Week three - organisation of the international firm Flashcards

1
Q

what do companies need to balance global rationalisation with

A

local responsiveness

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2
Q

how do strategists and marketers approach problems?

A
  • strategists: centralisation vs decentralisation
  • marketers: standardisation vs adaptation
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3
Q

what are the four P’s

A
  • product
  • price
  • place
  • promotion
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4
Q

what is meant by local dimension

A

each country is different, there is a high sensibility to differences in local markets

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5
Q

what pressures are there in the global dimension

A
  • multinational consumers
  • intensity of technology/investment
  • multinational competitors
  • universal tastes and needs
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6
Q

what are the pressures on the local dimension

A
  • differences in tastes and needs
  • differences in market structures
  • local government requirements
  • high transport costs
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7
Q

what is global convergence driven by

A
  • the low cost and frequency of international communication, transport and travel
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8
Q

what is standardisation

A

the process of establishing uniformity across manufacturing materials and processes

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9
Q

what are the benefits of standardisation

A
  • lower production costs
  • economies of scale
  • higher efficiency
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10
Q

what is global strategic alignment

A

buyers can shop at one global market, suppliers and competitors create global industries resulting in companies coordinating their global strategies

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11
Q

what factors facilitate a global approach

A
  • political (reduces trade barriers)
  • social (favours standardisation and global branding)
  • technology (increases economies of scale)
  • competitive (induces integration and coordination)
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12
Q

what is localisation

A

adapting a product or content to fit a specific market or country and adjusting its functional properties to accommodate the linguistic, cultural, political and legal differences

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13
Q

what is an international diversity perspective

A

strategists suggest you must be willing to adapt to complex variety and fragmentation that characterises our world

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14
Q

why is the level of international variety quite consistent

A
  • habits change slowly, cultural norms are rigid
  • legal differences
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15
Q

what factors facilitate a multi domestic approach

A
  • cultural factors (reduces the benefits of standardisation)
  • commercial factors (requires differentiated approaches to sales and marketing)
  • legal factors (limits free flow of people, goods and data/imposes localisation constraints)
  • technical factors (reduces the benefits of economies of scale)
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16
Q

what are the three main international strategic approaches for the international strategy

A
  • global strategy
  • transnational strategy
  • multidomestic strategy
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17
Q

what is meant by centralisation vs de-centralisation

A

distribution of decision making authority and responsibilities between headquarters and subsidiaries

18
Q

what is meant by formalisation and standardisation

A

establishment of written, official rules, these determine allowed behaviour and criteria for decision making

19
Q

what is socialisation

A

learning and internationalisation of values, norms and behavioural patterns accepted by the company

20
Q

what are subsidiaries used for

A

channels to expand markets and reach a global scale

21
Q

what is an ethnocentric mindset

A

maintenence of national identity as leadership positions are occupied by people of the country of origin

22
Q

why are international operations conceived as a set of domestic operations

A

because they are linked by a common property

23
Q

why do some subsidiaries have R&D units

A

to adapt products or to develop new market-specific products

24
Q

what is the role of subsidiaries in global strategy

A

passive (dependence)

25
Q

what is the role of subsidiaries in multi domestic strategy

A

autonomous subsidiary

26
Q

what is a polycentric mindset

A

managerial post are occupied by people of the host country

27
Q

what is the organisational structure of a global srategy

A

international division (centralisation) and global product division (global perspective)

28
Q

what are the coordination mechanisms for global strategy

A

socialisation and control results

29
Q

which strategic approach has the highest dispersion of the activities of the value chain outside the country of origin

A

multi-domestic approach

30
Q

what are the subsidiaries conceived as in a transnational strategy

A

as part of a ‘whole’, not as ‘satellites’ of the matrix, flows of people, products and technologies

31
Q

what is a geocentric mindset

A

the nationality of managers does not matter

32
Q

what is the organisational structure of transnational strategy

A

multidimensionality

33
Q

what are the coordination mechanisms of transnational strategy

A

importance of socialisation and informal relationships, selective centralisation and decentralisation

34
Q

what are the coordination mechanisms of a global strategy

A

centralisation, formalisation and behaviour control

35
Q

what are the characteristics of a functional structure

A
  • first international step (predominance of domestic sales)
  • functional units
  • export activity is in charge of a manager or department
  • few product lines
36
Q

characteristics of an international division structure

A
  • a unit is centralising all international activity
  • improves coordination of all forms of implementation
  • facilitates communication between parent and subsidiaries but limits communication between the international division and domestic operations
  • if it grows its importance, may lead to conflict with domestic units
37
Q

characteristics of a product division structure

A
  • operations related to the same products are spread internationally
  • centralises decision making regarding the product and decentralises decisions non-related to products to the subsidiaries
  • rationalisation of production plants and centralisation of management capacity, improving relations and adaptation to customers
  • duplication of personnel and functions in each division, coordination problems between divisions
38
Q

characteristics of a geographic division structure

A
  • result of the increase in the number of countries, unit responsible for all business in a given area
  • operations in an area must be sufficiently complex, many different (opportunity for specialisation and economies of scale)
  • facilitates information between divisions and subsidiaries, sensitivity to local conditions
  • duplication and coordination problems
39
Q

characteristics of a matrix structure

A
  • consequence of complexity growth in the international area
  • combines dual authority flows in order to balance global integration and local responsiveness
  • flexible organisation of resources
  • dual information flows should improve conflict resolution among functions, markets and products
  • problems: complexity and dual authority
  • information collapses
  • confusion/responsibility avoidance/conflict
40
Q

characteristics of a hybrid structure

A
  • consequence of assymetries: some parts of the organisation are adapted to markets, yet other are not large enough to be efficient
  • combines functional units with outputs (product or market units)
  • problems: tendancy to isolation among operations carried out by matrix and other units