Organization theory and design: Lecture 43

Organization theory and design: Lecture 43 provides students with content about: structural design for global operations; model for global vs. local opportunities; model to fit structure to international advantages; transnational model;... Please refer to the lesson for details!

Structural Design for Global

Operations

43

Model for Global vs Local

Opportunities

• The dilemma facing the international

organizations is when to use a

globalization rather than a multi domestic strategy

• GLOBALIZATION strategy means that

product design and advertising strategy are standardized throughout the world

– example of Japanese companies as

compared to US and Canada

Model for Global vs Local

Opportunities

• A MULTI DOMESTIC strategy means that competition in each country is handled

independently of competition in other

countries It would encourage product

design, assembly and marketing tailored

to the specific needs of each country

– French don’t drink orange juice in breakfast and laundry detergent is used to wash dishes

Model to Fit Structure to International Advantages

Hi Globalization Glob+MD

global product str Glob matrix

Low Export strg MD strg

Intl Div Glob geo stru

FORCES FOR NATIONAL RESPONSIVENESS

Transnational Model

• This model of organization structure goes beyond the global matrix

structure to apply the concept of the learning organization to a huge,

international corporation

• It is the most recent thinking about the kind of structure needed by

complex organizations

• This model cannot be given a precise definition but the following elements

distinguish it from and move it beyond a matrix structure:

1 TN model differentiates into many centers of different kinds: “flexible

centralization” and not one HQ like matrix

2 Subsidiary managers initiates strategy and innovations that become

strategy for the corporation as a whole (bottom-up approach in strategy making)

3 Unification and coordination are achieved through corporate culture,

shared vision and values, and management style rather than through the vertical hierarchy

4 Alliances are established with other company parts and with other

companies

Trend Towards Empowerment

• EMPOWERMENT is the notion of giving

employees the power, freedom, and

information to make decisions and

participate fully in the organization

Trend Towards Empowerment

WHY FIRMS ADOPT EMPOWERMENT?

1 As a strategy to improve products or

services

2 Because other firms in their industry are

doing the same

3 To create a unique Learning organization

with superior performance capabilities

Trend Towards Empowerment

• Power in organizations is not a zero sum

game

• Empowerment increases the total power

in an organization

Elements of Empowerment

• Empowering employees means giving them

four elements that enable them to act more freely and accomplish their jobs.

1 Employees receive INFORMATION about

company performance

2 Employees have KNOWLEDGE and skills to

contribute to company goals

3 Employees have the POWER to make

important decisions

4 Employees are REWARDED based on

company performance