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Organization of the multinational firm. Hedl Maria Eschbacher Claudia. Agenda. Organizational structures (Perlmutter) Ethnocentrism Polycentrism Geocentrism Stages of international development (Daft) Matrix structure vs. Heterarchy (Hedlund)

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Organization of the multinational firm

Organization of the multinational firm

Hedl MariaEschbacher Claudia


Agenda
Agenda

  • Organizational structures (Perlmutter)

    • Ethnocentrism

    • Polycentrism

    • Geocentrism

  • Stages of international development (Daft)

    • Matrix structure vs. Heterarchy (Hedlund)

  • The home based MNC (Porter, Sölvell, Zander)


Organizational structures perlmutter
Organizational structures (Perlmutter)

  • Ethnocentrism


Organizational structures perlmutter1
Organizational structures (Perlmutter)

  • Polycentrism


Organizational structures perlmutter2
Organizational structures (Perlmutter)

  • Geocentrism


Difficulties of geocentric mncs
Difficulties of geocentric MNCs

  • Differences between nations and regions

  • Cultural differences

  • Size

  • Skilled managers

  • Specialization of subsidiaries

  • No adaption to local markets


Stages of international development daft
Stages of international development (Daft)

  • Domestic stage

  • International stage

  • Multinational stage

  • Global stage


Model for global vs local opportunities
Model for global vs. local opportunities

Globalization strategy means that product design and advertising strategy are standardized throughout the world.

Multidomestic strategy means that competition in each country is handled independently of competition in other countries.


Model for global vs local opportunities1
Model for global vs. local opportunities

GlobalProduct Structure

Heterarchy

Global Matrix Structure

Development of Globalization Strategy

International Division

GlobalGeographic Structure

Development of Multidomestic Strategy





Global matrix structure
Global Matrix Structure

International Excecutive Committee

Country Managers

Business

Sectors

Local Companies


Global heterarchy hedlund
Global Heterarchy (Hedlund)

  • large transnational firms

  • whole world as their playing field

  • no single country base

  • local and global advantages

  • complex multidimensional structure


Global heterarchy hedlund1
Global Heterarchy (Hedlund)

  • Differences from Matrix Structure

    • Many centres

    • Stratic role for MNC of subsidiary managers

    • Different kinds of centres

    • Coordination through corporate culture


Global heterarchy hedlund2
Global Heterarchy (Hedlund)

  • Differences from Matrix Structure

    • Degree of coupling between units

    • Holographic organization

    • „firm as a brain“ rather than „brain of the firm“

    • Coalitions

    • Managers have authority


The home based mnc s lvell zander porter
The home based MNC(Sölvell, Zander, Porter)

  • 4 Diamonds

    • Factor endowments

    • Demand conditions

    • Relating and supporting industries

    • Firm strategy, structure and rivalry

       supplies to regions or nations rather than the international environment


The home based mnc s lvell zander porter1
The home based MNC(Sölvell, Zander, Porter)

The home base is best understood as a limited geographical area, where a firm has a cluster of core functions including strategic decision making, research development and often some form of core manufacturing.


The home based mnc s lvell zander porter2
The home based MNC(Sölvell, Zander, Porter)

  • Simple home-based MNC

    • Selective tapping

  • Multi-home-based MNC

    • Separate bases for individual lines of business


Case study
Case Study

1819Founding by Alois Miesbach on the Wienerberg in Vienna

1869Trading starts on the Vienna Stock Exchange

1986Start of internationalization and expansion (Germany)

1990

Start of expansion in Eastern Europe

1999

Advance to Global Player


Case study1
Case Study

  • 235 plants in 24 countries

  • Profit after tax € 155,5 million

  • Brands & Products:

    • POROTHERM - Bricks

    • TERCA - Facing bricks

    • KORAMIC - Roof tiles

    • SEMMELROCK - Pavers

    • BRAMAC & TONDACH GLEINSTÄTTEN - Roof

    • PIPELIFE - Pipes

    • Wienerberger Ofenkachel



Structure and organization1
Structure and Organization

  • Mature product lines in core business

  • Not all products in all countries

  • Stable technologies

  • Diveded into regions

  • Regions report to managing board

  • Each region full control over activities

     Geographic division structure



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