Organization Theory and Design 12th Edition Daft Solutions Manual

Organization Theory and Design 12th
Edition Daft Solutions Manual

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CHAPTER SIX
DESIGNING ORGANIZATIONS FOR THE
INTERNATIONAL ENVIORNMENT
CHAPTER OVERVIEW
This chapter explores how managers design the organization for the international
environment. Reasons for expanding internationally are provided along with the
stages of international development and the use of strategic alliances and
acquisitions. The chapter examines global strategic approaches, the application of
various structural designs for global advantage and looks at coordination
mechanisms used in global organizations. Finally, the transnational model is
explained, a type of global organization that achieves high levels of the varied
capabilities needed to succeed in a complex and volatile international environment.
Learning Objectives
After reading this chapter you should be able to:

 Discuss organizational motivations for entering the global arena.
 Explain the stages of international development.
 Recognize the three major challenges global design faces.
 Understand globalization versus multidomestic strategies.
 Describe structural design options for international operations.
 Identify mechanisms for global coordination, knowledge transfer, and
resolving the tension between global uniformity and local responsiveness.
 Understand the transnational model of organizing.
CHAPTER OUTLINE
Managing by Design
Before reading the chapter, students will give their opinions on the following
statements:
 The only way an organization can reasonably expect to be successful in

different countries is to customize its products and services to suit the
local interests, preferences, and values in each country.
 It is an especially difficult challenge to work on a global team to coordinate
one’s own activities and share new ideas and insights with colleagues in
different divisions around the world.
93
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94 ● chapter six
 The most advanced multinational corporations have developed systems

for maintaining tight headquarters control over subsidiaries in dozens of
countries.
A LOOK INSIDE
Tesco
British grocery retailer Tesco isn’t accustomed to failure, but after spending five
years and about $1.61 billion, Tesco managers began preparing to sell or close
the company’s 199 Fresh & Easy markets and get out of the United States for
good. Fresh & Easy was a novel format for Americans—stores that were larger
than convenience stores but smaller than supermarkets and that focused on
selling fresh foods. As it turned out, Americans found the format neither fresh nor
easy. Managers imported British favorites instead of adapting to American tastes,
and each store carried the same selection of prepackaged meals and other
products, no matter its location. There was no deli section where food could be
made to order. Prepackaged sandwiches are commonplace to the British, but to
American shoppers they seemed like something from a vending machine. The
timing didn’t help either. Fresh & Easy opened in the United States just before the
recession devastated many of the areas in California, Arizona, and Nevada where
it located its earliest stores. The chain never turned a profit..
Entering the Global Arena
The world is rapidly developing into a unified global field, and every
company and manager needs to think globally. Emerging economies are
growing rapidly as providers of both products and services to developed
countries. . At the same time, these regions are becoming major markets for
the products and services of North American firms. For today’s companies,
the whole world is a source of business threats and opportunities.
BOOK MARK
The World Is Flat: A Brief History of the Twenty-First Century
by
Thomas L. Friedman
The global competitive playing field is being leveled. Friedman asserts that the
forces causing accelerated of globalization began in the final years of the
twentieth century. Friedman outlines ten forces, called flatteners, that flattened
the world including: Work Flow Software, Supply-Chaining, and the Steroids.
Friedman refers to a variety of new technologies as steroids “because they are
amplifying and turbocharging all the other flatteners.”
DESIGNING ORGANIZATIONS FOR THE INTERNATIONAL ENVIRONMENT ● 95
Motivations for Global Expansion

By going global companies can realize economies of scale and
exploit economies of scope—the number and variety of products
and services it offers.
IN PRACTICE
Amway
Amway started in 1959 with a direct sales model of independent entrepreneurs

selling to consumers. Sales in China became a $200 million business when the
Chinese government issued regulatory changes that required Amway to revise
its business model. The company established physical stores, manufactured
products in China and changed the compensation system. Amway took the
long-term view, and today, China is the company’s largest market.
Another reason for moving to global market is to take advantage of

low-cost production factors, especially lower-cost labor.
Organizations have gone international in search of lower costs of
capital, sources of cheap energy, reduced government restrictions,
or other factors that lower total production costs.
Stages of International Development

