If you misjudge the market [by globalizing], you are wrong in 15 countries rather than only in one.
-
No matter what the stage of internationalization, a firm's structural choices always involve two opposing forces: the need for differentiation (focusing on and specializing in specific markets) and the need for integration (coordinating those same markets). The way the firm is organized along the differentiation - integration continuum determines how well strategies - along a localization - globalization continuum - are implemented. This is why the structural imperatives of various strategies such as globalization must be understood to organize appropriate worldwide systems and connections.
As discussed earlier, global trends and competitive forces have put increasing pressure on multinational corporations to adopt a strategy of globalization - a specific strategy that treats the world as one market by using a standardized approach to products and markets. Recent examples of companies reorganizing to achieve globalization are the following:'1
IBM. Big Blue decided to move away from its traditional geographic struchire to a global structure based on its 14 worldwide industry groups, such as banking, retail, and insurance, shifting power from country managers to cen tralize industry expert teams. IBM hopes the restructuring will help the
company take advantage of global markets and break down internal barriers.
• Bristol-Meyers Squibb. The international drug company announced the formation of new worldwide units for consumer medicine businesses, such as Bufferin, and for its Clairol and hair-care products.
Organizing to facilitate a globalization strategy typically involves rationalization and the development of strategic alliances. To achieve rationalization, managers choose the manufacturing location for each product based on where the best combination of cost, quality and technology can be attained. It often involves producing different products or component parts in different countries; typically, it also means that the product design and marketing programs are essentially the same for all end markets around the world - to achieve optimal economies of scale. The downside of this strategy is a lack of differentiation and specialization for local markets.
Organizing for global product standardization necessitates dose coordination among the various countries involved. It also requires centralized global product responsibility (one manager at headquarters responsible for a specific product around the world), an especially difficult task for multiproduct companies. Henzler and Rall suggest that structural solutions to this problem can be found if companies rethink the roles of their headquarters and their national subsidiaries Managers should center the overall control of the business at headquarters, while treating national subsidiaries as partners in managing the business - perhaps as holding companies responsible for the administration and coordination of cross-divisional activities.12
A problem many companies face in the future is that their structurally sophisticated global networks, built to secure cost advantages, leave them exposed to the risk of environmental volatility from all corners of the world. Such companies need to restructure their global operations to reduce the environmental risk that results from multicountry sourcing and supply networks)3 In other words, the more links in the chain, the more chances for things to go wrong.
ORGANIZING FOR GLOBALIZATION : Organizing Structure article from Formulating Implement Catagory ORGANIZING FOR GLOBALIZATION
ORGANIZING FOR GLOBALIZATION Organizing Structure article from Organizing Structure Formulating Implement.Free learning from data about ORGANIZING FOR GLOBALIZATION Organizing Structure Formulating Implement Business Management,online business management,business management classes,online business management degrees