Designing Effective International Organizations

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“People will have to think Globally and predicate Leadership behavior not on power and authority but on Relationships and cooperation”
“The Global Organization must have Virtual System of Boundary-Spanning Relationships, thus creating “Soft-Side” Culture of interdependence and Innovation”

There is a fact that rarely can a firm extend its domestic structure into a global environment.
Also there is no ideal model that defines the optimal multinational organization.
Nevertheless, companies try to establish stable systems for management.
Our focus here will be on:
Patterns of decision-making authority
Processes of managing global resources

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“People must learn to think differently”
Structure change and Incremental Growth
FIGURE 7.2 Structure for Expanding Business

(b) Expansion and Integration
Domestic organization with an export dep.
The export function is a responsibility distinct from domestic marketing. As a company establishes foreign markets, it must develop the ability to facilitate the necessary transactions. This process often requires new abilities to respond to unfamiliar customers. These activities extend beyond adjunct marketing responsibilities, and firms usually acknowledge the separate needs by staffing export offices with people skilled in international business. Many companies retain this structure for long periods of time, merely expanding office staff as required. As it shown in figure 7.3:-
FIGURE 7.3 Functional Structure with Export Department
Occasionally, companies with product structure position their export offices directly under CEOs to ensure coordination of sale foe several different product line. This option is shown in figure 7.4.
FIGURE 7.4 Product-Oriented Division Structure with Export Department
Subsidiaries under an export dep.
When a company’s export activities become complicated to require overseas facilities, its structure evolves further to include foreign subsidiaries. This move constitutes a major change for most companies. Figure 7.5 shows an abbreviated model of a company with several
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