Organisation and Governance Flashcards
What is the difference between horizontal and vertical growth in a company?
vertical growth - getting closer and further away from customer (making cookbook vs farms)
horizontal growth - widening ur portfolio offerings
What is the definition of an organisational structure?
It is the formal arrangement of roles, responsibilities, relationships in the MNE. The vertical differentiation of an organisation is the balance between centralisation and decentralisation of authority. The horizontal growth involves specifying which ppl do which jobs in which unit, and the differences in decision-making responsibilities between diff levels
What is the main difference between centralisation and decentralisation of organisational structures?
centralisation = degree to which high level managers make strategic decisions and delegate them to lower levels for implementation
decentralisation = degree to which lower level managers make and implement strategic decisions
What are the three kinds of knowledge that are integrated into organisational strategy?
functional knowledge - access to coworkers w expertise in basic business functions ie production, marketing, finance, accounting, HR management, IT
product knowledge - understanding technological trends, customer needs, and competitive forces affecting the goods the firm produces and sells
geographical knowledge (area) - understanding cultural, commercial, social, economic conditions in each host country
What do the different forms of knowledge allow organisational structures to do?
each form allows firms to integrate one type of knowledge, but also makes it difficult to integrate the other types of knowledge
What are the 9 different kind of organisational structures?
functional
divisional
international
product division
geographic area division
matrix
mixed (function, area, product)
network
virtual
Describe the functional structure of an organisation and the international strategy employed
- groups ppl based on common expertise and resources
- popular among companies w narrow product lines
- emphasis on upstream inputs - upstream value chain/raw materials
types of strategies:
- standardisation/cost leadership
- international/global strategies
happens when young or has been domestic most of their life. The internationalisation is so complex u get intl division that handles everything in that portfolio independently from other structures of ur company
EX: CEO –> Production, Marketing –> Prod NA, Prod Europe, Mark NA, Mark Eu
Describe the divisional structure of an organisation and the international strategy employed
●divide employees based on product, customer segment, geographical location
●duplicates functions and resources across divisions
Describe the product division structure of an organisation and the international strategy employed
- emphasis on downstream outputs… products/services
- differentiation
- internal/global strategies
Describe the international division structure of an organisation and the international strategy employed
●intl strategies, large dom markets w relatively small intl volume –> they are a department apart
●can be constructed to emphasise diff areas
Describe the geographic area division structure of an organisation and the international strategy employed
●emphasis on customers and local conditions
●differentiation
●multidomestic / localisation strategies
Describe the matrix structure of an organisation and the international strategy employed
institutes overlap among functional and divisional forms to give functional, product, geographic groups a common focus
However, it violates the unity of command principle
- dual reporting relationship rather than single line of command
- potential to create confusion and/or lack of clear accountability
- we shouldnt create ambiguity regardin who u report to and whos responsibility is what
Consistent w or can support:
- emphasis on both inputs/outputs dependin on which elements are crossed in the matrix
- differentiation and integrated differentiation/cost leadership
- transnational and multidomestic/localisation strategies
What can be found at the frontline of a network structure, and what role do the channels of exchange and the formal centre have?
differentiated units to which HQ delegates decision-making authority are all the front line of work.
The channels of exchange facilitate fine line the volume of content and the data, and the linkages animate the network.
the formal centre of the networks sures the efficient flow and resources, controls strategic objectives and operational policies across the differentiated units
What is virtual organisation structure of an organisation?
●temporary arrangement among independent companies, suppliers, customers and rivals
●works across space, time and organisational boundaries
●links strengthened by webs of communication technology
How can corporate governance be defined
It is a set of mechanisms used to manage relationships among stakeholders and to determine and control the strategic direciton and performance of organisations. It is concerned w identifying ways to ensure that strategic decisions are made more effecitvely and how these can establish harmony between owners and top-level managers.