As a company evolves toward full-fledged global operations, they tend
to go through four stages :
 Domestic stage means that the company is predominantly
domestically oriented, but managers are developing initial
international involvement, often to increase market potential.
 International (Multidomestic) stage means that exports are
taken seriously and that the company deals with the
competitive issues of each country separately.
 Multinational means that it has marketing and production
facilities in many countries, worldwide access to capital, and
has more than one-third of its sales outside the home country.
 Global stage means that the company transcends any single
country and does not identify with a single home country.
HOW DO YOU FIT THE DESIGN?

What Is Your Cultural Intelligence
How might you develop greater empathy for people who are different from you?
Cultural intelligence is a manager’s capability to function well in situations
96 ● chapter six
characterized by cultural diversity. Cognitive CQ pertains to the head, emotional

CQ pertains to the heart, and behavioral CQ pertains to the body. Hone your
observational skills, take courses, look for international travel opportunities, and
learn to pick up on clues about how people from a different country respond.
Global Expansion through International Alliances and Acquisitions

International strategic alliances offer one way to get involved in
international operations. Licensing agreements allow a company to
use the technology or name of another. Joint ventures are separate
entities created with two or more active firms as sponsors. Many
companies prefer acquisitions because they offer greater control
than joint ventures. Acquisitions have been China’s preferred way of
expanding internationally.
IN PRACTICE
China’s International Expansion
China’s biggest international acquisition success story is Lenovo, which acquired

the personal computer business, including ThinkPad laptops, from IBM in 2005.
The company struggled for a few years, but Lenovo kept several key managers of
the IBM unit and split headquarters between Beijing and Morrisville, North
Carolina, where the IBM unit had been located. Acquisitions like this will likely
reshape the global business landscape.
The Challenges of Global Design
There are three primary segments of the global organizational challenge:

greater complexity and differentiation, the need for integration, and the
problem of transferring knowledge across a global firm.
• Movement into the international arena means increased complexity and

differentiation, demanding the development of a structure to fit the
numerous countries in which it operates. Often this means more product
differentiation which also means more internal organizational complexity.
• As organizations become more differentiated managers face the
increased need for coordination, the quality of collaboration
across the organizational units. The question is how to achieve
the integration necessary for a global organization to reap the
benefits of international expansion.
• Organizations need to learn from their international experiences and
exploit that learning to create and leverage global organizational
knowledge. Knowledge transfer is hindered by language, cultural, and

geographic distances; protection of one’s own division rather than
cooperation; viewing knowledge as power one unit does not want to give
up; the reluctance to use knowledge from elsewhere due to pride; and the
fact that much of this knowledge is not written down.
Designing Structure to Fit Global Strategy
An organization’s structure must fit its situation by providing sufficient

information processing for coordination and control while focusing employees
on specific functions, products, or geographic regions. Organization design
for international firms follows a similar logic, with special interest in global
versus local strategic opportunities.
Strategies for Global versus Local Opportunities

Managers choose between global standardization and local
responsiveness. A globalization strategy means that product
design, manufacturing, and marketing strategy are standardized,
which is less costly than creating different products for different
markets. Economic and social changes, including a backlash
against huge global corporations, have prompted consumers to
favor local products.
ASSESS YOUR ANSWER

The only way an organization can reasonably expect to be successful in
different countries is to customize its products and services to suit the
local interests, preferences, and values in each country.
ANSWER: Disagree. It is the case that people around the world often want
products and services that are tailored to their local needs and interests, and
many organizations are quite successful by responding to local market demands.
However, other international organizations attain competitive advantages by using
the same product design and marketing strategies in many countries throughout
the world.
A multidomestic strategy means that competition in each country

