Chapter 6 IB

Changes in an international company's strategy may require changes in the organization's design,but not the reverse

Two of the concerns that management faces in designing the organizational structure for aninternational company are (1) finding the most effective way to take advantage of geographicdifferences, and (2) coordinating the activities of departments to enable the firm to meet its overallobjectives

The initial choice of organizational structure after discarding the international division isusually a hybrid based on product and market factors.

Issues arising due to production coordination in regionalized organizations have resulted in hiringspecialized product managers who have no line authority

Advantages of the virtual corporation concept include that it allows a company to buildcompetence from the ground up and to increase management's control over the corporation'sactivities.

Reliance on subsidiary management can depend on how well the executives know one anotherand how well they know company policies.

One element in the degree of headquarters’ reliance on subsidiary management is the familiarityof headquarters with conditions in the subsidiary’s home country

In larger, older organizations, fewer decisions are made at headquarters.

Virtual corporation is a form of organization characterized by lateral decision processes,horizontal networks, and a strong corporate-wide business philosophy.

Multiple managers must agree on a decision is the cause of the main disadvantage associated with a hybrid organization

Key trends in organizational design is reengineering, virtual corporations, and horizontal corporations

Disadvantages to horizontal corporation are vulnerable to partners, unintended "borrowing" of knowledge, reduced management control.

When a company employs reengineering, there is often a significant reduction in middle management.

The horizontal organization has often been called anti-organization because it seeks to remove the constraints imposed by a conventional structure.

The potential future for international companies' organizational structures is focus on corebusiness activities, downsized headquarters organization, greater use of the dynamic networkstructure.