Toyotaas(Almost)No.1HowtoToyotaas(Almost)No.1Toyotastepstoaddress‘growingpains’1.Documentedthe‘ToyotaWay’previouslyexplicit2.Increasedtraining3.Morelearningandknowledgetransferamongoverseassubsidiaries,especiallyfromCanadaandKentuckyCopyright?2009Cengage.Allrightsreserved.10–7Toyotaas(Almost)No.1ToyotaCopyright?2009Cengage.Allrightsreserved.10–8MultinationalStrategiesandStructuresPressuresforcostreductionsandlocalresponsivenessFourstrategicchoicesforMNEs(1)homereplication,(2)multidomestic,(3)global,and(4)transnationalHomereplicationstrategyemphasizestheinternationalreplicationofhomecountry-basedcompetenciesLocalization(multidomestic)strategyisanextensionofthehomereplicationstrategyGlobalstandardizationstrategyistheoppositeofthemultidomesticstrategyTransnationalstrategyaimstocapture“thebestofbothworlds”byendeavoringtobebothcostefficientandlocallyresponsiveCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–9MultinationalStrategiesandStructures:

TheIntegration–ResponsivenessFrameworkFigure10.1Copyright?2009Cengage.All4StrategicChoiceforMultinationals10–10StrategicChoiceADVANTAGESDISADVANTAGESHomereplication-Leveragehomecountry-basedadvantages-Relativelyeasytoimplement-Lackoflocalresponsiveness-Mayresultinforeigncustomeralienation4StrategicChoiceforMultina4StrategicChoiceforMultinationals10–11StrategicChoiceADVANTAGESDISADVANTAGESLocalization-Maximizeslocalresponsiveness-Highcostsduetoduplicationofeffortsinmultiplecountries-Toomuchlocalautonomy4StrategicChoiceforMultina4StrategicChoiceforMultinationals10–12StrategicChoiceADVANTAGESDISADVANTAGESGlobalStandardization-Leveragelow-costadvantage-Lackoflocalresponsiveness-Toomuchcentralizedcontrol4StrategicChoiceforMultina4StrategicChoiceforMultinationals10–13StrategicChoiceADVANTAGESDISADVANTAGESTransnational-Costefficientwhilebeinglocallyresponsive-Engagesingloballearninganddiffusionofinnovations-Organizationallycomplex-Difficulttoimplement4StrategicChoiceforMultinaCopyright?2009Cengage.Allrightsreserved.10–14MultinationalStrategiesandStructures:

Four

OrganizationalStructuresFourorganizationalstructuresthatareappropriateforthefourstrategicchoices:InternationaldivisionGeographicalareaGlobalproductdivisionGlobalmatrixCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–15InternationalDivisionStructureatCardinalHealthFigure10.2Source:Basedonauthor’sinterviewand

(accessedAugust10,2004).CardinalHealthisheadquarteredinDublin,Ohio.AlsoseeIntegrativeCase3.1.Copyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–16MultinationalStrategiesandStructures:

OrganizationalStructures(cont’d)InternationalDivisionTypicallysetupwhenfirmsinitiallyexpandabroad,oftenwhenengaginginahomereplicationstrategyProblems:ForeignsubsidiarymanagersintheinternationaldivisionarenotgivensufficientvoicerelativetotheheadsofdomesticdivisionsThe“silo”effect:Internationaldivisionactivitiesarenotcoordinatedwiththerestofthefirm,whichfocusesondomesticactivitiesFirmsoftenphaseoutthisstructureaftertheirinitialoverseasexpansionCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–17GeographicAreaStructureatIspatFigure10.3Source:Adaptedfromwww.avon.AvonisheadquarteredinNewYork,AvonProductsisthecompanybehindnumerous“AvonLadies”.AvonCentral&EasternEuropeAvonWesternEuropeMiddleEastAfricaAvonAsiaPacificAvonLatinAmericaAvonNorthAmericaCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–18MultinationalStrategiesandStructures:

OrganizationalStructures(cont’d)GeographicAreaStructureOrganizestheMNEaccordingtodifferentgeographicareas(countriesandregions)IsthemostappropriateforamultidomesticstrategyItsabilitytofacilitatelocalresponsivenessisbothastrengthandaweaknessProblems:Whilebeinglocallyresponsivecanbeavirtue,itmayalsoencouragethefragmentationoftheMNEintohighlyautonomous,hard-to-control“fiefdoms”Copyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–19GlobalProductDivisionStructureat

