Buku Ajar - Msdm D4 Mbi - 2017

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Member The Relationship Among International Environment, Competitive Strategy, and Organizational Structure Business Management International Business Department

01

Explain why the design of organizational structure is important to international companies !

 Organization by Function Organization by function is firms that organize their global activities by functions (Production, Finance, Marketing, Personnel, Research and Development, and Public Relations) and characteristic that needs to be running.

President

01

Vice President Product

Manufacturing Plants Foreign and Domestics

Vice President Marketing

Vice President Finance

Sales Office Foreign and Domestics

Dispresed Financial Office Foreign and Domestics

 Organization by Product As shown in Figure depicts a product – oriented organization. The rationale behind product organization is because of the increase products that are becoming obsolete, therefore companies must improve current product design and find new products and processes to stay ahead of the competition President

01

Area Specialist Latin America North America Middle East Africa Europa Far East

Product Group Executive

Product Group Executive

Corporate satff (Production, Marketing, Finance Research, Personnel, planning

Product Group Executive

Product Group Executive

 Organization by Geographical Area (Regional structure) This structure groups employees and the activities carried out in the same location or area. Used when there are differences need for goods or services in different locations, such as in several regions in a country. Geographical organizational structures are generally chosen only by companies that produce consumer goods, which depend on technology that is stable and well-known but requires large marketing capabilities. President

01

Product Manager

Vice President North America (Montreal)

Vice President Latin America (Sao Paolo)

Treasure

Corporate staff (productionm marketing finance, research planning, personal

Vice President Europa (London)

Comptroller

Marketing

Vice President Middle East/Africa (Cairo)

Production

Vice President Far East (Hongkong)

 Organization by Combination (Matrix) Matrix organizational structure is a combination of the advantages of product organization, geographical, and functional into a harmonious unity without sacrificing clear lines of authority. Companies that support matrix organization forms are said to have a geocentric management philosophy.

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Top Leadership

Matrix Management

Matrix Management Two-Boss Manager

Explain why the organizational dimension that must be consider when selecting organizational structure ? a. The first aspect that must being the priority are the division of job tasks, functions, and the responsibilities b. The second aspect is whether they are able to do the job or have a good competence to do their job. c. The third aspect is whether there is a balance between the authority in doing a task and the ability to do it.

02

The company can choose the right structure by considering organization dimension, the consideration are : 1. Standard

2. Administrative component 3. Control range 4. Specialization

5. Centralization 6. Delegation of authority 7. Integration

02

Discuss the statement “ the various organizational forms available for structuring international companies ?

In our opinion the various organizational forms available for structuring international companies is important to manage it, because every organization form has it own function. Organization structure are classified depend on their function and need in organization. And the point is structuring companies is depend on company’s need. Beside of that structure organization goals is great for company sustainability.

03

So we agree that international company have various structure in managing company the reason is organizational structures can help companies streamline business operations. Business owners, director and manager usually are responsible for organizing business functions into departments that can complete various business processes.

03

Decisions are made where they are among parent and subsidiary units of an international company !

04

Company usually have different organizational structure (in other words, power structures) that prescribe decision rights. In some companies, decision rights are centered on top managers (such as CEOs) who maintain control of almost all important decisions.

04

Most financial decision making is centralized, for financial decisions generally have an immediate impact on the entire company and are extremely difficult to reverse. As well, the expensive R&D projects are usually centralized. Most Multinational Corporation resist decentralizing their R&D activities. (For example, IBM pulled out of India and Mexico when their governments insisted on setting up R&D facilities in their countries). Decision making about production, marketing, and logistics, on the other hand, is usually decentralized, because problems in such areas require immediate solutions. The need to wait for headquarters to make or approve these types of decisions can severely and unnecessarily constrain managerial effectiveness.

05

Discuss how an IC can maintain control of a join venture or of a company in which the IC owns less than 50 percwnt of the voting stock ! With less than 50 percent of the voting stock, or even with no voting stock, an IC can still have control. Some methods of maintaining control are a management contract, control of the finances, control of the technology, and putting people from the international company in important executive positions.

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• Management Contract Contract Management also helps with monitoring supplier compliance, minimising business risk and capitalising on newly-available innovations.

• Control of The Finance In order for companies to keep the lights on and to grow, they need adequate cash flow for payroll expenses, supplies, inventory, and other operational expenses. • Control of The Technology

It is very important for an organization to control its technology strategically because when it is not well controlled, it might result into a big loss in the organization.

05

• Putting people from the international company in

important executive positions For controls to be effective, all operating units of an IC must provide headquarters with timely, accurate and complete reports, including those dealing with financial, technological, market opportunity, and political and economic information.

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An IC also must replacing fixed jobs with tasks performed by evolving teams that also known as de-jobbing.

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