is handled independently of competition in other countries. A
multidomestic strategy would encourage product design, assembly,
and marketing tailored to the specific needs of each country.
Different global organization designs are better suited to either
global standardization or national responsiveness.
98 ● chapter six
IN PRACTICE
Panasonic
Panasonic established a joint venture in China in 1987. By the early 2000s, China
was Panasonic’s manufacturing hub for home appliances. However, Panasonic
learned to treat the goal of meeting local consumers’ needs as important as the
goal of achieving a global competitive advantage . . One adaptation was slimmer
refrigerators to fit in the smaller spaces typical of Chinese kitchens. Sales
zoomed. Today, the company is efficient both globally and locally.
International Division
When a company is low with respect to developing either a
globalization or multidomestic strategy, simply using an international
division with the domestic structure is an appropriate way to handle
international business. The international division has a status equal
to other major departments, and has its own hierarchy to handle
international matters such as sales or opening subsidiary plants.
Global Product Division Structure

Global product structure means that the product divisions take
responsibility for global operations in their specific product area.
Managers in each product division can focus on organizing for
international operations and directing employees’ energy toward
their own division’s global problems or opportunities. This structure
works best for worldwide production and sale of standard products.
Often product divisions compete instead of cooperating; and some
countries are ignored by managers. Country coordinators can
overcome these problems.
Global Geographic Division Structure

Global geographic structure means that each region reports
directly to the CEO and has full control of functional activities in its
geographical area. Although this structure lends itself easily to
exploiting opportunities for regional competitive advantages,
problems may result from the autonomy of each regional division.
It is difficult to plan on a global scale because each division acts to
meet only the needs of its region. It is difficult to introduce products
developed offshore into domestic markets, and there is often
duplication of line and staff managers across regions.
IN PRACTICE
Colgate-Palmolive Company
This example explains how Colgate-Palmolive has used the global geographic
structure to served it well in emphasizes individual autonomy, an entrepreneurial
spirit, and the ability to act locally. To facilitate coordination the company has
created an international development group that has responsibility for long-term
company planning and worldwide product coordination and communication. Now
the company has added two additional coordinating positions to further
coordinate its worldwide activities.
Global Matrix Structure

The global matrix structure is similar to the domestic matrix,
although distances are greater and coordination is more complex.
This complicated form would work best when there is balanced
pressure for the interests of both product standardization and
geographical localization and when coordination to share resources
is important.
IN PRACTICE
ABB Group
ABB has a global matrix structure to achieve economies of scale combined with
local flexibility and responsiveness. At the top are the chief executive officer and
an executive committee of 10 top managers, who hold meetings around the
world. Along one side of the matrix are product division managers. Along the
other side of the matrix is a regional structure with eight regional managers
responsible for local balance sheets, income statements, and career ladders.
Additional Global Coordination Mechanisms
Managers meet the global challenge of coordination and transferring

knowledge and innovation across highly differentiated units in a variety of
ways.
Global Teams
Also called transnational teams, global teams are work
groups made up of multinational members whose activities
span multiple countries. Teams are intercultural teams,
whose members come from different countries and meet
face to face or virtual global teams, whose members
conduct their work electronically. However, cultural and
language differences can create misunderstandings, and
100 ● chapter six
resentments and mistrust can quickly sidetrack the team’s

efforts.
IN PRACTICE
L’Oréal
The cosmetics firm L’Oréal exemplifies the global-local tension because personal-
care needs are unique to each culture. Yet, l’ Oréal is very global and very local.
Product development is the firm’s competitive advantage, so L’Oréal recruits
product development teams that report to managers who have mixed cultural
backgrounds. Teams share their ideas. L’Oréal places multicultural managers at
the center of interactions among brands, regions, and functions.
ASSESS YOUR ANSWER

It is an especially difficult challenge to work on a global team to
coordinate one’s own activities and share new ideas and insights with
colleagues in different divisions around the world.
ANSWER: Agree. The problems of different languages, locations, cultural values,
and business practices make membership on an international team especially
difficult. Global teams can be effective only if members have the patience and
skills to surmount the barriers and openly share information and ideas. Global
teams made up of people who are culturally astute and genuinely want to
coordinate and communicate with their counterparts in other countries perform
better.
Headquarters Planning
In this approach, the global headquarters takes an active
role in planning, scheduling, and control to keep the global
organization working together and moving in the same
direction. Without strong leadership, highly autonomous
divisions can act like independent companies rather than
coordinated parts of a global whole.
Expanded Coordination Roles