EuropeanAeronauticDefenseandSpaceCompany

(EADS)Figure10.4Source:Adaptedfrom

(accessedJune30,2004).EADSisheadquarteredinMunich,GermanyandParis,France.Copyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–20MultinationalStrategiesandStructures:

OrganizationalStructuresGlobalProductDivisionStructureSupportsaglobalstrategyintreatingeachproductdivisionasastand-aloneentitywithfullworldwide—asopposedtodomestic—responsibilitiesforitsactivitiesFacilitatesattentiontopressuresforcostefficienciesinallowingforconsolidationonaworldwide(orregional)basisandreductionofinefficientduplicationinmultiplecountriesProblems:Itistheoppositeofthegeographicareastructure:LittlelocalresponsivenessCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–21AHypotheticalGlobalMatrixStructureFigure10.5Copyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–22MultinationalStrategiesandStructures:

OrganizationalStructuresGlobalMatrixIsoftenusedtoalleviatethedisadvantagesassociatedwithbothgeographicareaandglobalproductdivisionstructuresIsintendedtosupportthegoalsofthetransnationalstrategy—inpractice,itisoftendifficulttodeliverProblemsMayaddlayersofmanagement,slowdowndecisionspeed,andincreasecostswhilenotshowingsignificantperformanceimprovementCopyright?2009Cengage.AllAComprehensiveModelofMultinationalStructure,Learning,andInnovation10–23MULTINATIONALSTRATEGY,STRUCTURE&LEARNINGINDUSTRY-BASED-NatureofIndustry-Interfirmrivalryonintegration,responsivenessandlearning-Entrybarriers-Powerofsuppliersandbuyers-Threatofsubstitutes

RESOURCE-BASED-Value-Rarity-Imitability-Organization

INSTITUTION-BASED-Formal/informalexternalinstitutionsgoverningMNEsandhome/hostcountryenvironments-Formal/informalinstitutionsonMNEgovernance

AComprehensiveModelofMultiCopyright?2009Cengage.Allrightsreserved.10–24Industry-basedConsiderationsIndustrycharacteristicsIndustrialproductsfirms:FavorglobalproductdivisionsConsumergoodsfirms:FavorgeographicareasPorter’sforcesInterfirmrivalryincreasinglyfocusesoninnovationNeedtoheightenentrybarriers:Behindsomerecentmovestophaseoutmultidomesticstrategyandtoerectworld-scalefacilitiestodeterentrantsBargainingpowerofsuppliersandbuyers:TheyalsohavetointernationalizeifthefocalMNEgoesoverseasMNER&DoftengeneratescompetingsubstituteproductsCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–25Resource-basedConsiderationsValueDoesanynewstructure(suchasmatrix)reallyaddvalue?Doesinnovationreallyaddvalue?Notalways!RarityWhenallrivalsadopta“globalstrategy,”itisnotrareImitabilityItiseasiertoimitateformalstructure.Buthowtoimitateanelusive,informalmatrixwhichisa“philosophy”?OrganizationSomeMNEsarebetterabletotakeadvantageofcomplexorganizationalstructuressuchasmatrixthanothersCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–26ExternalInstitutionsFormalgovernmentrequirementstogeneratetechnologyspilloversInformalnormsgoverningrelationshipswithhomeandhostgovernmentsNumerousinformalrules(e.g.,thosegoverningthenationalityofsubsidiaryandtopmanagers)Formalrules,regulations,andpowerstructurescapturedbyorganizationalchartsInternal

InstitutionsInstitution-basedConsiderationsCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–27Institution-basedConsiderationsFormalandinformalexternalinstitutionsFormalInstitutionsExternally,MNEs,aresubjecttotheformalinstitutionalframeworkserectedbyvarioushome-andhost-countrygovernmentsHost-countrygovernmentsoftenencourage,orcoerceMNEsintoundertakingcertainactivitiesInformalInstitutionsStrategistsweightheinformalbacklashagainstactivitieswhichresultindomesticjoblossesCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–28Institution-basedConsiderationsFormalandinformalinternalinstitutionsFormalorganizationalchartsdonotnecessarilyrevealtheinformalrulesofthegameThreechoices:(1)ahome-countrynationalastheheadofasubsidiary,(2)ahost-countrynational,or(3)athirdcountrynationalCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–29WorldwideLearning,Innovation

andKnowledgeManagement:

