unit 9 - extra 1 Flashcards
multinational company
a company that operates in more than one country, with the headquarters in the home country and other operations in another country
why might a business want to expand to another country
- access to new customers
- lower costs of production
- avoid import restrictions
host country definition (multinational companies)
the country that a business is moving into (multinational companies)
positive impacts of a multi national business moving into another host country
- creates more job opportunities in the host country
- training opportunities for the local employees
- business may buy their inputs locally
- increased consumer choice
- enhanced competition for local business (incentive to improve)
possible negative impacts of a multinational company moving into a new host country
- Potential bankruptcy of local businesses who can’t compete
- Depletion of non-renewable resources in the host country
- Potential of negative impact on environment
- Erosion of local culture
“McDonaldization”
what factors can determine whether the impact of a business on a new host country will be positive or negative
- whether corporation tax is paid in the country
- whether they hire local employees or bring employees from the HQ
- labour conditions they use
- can local business survive and thrive
levels of hierarchy definition
the numbers of levels within an organization with employees at the same level having the same authority and responsibilities
what are the types of organisational structure
flat (horizontal) and tall (vertical )
what is a span of control
(how are they different for tall/flat organisational structure?)
the number of employees that a manager directly oversees
tall: low span of control
flat: short chain of command
what is chain of command
(how are they different for tall and flat organisational structure?)
the route that information and responsibility moves up and down the structure
tall - long chain of command
flat - short chain of command
pros of tall/vertical organisational structure
- Each team is smaller so easier to control
- Better team morale as smaller teams
- More opportunities for promotion
pros of flat/horizontal organisational structure
- Less managers required so less cost
- Quicker communication and decision making
- More delegation and responsibility
- High trust environment
Empowered - closer to the top
delegation definition
giving authority and responsibility of a task to another employee, usually to a lower level of hierarchy
bureaucracy definition
- An administrative system which defines how things are run in the organisation
a. Paperwork
b.Rules and employee handbooks
what are the different ways an organisation chart can be drawn?
- by function
- by product
- by region
what are pros/cons of drawing an organisation chart by function
pro:
- employees can specialise in one function
con:
- managers might only consider their function in decision making
what is an organisation chart by product
when the departments and hierarchy is defined by each product (each has its own R&D, marketing etc.)
pro/con of organisation chart by product
pro:
department can specialise on one product
con:
possible lack of coordination with each department (different departments may research the same thing)
organisation chart - by region (what does this look like)
jobs are divided into a hierarchy geographically by country, region or continent
pro/con of organisation chart - by region
pro:
easier communication (similar culture, local knowledge)
con:
possible job duplication, lack of consistency across areas
delayering within a business definition
taking away a level of hierarchy in the organisational structure, making the organisation flatter
pro/con of delayering within a business
pro:
- reduces costs
- quicker communication
- more power to lower levels
con:
- fewer opportunities for promotion
- employees have more work
- higher span of control for CEO
- redundancy costs
what does it mean when a business is centralised?
when a business’ key decisions are made in headquarters, or at the centre of the business
eg.
- determining work hours
- marketing campaigns
pros/cons of a business being centralised
pros:
- quick and easier decision making
- more control and standardisation of the brand
cons:
- employee demotivation
- pressure of decision making at head office
- lack of flexibility
what does it mean when a business decentralises
- when a business’ key decisions are passed down to the middle and junior-level managers within the business or other countries
pros/cons of decentralisation of a business
pros:
- decisions more tailored to the local culture
- empower other parts of the business
- improved morale and teamwork
cons:
- lack of consistency across the business
- decisions may not be made with the whole business in mind
what is a matrix organisational structure?
project based structure that creates temporary teams for specific projects
- (So there are different levels to the business structure, but different individuals from those different vertical levels are taken horizontally)
what is Charles Handy’s “Shamrock Organisation” structure
a structure built with three main components
- Core staff
- full time, permanent workers (eg. teacher in school) - Temporary workforce
- part time, paid per hour
(eg. substitute teachers in school) - Outsource (subcontractors)
- a business hired other business to perform specific tasks
(eg. in school - school cleaning )
two types of data that can be collected to determine where the best location for a business is
- qualitative
(what are the factors, measurable by numbers, that effect the location of a business) - quantitative
(what are the factors, not measurable by number, that affect the location of a business)
offshoring definition
transferring part of the business to another country (either internally or to an external firm )
pros/cons of offshoring
pros:
- potentially access to cheaper labour costs
- avoid import tariffs
- access to specialised labour
cons:
- lose some control over business
- culture/language differences
- possibility of negative publicity
- possibility of lower quality
