Chapter 12 The Location And Organization of the Competitive Intelligence Function in a Multinational Corporation By: Michelle Murray

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Chapter 12 The Location And Organization of the
Competitive Intelligence Function in a
Multinational CorporationBy Michelle Murray

• Presented By Shane Banks, Holly Winters, Salina
  Hardin Volker Klinkhammer

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Introduction

• The global marketplace has become highly
  integrated with many multinational enterprises.
• Several companies derive approximately 40 of
  their gross sales from foreign operations
• Eli Lilly
• Avon
• Kelloggs
• Sun Microsystems

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Chapter Objectives

• Requirements of organizational structure for CI
  function success
• Explore the need for formalization of the CI
  function
• Define the multinational corporate structures
  within a company

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Chapter Goals

• Understand the advantages and disadvantages of
  different locations of elements of the
  competitive intelligence function within the
  corporate organization
• Be able to use the information from this chapter
  to effectively locate the competitive
  intelligence function to best suit a firms
  corporate organization and resources

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Organizational Requirements

• 70-90 of intelligence requests by senior
  management may be answered by asking firms
  employees
• Information gathering is an important activity of
  the CI function and includes 5 phases
• Needs assessment
• Planning and direction
• Information storage and processing
• Analysis and production
• Dissemination

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Formalization of the CI Function

• CI functions usually mirror corporate structure
• - centralized
• - decentralized
• - hub-and-spoke
• Formalized as a seperate department or integrated
  informally

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Corporate Structure Models

• Multidomestic (Geographical)
• Global Corporation (Product, Function)
• Hybrid Organization
• Most MNEs are Hybrids
• Centralized core operations
• Decentralized strategic issues

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CI Function Shadowing of Corporate Structure

• Global Companies Prefer Global Suppliers who
• Understand global factors
• Have a consistent output
• Provide a single point of contact
• Have an ability to gain service in regions where
  there is no regional supplier representative

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MNE Shadow CI Organizations

• Should match the formal corporate structure
• Table 12.2- Organization options and key
  implementation considerations
• CI knowledge must bridge hierarchical,
  functional, diagonal, and distance barriers to
  reach appropriate decision makers
• Technological innovations have helped with
  horizontal

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Division of CI Function

• Different types of MNE require different
  divisions
• All types may have a diffuse or informal CI
  process because of
• -underestimating importance
• -belief that CI is best done within job
  functions
• -resource limitations
• Knowledge cell limited success- only long-term
  usage is beneficial

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Illustration of the concept of shadowing
corporate structure

• Procter and Gamble (PG)
• Prior to 1999
• Structure Multi-Domestic-Geographical
• CI process Decentralized Regional CI
• After Restructuring
• Structure Global-Product
• CI process Hybrid Hub-and-Spoke Network

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Benefits of High-Class CI

• Study by the University of North Texas
• Companies that place a high emphasis on CI
  earned better profits than companies that did not
  emphasize CI.
• Companies with advanced formal CI had a higher
  return on assets.
• High-Caliber CI results in improved performance.

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Conclusion

• A formal structured CI function yields optimal
  results.
• There is no single preferred structure of CI.
• CI organization should shadow the corporate
  structure.
• There are measurable benefits from investing in a
  formal and structured CI function.