KnowledgeManagementinMNEsKnowledgemanagementcanbedefinedasthestructures,processes,andsystemsthatactivelydevelop,leverage,andtransferknowledge.SomearguethatknowledgemanagementisthedefiningfeatureofMNEsKnowledgemanagementisconsideredbysomewritersthedefiningfeatureofMNEsExplicitknowledge(e.g.,adrivingmanual):CapturedbyITTacitknowledge(e.g.,knowledgeabouthowtodrive)Itsacquisitionandtransferrequirehands-onexperienceCopyright?2009Cengage.AllKMin4TypesofMNEsStrategyHomeReplicationLocalizationGlobalStandardiz-ationTrans-nationalInter-dependenceModerateLowModerateHighCopyright?2009Cengage.Allrightsreserved.10–30KMin4TypesofMNEsStrategyHKMin4TypesofMNEsStrategyHomeReplicationLocalizationGlobalStandard-izationTrans-nationalRoleofforeignsubsidiariesAdaptingandleveringparentcompanycompetenciesSensingandexploitinglocalopportunitiesImplementingparentcompanyinitiativesDifferentiatedcontributionsbysubsidiariestointegrateworldwideoperationsCopyright?2009Cengage.Allrightsreserved.10–31KMin4TypesofMNEsStrategyHKMin4TypesofMNEsStrategyHomeReplicationLocalizationGlobalStandard-izationTrans-nationalDevelopmentanddiffusionofknowledgeKnowledgedevelopedatthecentreandtransferredtosubsidiariesKnowledgedevelopedandretainedwithineachsubsidiaryKnowledgemostlydevelopedandretainedatthecentreandkeylocationsKnowledgedevelopedjointlyandsharedworldwideCopyright?2009Cengage.Allrightsreserved.10–32KMin4TypesofMNEsStrategyHKMin4TypesofMNEsStrategyHomeReplicationLocalizationGlobalStandard-izationTrans-nationalFlowofknowledgeExtensiveflowofknowledgeandpeoplefromHQtosubsidiariesLimitedflowofknowledgeandpeopleinbothdirections(toandfromthecentre)ExtensiveflowofknowledgeandpeoplefromcentreandkeylocationstosubsidiariesExtensiveflowofknowledgeandpeopleinmultipledirectionsCopyright?2009Cengage.Allrightsreserved.10–33KMin4TypesofMNEsStrategyHSieman’sShareNetHowcanSieman’stapintoandrejuvenatetheknowledgeof475,000employeesin190countries?Since1998Sieman’shasbeendevelopingaKMS(ShareNet)Copyright?2009Cengage.Allrightsreserved.10–34Sieman’sShareNetHowcanSiemaSieman’sShareNet4StepsofDevelopmentConceptdefinitionGlobalrolloutin39countriesin1999GeneratingmomentumSustainingperformanceCopyright?2009Cengage.Allrightsreserved.10–35Sieman’sShareNet4StepsofDeSieman’sShareNetConceptdefinitionHandlingexplicitandtacitknowledgeCapableofintegratinginteractivecomponentsGlobalrolloutin39countriesin1999ShareNetmanagersappointedtolocalsubsidiariesLocalWorkshopsCopyright?2009Cengage.Allrightsreserved.10–36Sieman’sShareNetConceptdefinSieman’sShareNetGeneratingmomentumInitialresistanceButeventualacceptanceEnglishbasedIncentivesSustainingperformance200219,000usersinmorethan80countriesSupportedby53ShareNetmanagersReducedto<10,post9/11Copyright?2009Cengage.Allrightsreserved.10–37Sieman’sShareNetGeneratingmoCopyright?2009Cengage.Allrightsreserved.10–38WorldwideLearning,Innovation

andKnowledgeManagement:

