Horizontal differentiation - formal division of the organization into sub-units. Integrating mechanisms - the mechanisms for coordinating sub-units.[r]
Trang 19e
By Charles W.L Hill
McGrawHill/Irwin Copyright © 2013 by The McGrawHill Companies, Inc. All rights reserved.
Trang 2The Organization of International Business
Trang 3What Is Organizational
Architecture?
Organizational architecture is the totality of a
firm’s organization including
To be the most profitable
the elements of the organizational architecture must
be internally consistent
the organizational architecture must fit the strategy
the strategy and architecture must be consistent with
each other, and consistent with competitive conditions
Trang 4Architecture?
Organizational Architecture
Trang 5What Are The Dimensions Of
Organizational Structure?
Organizational structure has three dimensions
1 Vertical differentiation - location of
decision-making responsibilities within a structure
1 Horizontal differentiation - formal division of the
organization into sub-units
2 Integrating mechanisms - the mechanisms for
coordinating sub-units
Trang 6Why Is Horizontal Differentiation Important?
Initially, most firms have no formal
structure, but as they grow, develop a
functional structure
Firms may switch to a product divisional
structure where each division is
responsible for a distinct product line
When firms expand internationally, they
often group all of their international
activities into an international division
Trang 7What Is A Functional Structure?
A Typical Functional Structure