4 - Developing a Transnational Organization

Question 1

What are the main challenges associated with the global matrix structure?

Answer 1

1. Informational logjams
2. Problem resolution occurs through escalation
3. Overlapping responsibilities
4. Terf battles and a loss of accountability

Question 2

Why did many businesses abandon their formal matrix structures during the 1980s?

Answer 2

1. Matrix created complex and bureaucratic processes and relationships
2. The dual reporting requirement caused confusion and informational logjams
   Results in very slow decision making

Question 3

What is administrative heritage?

Answer 3

The organizational history, values, norms, and embedded management culture

Question 4

What is needed in addition to formal structure for organizational design?

Answer 4

1. Administrative systems
2. Communication channels
3. Interpersonal relationships
4. Deep understanding of the organization’s administrative heritage

Question 5

What are the 3 archetypes of business?

Answer 5

1. The European multinational model
2. The American international model
3. The Japanese global model

Question 6

What is decentralized federation?

Answer 6

Corporate management treats subsidiaries as independent national businesses (multinational).
High in national responsiveness, loose controls, decentralized assets and resources
Knowledge and innovation developed and retained within each unit
Strategy based on understanding and responding to national markets

Question 7

What is coordinated federation?

Answer 7

Corporate management treats subsidiaries as foreign extensions of domestic operation (international)
High in knowledge transfer, tight control, expertise locally adapted
Foreign units dependent on parent for new products and processes but can make adjustments
Assets and resources decentralized but controlled from center

Question 8

What is centralized hub?

Answer 8

Corporate management treats subsidiaries as delivery pipelines to the global market (global)
High in global efficiency, right controls, centralized decision making.
Strategy based on capturing scale economies. Key assets and resources are centralized
Knowledge and innovation are developed and retained at the centre

Question 9

What is integrated network?

Answer 9

1. Transnational strategic approach
2. Simultaneously achieves responsiveness, efficiency, and learning
3. Assets are dispersed, interdependent, and specialized
4. Role of overseas units is differentiated contributions to the integrated worldwide operations
5. Knowledge is developed jointly and shared worldwide

Question 10

What are the 3 key characteristics of the transnational organization?

Answer 10

1. Builds and legitimizes multiple internal perspectives
2. Dispersed and interdependent assets and capabilities
3. Robust and flexible integrative process

Question 11

What are the attributes of a transnational organization as they relate to the human body?

Answer 11

1. Structure is like anatomy: distribution of assets and responsibilities
2. Processes are like physiology: defining information flows and relationships
3. Culture is like psychology: adjusting attitudes, mentality, and beliefs

Question 12

What is the classic change process driven by structural reconfiguration?

Answer 12

A change in structure leads to reshaping organizational processes and relationships which then redefine individual attitudes and mentalities

Question 13

What is the transnational change process initiated by changes in attitudes and mentalities?

Answer 13

Change in attitudes drives a change in interpersonal relationships and processes which then leads to change in formal structure and responsibillities

Question 14

What is the difference between strong AI and weak AI?

Answer 14

Strong AI are machines that think and act in a way that matches or surpasses human intelligence

Weak AI is a computer system that can perform tasks traditionally handled by people

Question 15

What are the 4 components of the “AI factory”?

Answer 15

1. The data pipeline
2. Algorithms which generate predictions about the future
3. An experimentation platform
4. Infrastructure: the systems that embed this process in software and connect it to users

Question 16

How does AI impact scale?

Answer 16

Traditional operating models have scale taper off as we reach decreasing marginal returns

With the digital operating model, we have continually increasing returns over time

Question 17

How does AI impact scope?

Answer 17

Allows for greater scope because digitized businesses can more easily be connected with each other

Question 18

How does AI impact learning?

Answer 18

Provides an ability to produce more accurate and sophisticated predictions as well as to gain a fundamental understanding of the data