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INBS 250

by: Maria Notetaker
Maria Notetaker

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Chapter 14 Notes
Introduction to International Business
Class Notes
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This 3 page Class Notes was uploaded by Maria Notetaker on Thursday September 15, 2016. The Class Notes belongs to INBS 250 at Montclair State University taught by Nahra in Spring 2015. Since its upload, it has received 6 views. For similar materials see Introduction to International Business in International Business at Montclair State University.

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Date Created: 09/15/16
Ch. 14 - Organization of International Business Friday, March 20, 2015 11:29 AM   Organizational architecture: totality of a firm's organization including:  1 Organizational structure a Centralized: upper management makes decisions ­­ pass it on to lower levels who  implement decisions outlined to them  b Decentralized: upper management makes goals but lower level actively makes  decisions; allow middle managers and lower level managers to make adjustments and  tailor it to marketplace to make it more successful (higher risk) Has 3 dimensions: o  Vertical differentiation how people in power make decisions and how  power is shared/where it is concentrated   Horizontal differentiation: different divisions (domestically and then  globally) and how they function   Integrating mechanisms  2 Control systems and incentives a Control systems: metrics used to measure performance of subunits (standards for  employees) b Incentives: used to rewarded managerial behavior  2 Processes, organizational culture and people a Processes: how decisions are made and work is performed within the organization b Organizational culture: norms and values shared among employees of an organization c People: the employees and the strategy used to recruit, compensate and retain those  individuals (qualities, skills, experience, background)    Structures:  Functional structure (chart): shows who reports to who Product divisional structure (chart): divide the company based on products they're selling; each  product has their own management  International divisional structure (chart): separate division for international company; domestic  market is still the main market in the company; not separating much between home country and  overseas; international division gets leftovers of domestic; fights for their own resources Worldwide product division structure (chart): putting domestic and international market under  one umbrella; important to do well overseas AND domestically Worldwide area structure (charge): worldwide decision making approach; all decisions will fall  under one person; decentralized; facilitates local responsiveness in geographical area; putting  several markets under one umbrella  Global matrix structure (chart): manager reports to each product line and then headquarters  (takes a lot of time and effort; not commonly used)    Knowledge work: network for transmitting info within an org that is based not on informal  contacts between managers    Types of control systems  Personal control: managers will personally meet face to face with subordinates  (time  consuming but depends on style of manager)  Bureaucratic control: controlled activities through budget; system of rules and procedures that directs the actions of subunits; budgets and capital spending rules   Output control: setting goals to achieve of sales and expressing those goals in terms of  objective performance metrics; how managers are evaluated (year or monthly)  Cultural control: when employees "buy into" the norms and value systems of the firm;  how you interact inside the company and how you behave outside the company    Incentives: devices used to reward behavior or penalize  Performance ambiguity: when the causes of a subunit's poor performance are not clear Processes: rules/regulations put in place for employees to follow at all levels (domestically and  globally) Organizational cultures: ways companies treat you; the values and norms that employees are  encouraged to follow    Link between strategy and architecture:      J&J (decentralized approach) In Japan, manager decided not to sell J&J's #1 global product, Tylenol  In Italy, they did FDI and manufacturing baby oil (two different sizes ­ one for Italy and Europe)  ^ When they saw these things happen, they switched to centralized decision making (have to  report back to headquarters for approval ­­ they lost 40 years of sales of baby oil and Tylenol)      maria gori at 3/20/2015 12:33 PM      


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