C.4 Developing a Transnational Organization

Question 1

Disadvantages of global matrix

Answer 1

• Complex bureaucratic processes and relationships
• Dual reports caused confusion
• Overlapping responsibilities, turf battles, and loss of accountability
• Very slow decision making

Question 2

Why is there an increasing need to restructure organizations for the emerging markets?

Answer 2

• Now there are changing populations with massive talent in these emerging markets with added education
• Different tastes, education, expectations, income

Question 3

What is a T-Shaped organization

Answer 3

• Localize front-end activities, customer facing processes should be autonomous, alter the incentives and career opportunities offered to employees
• Back end: Use emerging markets as platforms for globally segmented innovation and manufacturing
• Back end: Break up R&D, relocate across several countries and integrate them globally
• Back end: Each country unit should have its own area of expertise

Question 4

Why is the R&D structure in a T-Shaped org effective

Answer 4

• It splits up R&D among different subsidiaries not only to take advantage of different talents, but because in some countries it can be dangerous to perform R&D from weak protection of intellectual property. Because of this, if you split up the R&D, it means that if you have a leak in one place, it isn’t as bad because they don’t have the full scope of the R&D

Question 5

Disadvantages of traditional head office - subsidiary relationships

Answer 5

• Symmetrical treatment of subsidiaries
• Underutilization of worldwide assets and capabilities
• Demotivation of subsidiary managers

Question 6

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Answer 6

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