GlobalizingResearchandDevelopment

AcrucialarenaforknowledgemanagementDrivenbytheintensificationofcompetitionforinnovationProvidesavehicleforaccessto,orextractbenefitsfrom,aforeigncountry’slocaltalentsandexpertiseTheresource-basedview:Afundamentalsourceforcompetitiveadvantageisbeingdifferent(theassumptionofheterogeneity)DecentralizedR&Dworkperformedbydifferentlocationsandteamsaroundtheworldmeansthattherewillbepersistentheterogeneity(differences)inthesolutionsgeneratedCopyright?2009Cengage.AllProblemsinKMElementsofKMCommonProblemsAcquisitionFailuretoshareandintegrateexternalknowledgeRetentionEmployeeturnoverandknowledgeleakageOutflowHowdoesithelpme?SyndromeandknowledgeispowermentalityTransmissionInappropriatechannelsInflowNotinventedheresyndromeandabsorptivecapacityCopyright?2009Cengage.Allrightsreserved.10–39ProblemsinKMElementsofKMCoCopyright?2009Cengage.Allrightsreserved.10–40ProblemsandSolutionsin

KnowledgeManagementForlargefirms,thereareactuallydiminishingreturnsforR&D.Consequently,anewmodel,called“openinnovation,”isemerging.ThismodelreliesonmorecollaborativeresearchamongvariousinternalunitsandwithexternalorganizationsInknowledgeretention,thereistheproblemofemployeeturnoverwhichmayleadtoknowledgeleakageGlobalvirtualteams,whichdonotmeetfacetoface,mayhavecommunicationandrelationshipbarriersThe“notinventedhere”syndromecausessomemanagerstoresistacceptingideasfromotherunitsCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–41ProblemsandSolutionsin

