Organizational/operational influence Flashcards
Explain the difference between a traditional and a network view of an organization
Traditional view: Clear seperation between org. and environment. Org is internally homogenous.
Environment is exogenous
Network view: Management of a network of subsidiaries, company (especially subsidiaries) are enmeshed in the environment, it depends on the environment
What is the difference between a centralized and decentralized subsidiary network?
Centralized means that decision-making is concentrated at the top of the organizational hierarchy. decentralized indicates that subsidiares are able to execute control and power is distributed in the organization
What is the current development of subsidiary roles in regards to centralization/decentralization
1990s-2010s: decentralized, new ideas globally, units close to the customer, emerging markets = specific needs, greater distance from center (less constrined by norms and culture)
2016-2020s: tendency to go back to centralized. For instance due to reason rise in political headwins
Hierarchy/Low Autonomy
Critical resources are at the top
HQ: control, monitoring, strategic decision
Divisions: operational decisions
Control is bureaucratic -> rules; result in slow
Low transaction cost -> less lateral (sideways in hierarchy) communication (only downwards)
Heterarchy/high autonomy
- top management do not know shit
- dispersed resources throughout the org
- control through norms
- higher transaction cost as a result of lateral communication
explain what autonomy of subunits entails
The degree to which the foreign subsidiary of the MNE has strategic and operational decision-making authority
What is a business group
a set of legally separated firms operating in multiple strategically-unrelated activities that are under common ownership and control, but who are tied together with cross-ownership. Often family- or stateowned
what are 3 reasons that business groups exist?
- Weak “factor markets”: lack of resources. 2. Weak institutions (institutional voids) (so you find friends instead. 3. create internal markets and governance possibilities
What are the 5 kinds of firm networks
Supplier networks, distribution network, strategic network (alliance), geographical (silicon V), diversified networks (e.g. banks, family or state owned)
what is a challenge/disadvantages of business groups?
Potential agency costs, satisfy the demand of other affiliates rather than foreign demand, too complex or poorly managed, some advantages like political ties can’t be relocated
What are opportunities of business groups?
Financial resources are transferred (helps the underperforming), lower costs of search and negotiation in trade, Recruitment, training, and job transfers are managed internally, follow each other when internationalizing
Modular value chains
products by supplier made to customer’s specification.
explain the smile curve
The smile curve highlights the asymmetry of value creation in certain industries, with high value generation concentrated in the R&D and marketing phases, while manufacturing and after-sales support contribute relatively less to the overall value.
Relational value chains
complex interactions between buyers and suppliers (mutual dependency and asset specificity). Managed through trust and reputation
Captive value chains
small suppliers are transactionally dependent on the much larger buyers. Suppliers face significant switching costs and therefor ‘captive’. Characterized by high degree of monitoring and control by lead firm