Creating specific organization roles can help to integrate all the
pieces. Often the role of top functional manager is expanded
to include responsibility for coordinating across countries.
Country managers can coordinate across functions. The
network coordinator coordinates information and activities
related to key customer accounts. Benefits include: cost
savings, better decision making, greater revenues, and
increased innovation.
Transnational Model of Organization
The transnational model exists for large multinational firms with

subsidiaries in many countries that try to take advantage of both global and
local advantages. It creates an integrated network of individual operations
linked together to achieve the multidimensional goals of the overall
organization The transnational model is a managerial state of mind, a set
of values, a shared desire to make a worldwide learning system work, and
an idealized structure for effectively managing such a system.
Characteristics of a transnational organization:

 Assets and resources are dispersed worldwide into highly specialized
operations that are linked together through interdependent
relationships.
 Structures are flexible and ever-changing, operating on the principle
of flexible centralization─ centralizing some functions in one country
and decentralizing them in another.
 Subsidiary managers initiate strategy and innovations which become
strategy for the corporation as a whole.
 Unification and coordination are achieved through corporate culture
and shared vision and values, and management style, rather than
through formal structures and systems.
ASSESS YOUR ANSWER

The most advanced multinational corporations have developed
systems for maintaining tight headquarters control over subsidiaries
in dozens of countries.
ANSWER: ANSWER: Disagree. To succeed as part of a huge global firm, individual units
need flexibility and autonomy. Most of the alignment in a transnational
organization is achieved through common culture and values, shared vision
and goals, and interdependent relationships among subsidiaries. Managers
have to stretch out of their familiar comfort zone to succeed internationally,
which sometimes means giving up control in the traditional sense.
Design Essentials
 Three primary motivations for global expansion are to realize

economies of scale, exploit economies of scope, and achieve
scarce or low-cost factors of production such as labor, raw
materials, or land.
102 ● chapter six
 Organizations evolve through four stages: a domestic orientation,

an international orientation, a multinational orientation, and a global
orientation.
 Global organizational challenges include: addressing environmental
complexity through organizational complexity and differentiation,
achieving integration and coordination among differentiated units,
and implementing mechanisms for the transfer of knowledge and
innovations.
 Geographic structures are effective for organizations that benefit
from a multidomestic strategy. A product structure supports a
globalization strategy. Huge global firms might use a matrix
structure. Many firms use hybrid structures.
 Additional coordination mechanisms include global teams, stronger
headquarters planning and control, and specific coordination roles.
 Companies are moving toward the transnational model of
organization, which is based on a philosophy of interdependence.
LECTURE ENHANCEMENT
Danish Chewing Gum Runs Amok of Environmental Laws in Russian
Based on theArticle, “Dandy Chewing Gum Plant Avoids Shutdown” in The
Moscow Times (Tuesday, Jul. 8, 2003. Page 7)
http://www.moscowtimes.ru/stories/2003/07/08/046.html
by
Yevgenia Borisova
This article can be used to show how international companies must learn to
respect and abide by the laws and expectations of the countries in which they
operate to avoid problems.
****************************************************************************
The nation's largest chewing gum manufacturer narrowly avoided being shut
down by the federal government Monday for "the unauthorized release of
harmful agents into the atmosphere."
The Natural Resources Ministry on Friday said it had decided to suspend the
operations of Danish candy giant Dandy's Dirol-Cadbury factory in Novgorod
until the company could provide the ministry with documents detailing the
changes it had made to production facilities that caused the "dangerous," but
unspecified release.
However, the $100 million factory, which opened four years ago and now
employs 350 people, won a court injunction at the last minute allowing it to
continue operating. The Dirol-Cadbury factory produces 40 percent of all
chewing gum sold in Russia, including the Stimorol and Dirol brands, and has
revenues of about $310 million per year, according to Business-Analytica.
The ministry issued a statement saying that a "planned inspection" by its