KnowledgeManagementAssolutionstocombattheseproblems,corporateheadquarterscanmanipulatetheformalrulesofthegamethroughindividualandorganizationalincentivesaswellasinvestingintacitknowledgeMNEsoftenmustrelyonagreatdealofinformalintegratingmechanismsSometrytodevelopinformalsocialcapitalOverall,themicro,informalinterpersonalrelationshipsamongmanagersofvariousunitsmaycreateamicro-macrolinkCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–42DebatesandExtensionsCorporatecontrolsversussubsidiaryinitiativesArgumentsinfavorofcentralizationCapabilitytofacilitatecorporate-widecoordinationConsistencyindecision-makingSufficientpowerforcorporate-levelmanagerstoinitiatenecessaryactionsArgumentsagainstcentralizationandinfavorofdecentralizationDecentralizationreducescorporate-levelmanagers’overloadofresponsibilitiesandimprovesdecisionqualityBettermotivatessubsidiary-levelmanagersandemployeesPermitsgreaterspeed,flexibility,andinnovationSomesubsidiary-levelstrategiesmaycontributetoentrepreneurship(orempirebuilding)Theidealrelationshipisan“integratednetwork”modelor“N-form”Copyright?2009Cengage.AllHoneywellCanadaMid80satraditionalbranchplantproducingforthelocalmarketVolumes1/10thofMinneapolisLate80sNAFTAthreatenedsurvivalofHCInefficientplantUSmadeproductscouldenterCanadaduty-freePlantproposedtoproduceforsomeproductsforallNthAm.Copyright?2009Cengage.Allrightsreserved.10–43HoneywellCanadaMid80satradHoneywellCanadaProposaleventuallyadoptedHCbecameaCentreofExcellenceHCnowaleadingcontrolscompanyButcanselfinterestofthesubsidiary–power,prestige,theirjobsbetheover-ridingfactorHQroletodeterminewhetheropportunisticorgoodfaithCopyright?2009Cengage.Allrightsreserved.10–44HoneywellCanadaProposaleventCopyright?2009Cengage.Allrightsreserved.10–45DebatesandExtensionsCustomer-focuseddimensionsversusintegration,responsiveness,andlearningThreeprimarycustomer-focuseddimensionsGlobalaccountstructuretosupplycustomersacrossvariouscountriesAnindustrysectorstructureiscommonforprofessionalservicefirmsSolutions-basedstructureisoftenusedCustomer-focuseddimensionscutacrossallthreeexistingmainstreamdimensions,integratingonaglobalbasis,respondingtocustomersinsingleandmultiplemarkets,andlearninghowtomeetcustomers’needsandwantsOnerecommendationistosimplifybothproductandgeographicscopetoaddthecustomer-focuseddimensionsCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–46TheSavvyStrategistConsiderfourimplicationsFirst,understandthenatureandevolutionofyourindustryinordertocomeupwiththerightstrategy-structureconfigurationsSecond,managersneedtoactivelydeveloplearningandinnovationcapabilitiestoleveragemultinationalpresenceThird,masteringtheexternalrulesofthegamegoverningMNEsandhome/hostcountryenvironmentsbecomesamustFinally,managersneedtounderstandandbepreparedtochangetheinternalrulesofthegamegoverningMNEmanagementCopyright?2009Cengage.AllMovingHQsOverseas2004NokiamovedcorporatefinancefromHelsinkitoNY2006IBM’sGlobalProcurementmovedfromNYtoShenzhen1981TetraPakmovedfromSwedentoSwitzerlandEarly90sHSBCmovedfromHKtoLondon2004NewsCorpmovedfromMelbournetoNYCopyright?2009Cengage.Allrightsreserved.10–47MovingHQsOverseas2004NokiaMovingHQsOverseas2005China’sLenovosetupinN.CarolinaWhy?CentreofgravityofabusinessmaypulltheenterprisetowardsaparticularhostcountryCopyright?2009Cengage.Allrightsreserved.10–48MovingHQsOverseas2005China’MovingHQsOverseasStrategicRationalesAstatementofglobalisationSignificantefficiencygainsBenefitsfromvisiblecommitmentstolawsandregulationsofthehostcountry(atahigherlevel)Enhancesbargainingpowerwithgovernments(homev.newlocation)(Govtsmayoffertaxincentivestostay)Copyright?2009Cengage.Allrightsreserved.10–49MovingHQsOverseasStrategicR50GLOBALSTRATEGICMANAGEMENT10-MultinationalStrategies,Structures,andLearning1GLOBALSTRATEGICMANAGEMENT1Copyright?2009Cengage.Allrightsreserved.10–51OutlineMultinationalstrategiesandstructuresAcomprehensivemodelofmultinationalstrategy,structure,andlearningWorldwidelearning,innovation,andknowledgemanagementDebatesandextensionsThesavvystrategistCopyright?2009Cengage.AllToyotaas(Almost)No.1For30yearsToyotahasbeenwideningthegapbetweenitselfandrivalsAlmosttheNo.1byvolume2007–70thanniversaryoffoundingand50thsincestartingtoimportintotheUS2007only3000salesawayfromGMwhichhasheldtopspotsince1931Copyright?2009Cengage.Allrightsreserved.10–52Toyotaas(Almost)No.1For30Toyotaas(Almost)No.1MaybedeliberatelyholdingbacktoavoidpossibleprotectionismintheUSToavoidemployeesfrombecomingtooarrogantStartedwithandexportstrategyNowmanufacturesafullvehiclerangein21countries,includingChinaCopyright?2009Cengage.Allrightsreserved.10–53Toyotaas(Almost)No.1MaybeToyotaas(Almost)No.1InUSToyota:1970=2%ofsales(GM40%)1980=3%1990=8%2000=9%2006=13%(GM26%)2007=16%(GM24%)1995=26factories2007=63factoriesCopyright?2009Cengage.Allrightsreserved.10–54Toyotaas(Almost)No.1InUSToyotaas(Almost)No.1HowtokeepToyota,Toyota?2007qualityproblemsConsumerReportsmagazinedropsCamryV6sedan,LexusGS,TundrapickupfromrecommendedlistWouldnolongerrecommendToyotawithoutreliabilitydataNolongerassumptionofqualityorreliabilityCopyright?2009Cengage.Allrightsreserved.10–55Toyotaas(Almost)No.1HowtoToyotaas(Almost)No.1Toyotastepstoaddress‘growingpains’1.Documentedthe‘ToyotaWay’previouslyexplicit2.Increasedtraining3.Morelearningandknowledgetransferamongoverseassubsidiaries,especiallyfromCanadaandKentuckyCopyright?2009Cengage.Allrightsreserved.10–56Toyotaas(Almost)No.1ToyotaCopyright?2009Cengage.Allrightsreserved.10–57MultinationalStrategiesandStructuresPressuresforcostreductionsandlocalresponsivenessFourstrategicchoicesforMNEs(1)homereplication,(2)multidomestic,(3)global,and(4)transnationalHomereplicationstrategyemphasizestheinternationalreplicationofhomecountry-basedcompetenciesLocalization(multidomestic)strategyisanextensionofthehomereplicationstrategyGlobalstandardizationstrategyistheoppositeofthemultidomesticstrategyTransnationalstrategyaimstocapture“thebestofbothworlds”byendeavoringtobebothcostefficientandlocallyresponsiveCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–58MultinationalStrategiesandStructures:

