1.2 Corporate Strategy: International Perspective Flashcards

Question

Organizational structure - Vertical differentiation

Answer 1

Hierarchy + decision making Centralization and decentralization of decision making responsibilities

Answer 2

All activities come together in a company such as planning, strategies or decision-making in the hands of one group Facilitates coordination and integration of operations Helps ensure that decision are consistent with organizational objectives Gives top level mangers the means to bring change Avoids the duplication of activities that occurs when similar actives are carried on by various subunits

Answer 3

Control of an activity is given to several local authorities rather than one Gives top management time to focus on critical issues by delegating more to lower managers Motivational research favors decentralization permits greater flexibility Can result in “better” decisions Can increase control

Answer 4

Division of the firm into subunits Domestic firms functional structure = functional reflect the firm’s value creation activities (production, marketing) Product divisional structure = each division is responsible for a distinct production line International firms Geographically organized but can be done in a few different ways: Dual structure: domestic and international subunits, create conflict of coordination problems Domestic structure based on functions Domestic structure based on product divisions: helps overcome coordination problems Global matrix structure based on product division and geographic area: complicated and bureaucratic, good for transnational strategy

Answer 5

Used to achieve coordination between subunits Focused on ensuring that the actions of each subunits are consistent with the company’s overall objectives through formal communication: meetings, letters, reports, presentations Informal communication: oral or written casual chats [ Depending on strategy different levels of communication are needed, not needed for localization

Answer 6

Personal controls Bureaucratic controls Cultural controls Output controls

Answer 7

Control via personal contact with subordinates Used in small firms Helps structure the relationship between managers at different levels in multinational enterprises

Answer 8

Rules and procedures are the way that actions are directed in subunits Budget and capital spending rules are the most important in this control

Answer 9

Employees adapt to norms and value systems of a firm and control their own behavior If culture controls are strong then other controls are not needed

Answer 10

Relatively objective performance metrics used such as profitability, productivity, growth, market share, and quality Managers are judged by their ability to achieve these goals Goals are made by negotiating with subunits and headquarters

Answer 11

Devices used to reward appropriate employee behavior Often seen with output controls as they used those performance metrics Need cooperation between managers in different subunits with adjustments for different cultures

Answer 12

Look at how decisions are made and how work is performed through: formulating strategy Allocating resources Evaluating new product ideas Handling customer inquiries and complaints Improving product quality Evaluating employee performance Efficient and effective processes can lower the costs of value creation and add additional value to a product Many process cut across organizational boundaries, across subunits or nations

Answer 13

Creating and maintaining organizational culture, founders and leaders have profound impact on culture Maintained by hiring and promotional practices of the organization, reward strategies, socialization, communication In a strong culture all managers share a consistent set of values and norms that have clear impact on work performance Values are widely shared, members know what is import, employees fell pride in culture Strong culture does not always mean good!

Answer 14

Vertical differentiation - decentralized Horizontal differentiation - worldwide area structure Need for coordination - low Integrating mechanisms - none Performance ambiguity - low Need for cultural controls - low

Answer 15

Vertical differentiation - core competency, more centralized, rest decentralized Horizontal differentiation - worldwide product divisions Need for coordination - moderate Integrating mechanisms - few Performance ambiguity - moderate Need for cultural controls - moderate

Answer 16

Vertical differentiation - some centralization Horizontal differentiation - worldwide product divisions Need for coordination - high Integrating mechanisms - many Performance ambiguity - high Need for cultural controls - high

Answer 17

Vertical differentiation - mixed, centralization and decentralization Horizontal differentiation - informal matrix Need for coordination - very high Integrating mechanisms - very many Performance ambiguity - very high Need for cultural controls - very high