Novgorod arm in April found that the factory was releasing a substance into the
atmosphere that was three or four times as toxic as the ethanol it had
previously released in the course of manufacturing chewing gum.
The ministry, however, did not name the substance in question.
The injunction, issued by a St. Petersburg court, froze the ministry's shutdown
order and gave the factory time to prepare and file the documents requested
by the ministry.
Dirol-Cadbury spokesman Alexander Ovchinnikov said his company was to
blame for failing to inform the ministry of the changes in its production facilities.
He said some unnamed members of the company's staff had failed to submit
the documents by the June 24 deadline.
However, he denied that the byproducts of manufacturing at the factory were
any more harmful to the atmosphere than "normal diesel exhaust."
"It is nothing special," he said. "We recently replaced ethanol with less harmful
ingredients, such as oil and lactic acid. All the ministry needs is new
documents."
The ministry also said the factory had failed to get permission for the release of
exhaust from new diesel-based equipment used to service filters and other
industrial machines that is manufactured by U.S. company Caterpillar.
Ovchinnikov said that within a month the ministry will receive all the documents
that it has requested.
A court is scheduled to hear developments in the case July 17.
DISCUSSION QUESTIONS
1. Name some companies that you think could succeed today with a
globalization strategy and explain why you selected those companies.
How does the globalization strategy differ from a multidomestic strategy?
ANSWER: The companies that the students come up will vary.

Multidomestic strategy means that exports are taken seriously and that the
company deals with the competitive issues of each country separately.
Globalization means that the company transcends any single country and
does not identify with a single home country. Products and practices that
work in any one country are used in other appropriate countries.
2. Why do you think the tension between a desire for global uniformity and
local responsiveness is greater today than in the past?
ANSWER: Students can discuss this question. In reality, there has been
104 ● chapter six
an escalating tension for most companies between the need for global
uniformity and the need for local fit and responsiveness. Today,
consumers have many choices and very different lifestyles. Panasonic
was losing market share to a local Chinese company until it. learned to
meet local consumers’ needs. The company created a research center to
develop a deep understanding of different consumer lifestyles
3. Many American companies enter China through joint ventures with local
firms, but China is succeeding in the United States primarily with a
strategy of buying companies outright. What are some factors that
might account for this difference?
ANSWER: Companies seek joint ventures to achieve production cost

savings. However, when they can persuade senior managers of foreign
companies to stay on, many companies prefer acquisitions because they
offer greater control than joint ventures. Acquisitions have been China’s
preferred way of expanding internationally. Chinese companies have
succeeded by buying strong brands overseas and keeping them healthy.
They keep local managers and let them run the companies.
4. Do you think it makes sense for a transnational organization to have

more than one headquarters? What might be some advantages
associated with two headquarters, each responsible for different
things? Can you think of any drawbacks?
ANSWER: Answers will vary, and this question can spark a lively debate.
No. The transnational organization does not need to have more than one
headquarters because the company’s executives are learning to manage
a worldwide organization “as a network, not a centralized hub with foreign
appendages. Since the units of a transnational organization network are
far-flung, it would add complexity and confusion to have more than one
headquarters. The transnational model creates an integrated network of
individual operations that are linked together to achieve the
multidimensional goals of the overall organization. Two headquarters
might cause a breakdown in communication. With one headquarters,
individual units still have autonomy and the ability to have an impact on
other parts of the organization. Drawbacks include added organizational
complexity.
5. What are some of the primary reasons a company decides to expand

internationally? Identify a company in the news that has recently built a
new overseas facility. Which of the three motivations for global expansion
described in the chapter do you think best explains the company’s
decision? Discuss.
ANSWER: By going global companies can realize economies of scale and

exploit economies of scope—the number and variety of products and
services it offers. Another reason for moving to global market is to take
advantage of low-cost production factors, especially lower-cost labor. The
companies that the students come up will vary as will their analysis of the
motivations behind that expansion.
6. When would an organization consider using a matrix structure? How does