TheIntegration–ResponsivenessFrameworkFigure10.1Copyright?2009Cengage.All4StrategicChoiceforMultinationals10–59StrategicChoiceADVANTAGESDISADVANTAGESHomereplication-Leveragehomecountry-basedadvantages-Relativelyeasytoimplement-Lackoflocalresponsiveness-Mayresultinforeigncustomeralienation4StrategicChoiceforMultina4StrategicChoiceforMultinationals10–60StrategicChoiceADVANTAGESDISADVANTAGESLocalization-Maximizeslocalresponsiveness-Highcostsduetoduplicationofeffortsinmultiplecountries-Toomuchlocalautonomy4StrategicChoiceforMultina4StrategicChoiceforMultinationals10–61StrategicChoiceADVANTAGESDISADVANTAGESGlobalStandardization-Leveragelow-costadvantage-Lackoflocalresponsiveness-Toomuchcentralizedcontrol4StrategicChoiceforMultina4StrategicChoiceforMultinationals10–62StrategicChoiceADVANTAGESDISADVANTAGESTransnational-Costefficientwhilebeinglocallyresponsive-Engagesingloballearninganddiffusionofinnovations-Organizationallycomplex-Difficulttoimplement4StrategicChoiceforMultinaCopyright?2009Cengage.Allrightsreserved.10–63MultinationalStrategiesandStructures:

Four

OrganizationalStructuresFourorganizationalstructuresthatareappropriateforthefourstrategicchoices:InternationaldivisionGeographicalareaGlobalproductdivisionGlobalmatrixCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–64InternationalDivisionStructureatCardinalHealthFigure10.2Source:Basedonauthor’sinterviewand

(accessedAugust10,2004).CardinalHealthisheadquarteredinDublin,Ohio.AlsoseeIntegrativeCase3.1.Copyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–65MultinationalStrategiesandStructures:

OrganizationalStructures(cont’d)InternationalDivisionTypicallysetupwhenfirmsinitiallyexpandabroad,oftenwhenengaginginahomereplicationstrategyProblems:ForeignsubsidiarymanagersintheinternationaldivisionarenotgivensufficientvoicerelativetotheheadsofdomesticdivisionsThe“silo”effect:Internationaldivisionactivitiesarenotcoordinatedwiththerestofthefirm,whichfocusesondomesticactivitiesFirmsoftenphaseoutthisstructureaftertheirinitialoverseasexpansionCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–66GeographicAreaStructureatIspatFigure10.3Source:Adaptedfromwww.avon.AvonisheadquarteredinNewYork,AvonProductsisthecompanybehindnumerous“AvonLadies”.AvonCentral&EasternEuropeAvonWesternEuropeMiddleEastAfricaAvonAsiaPacificAvonLatinAmericaAvonNorthAmericaCopyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–67MultinationalStrategiesandStructures:

OrganizationalStructures(cont’d)GeographicAreaStructureOrganizestheMNEaccordingtodifferentgeographicareas(countriesandregions)IsthemostappropriateforamultidomesticstrategyItsabilitytofacilitatelocalresponsivenessisbothastrengthandaweaknessProblems:Whilebeinglocallyresponsivecanbeavirtue,itmayalsoencouragethefragmentationoftheMNEintohighlyautonomous,hard-to-control“fiefdoms”Copyright?2009Cengage.AllCopyright?2009Cengage.Allrightsreserved.10–68GlobalProductDivisionStructureat

EuropeanAeronauticDefenseandSpaceCompany

(EADS)Figure10.4Source:Adaptedfrom

(accessedJune30,2004).EADSisheadquarteredinMunich,GermanyandParis,France.Copyright?2009Cengage.AllCopyright?2009Cengage.Al