W5S1 Building the MNE

Building the Multinational Enterprise

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5 Components in Building the MNE
• Visionary leadership • Strategy • Org culture • Org structure • Org processes
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4 Features: Visionary leadership
• International mindset & cosmopolitan values (open to cultural diversity) • Strategic vision (where you want to me and how will you get there) • Willing to commit resources to international ventures • Willing to invest in people (hire foreign multin
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What is a Vision? Mission?
• Vision: Picture of what the firm wants to be & achieve • Mission: Specifies business/es in which the firm intends to compete & the customer it intends to serve
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Good vision/mission statement characteristics (6)
• Realistic conceptualisation of the org's long-term position • Use no meaningless superlatives • Differentiates from others • Defines business operations • Relevant to all • Memorable. Inspiring. Stimulating
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Should the vision statement be the same for the whole MNE/not?
• Depends on the diversification strategy type & • How close the subsidiaries work together
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Org culture (3)
The way we do things around here •Basic assumptions and belief shared by org members -Shapes org's internal & external view
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Developing a global org culture (5)
• Global perspective • Global competence & cross-cultural skills • Single corporate language for business communications • Interdependency across business units • Globally accepted ethics
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Org structure (2)
• Specifies the firm’s formal reporting relationships, procedures, controls, authority & decision-making processes; • Critical in effective strategy implementation
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Openminded and collaborative relationships with subsidiaries (4)
• Identify with broad corporate objectives • Visit subsidiaries; instil values • Encourage subsidiary interactions & sharing with meetings • Incentives & penalties to promote compliance with goals
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6 Organisational structures for int’l operations
• Export dept • International division structure • Geographic area, product & functional structure • Matrix structure
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Export dept defined (w/ 3 Pros)
• Unit within the org; manages export operations Pros: 1) all under 1 dept 2) efficiency in activities 3) small resource commitment Cons: 1)focus on domestic mkt 2) minimal learning about foreign mkts 3) reliant in foreign intermediaries
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Export dept (3 Cons)
Cons: 1)focus on domestic mkt 2) minimal learning about foreign mkts 3) reliant in foreign intermediaries
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Intl division structure defined (w/ 3 Pros)
-intl activities centralised; separate from domestic units Pros: 1) increased commitment to intl operations 2) centralised mgt & coordination of intl activities 3) intl experts focus on developing opportunities abroad
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Intl division structure (3 Cons)
Cons: 1) competition bet. Domestic & international units 2) limited knowledge sharing 3) separate R&D & planning
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Geographic area structure defined (w/ 3 Pros)
-decentralised mgt & control of operations geographically Pros: 1) responsive to market 2) balance between global integration and local integration on a regional basis 3) improve communications & coordination among subsidiaries within each region Co
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Geographic area structure (3 Cons)
1) lack global orientation 2) limited knowledge sharing w/ other geographic units & headquarters 3) limited economies of scale
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Product structure defined (w/ 3 Pros )
-management of international operations organised by major product lines (product divisions) -AIM: worldwide coordination of product categories Pros: 1) support functions focus on products 2) global mgt & coordination 3) scale economies
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Product structure (3 Cons)
Cons: 1) duplication if support functions for product divisions 2) may favour subsidiaries with fastest returns 3) excessive focus on products not markets
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Functional structure defined (w/Pros-2)
-organising intl operations by functional activities -often used by oil companies -2 major functional lines: production & mktg Pros: 1) central control & coordination 2) global strategy w/ functional expertise
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Functional structure (3 Cons)
Cons: 1) lack expertise in coordinating functions in diverse locations 2) difficult coordination when there's numerous product lines 3) not as responsive to mkt
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Matrix structure defined (2)
-blends product, geographic area and functional structures - each product's shared by a product unit and geographic areas; reports to 2 managers
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Pros of matrix structure (3)
1) responsive + global strategy 2) aims to combine the best elements of product, geographic area and functional structures 3) interorganisational learning
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Cons of matrix structure (3)
1) confusing dual reporting 2) waste time; conflicts 3) not as responsive to mkt
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Other cards in this set

Card 2

Front

4 Features: Visionary leadership

Back

• International mindset & cosmopolitan values (open to cultural diversity) • Strategic vision (where you want to me and how will you get there) • Willing to commit resources to international ventures • Willing to invest in people (hire foreign multin

Card 3

Front

What is a Vision? Mission?

Back

Preview of the front of card 3

Card 4

Front

Good vision/mission statement characteristics (6)

Back

Preview of the front of card 4

Card 5

Front

Should the vision statement be the same for the whole MNE/not?

Back

Preview of the front of card 5
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