the global matrix differ from the domestic matrix structure described in
Chapter 3?
ANSWER: The global matrix structure is most effective when forces for both
global integration and for national responsiveness are high. It presents a
complexity in the structure, and therefore should not be considered when
either or both of those forces are low because it would impose unnecessary
complexity on organizational activity. However, when the needs are present,
the design can help the organization effectively match its structure to its
strategy.
The international matrix has much in common with the inner workings of the
domestic matrix, except for the fact that distances are greater--worldwide--
and coordination is more complex. This means that decisions may take
longer to make unless new communications technology is used to help
overcome distance. It means, further, that factors of local conditions,
legalities, and cultures must also be considered when running the
organization. Structurally, the domestic matrix highlights managers for both
functional areas and product or project areas, whereas the international
matrix typically highlights managers for both regional areas and product or
project areas.
7. Name some of the elements that contribute to greater complexity for

international organizations. How do organizations address this
complexity? Do you think these elements apply to an online company
such as Netflix that wants to expand its online video streaming service
internationally? Discuss.
ANSWER: The factors that contribute to greater complexity for international

organizations include offering modified or different products, the need for
integration, the problem of transferring knowledge across a global firm, and
cultural differences. Organizations address this complexity by adapting the
organizational structure to produce offerings complying with local tastes,
culture, and laws. They often must develop new positions as Colgate-
106 ● chapter six
Palmolive did.
Online companies such as Netflix must be able to adapt to more complexity.

Cultural and legal differences will still play a major role and may require
some organizational changes.
8. Traditional values in Mexico support high power distance and a low

tolerance for uncertainty. What would you predict about a company that
opens a division in Mexico and tries to implement global teams
characterized by shared power and authority and the lack of formal
guidelines, rules, and structure?
ANSWER: Mexican workers would probably not respond well to this type of
approach. They would view management as weak and would want more
direction to be provided them. Another response might be that the teams set
up this way would have a strong personality assume the stronger leadership
role that their culture prefers.
9. Do you believe it is possible for a global company to simultaneously

achieve the goals of global efficiency and integration, national
responsiveness and flexibility, and worldwide transfer of knowledge and
innovation? Discuss.
ANSWER: While this is certainly possible, it takes a lot of work. The

company may have to give up some efficiency and have a little less
integration to achieve the responsiveness and flexibility it desires. The
company may learn that what makes it efficient in one country does not fit
the culture of another country or is not allowed by local laws.
10. Compare the description of the transnational model in this chapter to the
elements of the learning organization described in Chapter 1. Do you
think the transnational model seems workable in a huge global firm?
Discuss.
ANSWER: A corporate culture that is strong and fosters shared values

characterizes both the learning organization and the transnational model; it is
described in the text as the learning organization extended to the
international arena. The transnational model has multiple centers, subsidiary
managers who initiate strategy for the whole company, and coordination and
control which is achieved through corporate culture and shared values. This
type of structure may be the only workable structure in huge global firms that
truly have subsidiaries in many countries that try to exploit both global and
local advantages.
When it is necessary to deal with multiple interrelated competitive issues, the

complexities of even the global matrix structure are inadequate to carry
beyond balancing simultaneous product and geographic needs. Simply due
to the size of the organization, more restrictive types of structures would tend
to slow down the organization and make it less competitive.
WORKBOOK ~ MADE IN THE U.S.A?
Through discussion, this activity will help students understand that most products
we buy and use are international in nature and that we have truly become a global
economy. A variation on this exercise would be to challenge the students to find a
product made completely in the U.S.A. and then to discuss how difficult this was to
do.
CASE FOR ANALYSIS ~ TopDog Software
In discussing this case your students should answer the following questions:
1. What are the arguments for and against TopDog’s going international?
ANSWER: The arguments can be gleaned from the case itself. One reason
for going international is a defensive response to the invasion of FastData,
the London company, and other possible international companies. The other
reason is that international markets offer an attractive way to expand both
sales and profits.
Arguments against going international are that the company still can expand
domestically and is really still establishing itself in the U.S. It also does not
have any international experience and any approach it uses will require an
investment in both time and money.
2. If TopDog does decide to go international should it open its own

