Innovative Electronics—an Integrative Case Study

2891 Words Nov 21st, 2010 12 Pages
1. Introduction:

With social and economic development, the importance of the organizational context is increasingly recognized by people. The context of an organization is represented in or shaped by the structure of the organization (Glushko, 2008). Organizational structure is used to describe the order of various parts of organization, contact information and the interrelationships between the various elements (Robbins, 1990). Simply speaking, organizational context and structure show how the organization is organized. This essay will analyze a case which concerns the organizational context and structure of Innovative Electronics, and give recommendations to change their current situation.

Firstly, this essay will describe some
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3. Problems and Causes

4.1 External problems and causes

The external problems refer to the strategy of the parent company which includes the requirement for consistent corporate culture and organizational structure, and the limitation of funds and resource allocation.

For the U.S. parent company, maintaining consistency is beneficial to group management and corporate image (Boddy, 2005). Because of this strategy, Innovative Electronics has to follow the corporation 's requirements for designing products which are always unsuitable to the mainly European markets. This strategy meant that the subsidiary lost the direction of production and development. Under the guidance of the consistency strategy, the parent company constrains the support of funds and urges them to strengthen cost control and develop centralized research; this also to some extent hampers the research of Localization. Innovative Electronics can not follow the requirements of the local market and the company 's own ideas so that they have lost the basic conditions for market share. They do not have new products for the market, for consumers, and this means Innovative Electronics are not continuously attractive. Coupled with the emergence of new competitors, the subsidiary losing their competitiveness is then inevitable.

Both the requirements for consistency and lacking of funds and resources support from the parent company are

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