S'9 NOV' 05

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S.9NOV. 05
CHAPTER 8 ORGANIZATIONAL STRUCTURE AND CONTROL
SYSTEMS
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Evolution and Change in MNC

• Internationalization is the process by which a
  firm gradually changes in response to
• international competition
• domestic market saturation
• the desire for expansion, new markets, and
  diversification

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Evolution and Change in MNC

• Structural Evolution (Stages Model) occurs when
• managers redesign the organizational structure
  to optimize the strategys changes to work
• This causes changes in the
• firms tasks, relationships and designating
  authority
• lines of communication
• geographic dispersal of units

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Organizing for Globalization

• Two opposing forces in structural decisions
• differentiation (focusing on and specializing in
  specific markets)
• integration (coordinating the markets)
• Globalization a specific strategy that treats
  the world as one market by using a standardized
  approach to products and markets

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Direct Coordinating Mechanisms

• Design of appropriate structures
• Use of effective staffing practices
• Visits by head-office personnel
• Regular meetings

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Matching Organizational Structure to
International Advantage

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Geographical Structure for Apple Computer
CEO Steve Jobs
Source www.apple.com
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Matrix Structure forWorldwide Steel Company
Vertical Functions
Horizontal Product Lines
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Hybrid StructureSun Petrochemical Products
President
Technology Vice President
Financial Services Vice Pres.
Human Resources Director
Chief Counsel
Chemicals Vice President
Lubricants Vice President
Fuels Vice President
NOTE Sunoco is an American petroleum and
petrochemical manufacturer headquartered in
Philadelphia, Pennsylvania, formerly known as Sun
Company Inc.. In Canada, Sunoco products are sold
by Suncor Energy and not related to this company.
Sources Based on Linda S. Ackerman, Transition
Management An In-Depth Look at Managing
Complex Change, Organizational Dynamics (Summer
1982) 46-66 and Frank Ostroff, The Horizontal
Organization, (New York Oxford University
Press, 1999), Fig. 2.1, 34.
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Hybrid Structure Ford Customer Service Division
Vice President and General Manager
Functional Structure
Human Resources
Strategy and Communication
Finance
Director and Process Owner
Teams
Teams
Parts Supply / Logistics Group
Director and Process Owner
Horizontal Structure
Teams
Teams
Vehicle Service Group
Director and Process Owner
Teams
Technical Support Group
Sources Based on Linda S. Ackerman, Transition
Management An In-Depth Look at Managing Complex
Change, Organizational Dynamics (Summer 1982)
46-66 and Frank Ostroff, The Horizontal
Organization, (New York Oxford University
Press, 1999), Fig. 2.1, 34.
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