GLOBAL ORGANIZATION DESIGN

ENTERING THE GLOBAL ARENA

Motivations for Global Expansion :• Economies of scale• Economies of scope• Low-cost production

factors

Go Global or No ???

STAGES OF INTERNATIONAL DEVELOPMENT

I.Domestic

II.International

III.Multination

al

IV.Global

StrategicOrientation

Domestically oriented

Export-oriented, multidomestic

Multinational

Global

Stage of Development

Initial foreign involvement

Competitive positioning

Explosion Global

StructureDomestic structure plus export department

Domestic structure plus international division

Worldwide geographic, product

Matrix, trans-national

MarketPotential

Moderate, mostly domestic

Large, multidomestic

Very large, multinational

Whole world

GLOBAL EXPANSION THROUGH INTERNATIONAL STRATEGIC ALLIANCES

• Licensing• Joint ventures• Consortia

DESIGNING STRUCTURE TO FIT GLOBAL STRATEGY

Model for Global Versus Local Opportunities

Globalization strategyThe product design, manufacturing, and marketing strategy are standardized throughout the world.

Multidomestic strategyCompetition in each country is handled independently of competition in other countries.

MATCHING ORGANIZATIONAL STRUCTURE TO INTERNATIONAL ADVANTAGE

When Forces for Global Integration

are . . .

And Forces for National

Responsiveness

are . . .Strategy Structure

Low Low Export International Division

High Low Globalization Global Product Structure

Low High Multidomestic Global Geographic Structure

High High Globalization and

Multidomestic

Global Matrix Structure

BUILDING GLOBAL CAPABILITIES

THE GLOBAL ORGANIZATIONAL CHALLENGE

Complexity andDifferentiation

Need forIntegration

Transfer ofKnowledge andInnovation

• Create a structure to operate in numerous countries that differ in some aspects

Learning international experiences by sharing knowledge and innovation across the enterprises

Lack of trust Language barriers, cultural dismilarities, geographic

distances Protect interest rather than cooperate with others Knowledge and innovation as power and want to hold it The “not-invented-here” syndrome Much knowledge is in the minds, can’t easily be written

down and shared with others

Global Teams Transnational teams simultaneous contributions by:

• Help to address the challenge• Achieve global efficiencies, organizational• Learning, knowledge transfer, and adaptation

on global level Headquarters Planning Take an active role in planning, scheduling, and controling Expanded Coordination Roles

CULTURAL DIFFERENCES IN COORDINATION AND CONTROL

• National Value System- Influence management and organizations- Two dimensions : Power distances

Uncertainty avoidance

• Three National Approaches to Coordination and Control- Centralized Coordination in Japanese Company- European Firm’s Decentralized Approach- The Unites States : Coordination and Control Trough

Formalization

THE TRANSNATIONAL MODEL OF ORGANIZATION

Transnational Model ?

Definisi :•Jenis yang paling maju dari organisasi Internasional•Beroperasi melintasi berbagai produk, pasar dan budaya.•Organisasi kompleks, mengintegrasikan bagian-bagian yang bervariasi.•Terdiri dari PI dan AP, tersebar di banyak negara.

Tahapan Pengembangan Perusahaan Transnational :

Pola Hubungan dan Strategi Bisnis MNC

PI

AP AP

AP

AP

Karakteristik :1.PI menyediakan tim ahli manajemen yg memiliki keterampilan menembus pasar global2.AP memanfaatkan tim ahli untuk mengadaptasi produk, proses dan strategi pasar3.Arus informasi mengalir 2 arah4.SI bersifat Interorganisasi , menghubungkan proses dan database PI terhadap AP

INTERNATIONAL

Pola Hubungan dan Strategi Bisnis MNC

PI

AP AP

AP

AP

Karakteristik :1.AP diberikan kebebasan memenuhi kebutuhan konsumsen di wilayahnya sendiri2.AP dibebaskan untuk mengembangkan produk dan praktek bisnis3.Arus informasi berasal dari AP ke PI dalam bentuk laporan keuangan4.SI bersifat desentralisasi dengan proses dan database berdiri sendiri di masing-masing AP

MULTINASIONAL

Pola Hubungan dan Strategi Bisnis MNC

PI

AP AP

AP

AP

Karakteristik :1.PI menyediakan produk standart untuk memenuhi kebutuhan konsumen2.PI sebagai produk sentral untuk disebarkan ke seluruh AP3.Arus informasi berasal dari PI ke AP dalam bentuk laporan keuangan4.SI bersifat sentralisasi dengan proses dan database yang berlokasi di PI

GLOBAL

Pola Hubungan dan Strategi Bisnis MNC

PI

AP-1

Karakteristik :1.Asset dan sumber daya tersebar diseluruh dunai, hubungan interdependen2.Struktur Fleksibel dan selalu berubah3.AP melakukan strategi dan inovasi utk menjadi strategi perusahaan secara keseluruhan4.Unifikasi dan koordinasi dicapai melalui corporate culture, shared vision & value, management style. Not formal structure & system.5.PI dan AP bekerja bersama memformulasi-kan strategi6.Arus informasi menggunakan standar skala internasional7.Menempatkan SI dalam tanggung jawab penuh utk mengelola database demi keseragaman rancangan di seluruh jaringan

TRANSNASIONAL

AP-1

AP-1

AP-1

Transnational Organization Network

The Network Structure of N.V. Philips