offices, take on foreign partners, license its products to foreign
distributors, or follow some other method?
ANSWER: There are pros and cons of each of these approaches. Opening
its own offices gives the company maximum control and it does not have to
share profits with anyone. Howe ever, this would be expensive and the
company would probably make many mistakes as it learns the market
conditions and requirements in each country where an office is located.
Taking on foreign partners will reduce the learning curve and facilitate
complying with local conditions, culture, and laws. However, this will mean
108 ● chapter six
sharing profits and the company may find that it is just training its own future
competition.
Licensing foreign distributors also will reduce the learning curve and facilitate
complying with local conditions, culture, and laws. The profits will be even
lower than with partners and the loyalty of these distributors will depend on
how well they can sell the products and how much profit they can earn. If
they find a better deal from another company, they could abandon TopDog.
CASE FOR ANALYSIS ~ Rhodes Industries
Students will most likely come to the same conclusion that Javier has, namely that
the worldwide product structure seems to make the most sense. Discuss with your
class how they came to this conclusion and if it is valid.
Next you will want to address the problems at the end of the case that Javier has
raised in a class discussion. In this discussion encourage students to give reasons
for their answers, not jus to state that they think one position is better than another.
1. Would the subsidiaries still be competitive and adaptive in local markets if

forced to coordinate with other subsidiaries around the world?
2. Would Business Managers be able to change the habits of subsidiary
managers toward more global behaviors?
3. Would it be a better idea to appoint Product Director Coordinators as a first
step, or jump to the Business Manager product structure right away?

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Organization Theory and Design 12th

Edition Daft Solutions Manual

After reading this chapter you should be able to:

 The only way an organization can reasonably expect to be successful in

 The most advanced multinational corporations have developed systems

Entering the Global Arena

Motivations for Global Expansion

Amway started in 1959 with a direct sales model of independent entrepreneurs

Another reason for moving to global market is to take advantage of

Stages of International Development

HOW DO YOU FIT THE DESIGN?

characterized by cultural diversity. Cognitive CQ pertains to the head, emotional

Global Expansion through International Alliances and Acquisitions

China’s biggest international acquisition success story is Lenovo, which acquired

The Challenges of Global Design

There are three primary segments of the global organizational challenge:

• Movement into the international arena means increased complexity and

knowledge. Knowledge transfer is hindered by language, cultural, and

Designing Structure to Fit Global Strategy

An organization’s structure must fit its situation by providing sufficient

Strategies for Global versus Local Opportunities

ASSESS YOUR ANSWER

A multidomestic strategy means that competition in each country

Global Product Division Structure

Global Geographic Division Structure

Global Matrix Structure

Additional Global Coordination Mechanisms

Managers meet the global challenge of coordination and transferring

resentments and mistrust can quickly sidetrack the team’s

ASSESS YOUR ANSWER

Expanded Coordination Roles

Transnational Model of Organization

The transnational model exists for large multinational firms with

Characteristics of a transnational organization:

ASSESS YOUR ANSWER

 Three primary motivations for global expansion are to realize

 Organizations evolve through four stages: a domestic orientation,

The ministry issued a statement saying that a "planned inspection" by its

ANSWER: The companies that the students come up will vary.

ANSWER: Companies seek joint ventures to achieve production cost

4. Do you think it makes sense for a transnational organization to have

5. What are some of the primary reasons a company decides to expand

ANSWER: By going global companies can realize economies of scale and

6. When would an organization consider using a matrix structure? How does

7. Name some of the elements that contribute to greater complexity for

ANSWER: The factors that contribute to greater complexity for international

Online companies such as Netflix must be able to adapt to more complexity.

8. Traditional values in Mexico support high power distance and a low

9. Do you believe it is possible for a global company to simultaneously

ANSWER: While this is certainly possible, it takes a lot of work. The

ANSWER: A corporate culture that is strong and fosters shared values

When it is necessary to deal with multiple interrelated competitive issues, the

WORKBOOK ~ MADE IN THE U.S.A?

CASE FOR ANALYSIS ~ TopDog Software

2. If TopDog does decide to go international should it open its own

CASE FOR ANALYSIS ~ Rhodes Industries

1. Would the subsidiaries still be competitive and adaptive in local markets if

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