Lecture 6The Impact of Globalization on TheOrganization of Activities
Lecture 6 The Impact of Globalization on The Organization of Activities
CommonInternational OrganizationStructuresI.International Division StructureExhibit 9-1 The International Division StructureCEOVPInternationalVPProductCVP Product BVP Product ADomesticDomesticDomesticDomesticMarketMarketMarketMarket
Exhibit 9-1 The International Division Structure CEO VP International VP Product C VP Product B VP Product A Domestic Market Domestic Market Domestic Market Domestic Market Common International Organization Structures Ⅰ. International Division Structure
InternationalDivision StructureUnder an international division structure,all functionalactivities---with the possible exception of sales---aremaintained at home.Oneclearadvantage:Acompanycangiveinternational sales much greater support and attentionDefault:As a result,the manager of the internationaldivision has to understand the product-marketstrategies of eachproduct division andadaptthemtointernational markets
◆Under an international division structure, all functional activities-with the possible exception of sales-are maintained at home. ◆One clear advantage: A company can give international sales much greater support and attention. ◆Default: As a result, the manager of the international division has to understand the product-market strategies of each product division and adapt them to international markets. International Division Structure
CommonInternational OrganizationStructuresExhibit 9-2 The Area Division StructureⅡ.Area Division StructureVpInternationalGeneral ManagerGeneral ManagerGeneral Manager(Far East)(Europe)(Far East)Country ManagerCountry ManagerCountry Manager(France)(Italy,etc)(Germany)
Exhibit 9-2 The Area Division Structure VP International General Manager (Far East) General Manager (Europe) General Manager (Far East) Country Manager (Germany) Country Manager (Italy, etc) Country Manager (France) Ⅱ. Area Division Structure Common International Organization Structures
Area Division StructureArea Division Structurecaptures the majority ofefficiency advantages resulting from globalizationIt is more efficient and effectivethan global structuresbecause of increased responsiveness,reducedbureaucracy,communicationefficiencies,andimprovedemployeemorale.In many cases,area stuctures can also facilitate fasterdelivery,allow greater customization,and allow thecompany to maintain smaller inventories than wouldbenecessary undermore complex organizationforms
◆Area Division Structure captures the majority of efficiency advantages resulting from globalization. ◆It is more efficient and effective than global structures because of increased responsiveness, reduced bureaucracy, communication efficiencies, and improved employee morale. ◆In many cases, area stuctures can also facilitate faster delivery, allow greater customization, and allow the company to maintain smaller inventories than would be necessary under more complex organization forms. Area Division Structure