Chapter 7 Marketing Organization, Implementation, and Control

1. 0 Chapter 7 Marketing Organization, Implementation, and Control

2. Organizational Structure 0 • The basic functions of an organization are to provide: • The types of structures that companies use to manage foreign activities are divided into three categories.

3. Organizational Structure 0 • Little or no formal organization • Ranges from domestic operations handling an occasional international transaction on an ad hoc basis to separate export departments. • Transactions are conducted on a case-by-case basis either by the resident expert or with the help of facilitating agents.

4. Organizational Structure 0 • International division • Centralizes in one entity the total responsibility for international activity.

5. Organizational Structure 0 • International division • Best serves firms with few products that do not vary significantly in terms of their environmental sensitivity, and when international sales and profits are still quite insignificant compared with those of the domestic divisions.

6. Organizational Structure 0 • The five basic types of global structures:

7. Organizational Structure 0 • Product structure • Gives worldwide responsibility to business units for marketing of their product lines. • Provides the ability to balance the functional inputs needed by a product and to react quickly to product-specific problems in the marketplace.

8. Organizational Structure 0 • Area structure • Is organized on the basis of geographical area. • Is suited if market conditions with respect to product acceptance and operating conditions vary dramatically.

9. Organizational Structure 0 • Functional structure • Emphasizes the basic tasks of the firm. • A variation of this approach is the use of process as a basis for structure. • Customer structure -

10. Organizational Structure 0 • Mixed structure • Combines two or more organizational dimensions simultaneously. • In the long term, coordination and control across such structures become tedious.

11. Organizational Structure 0 • Matrix structure • The matrices used vary according to the number of dimensions needed. • Complex issues are forced into a two-dimensional decision framework; even minor issues may have to be resolved through committee discussion.

12. Exhibit 7.7: Evolution of International Structures 0

13. Implementation 0 • Locus of decision making • Decentralization - • Centralization - • Coordinated decentralization -

14. Exhibit 7.8 - Levels of Coordination 0

15. Implementation 0 • Factors affecting structure and decision making • Degree of involvement in international operations. • Size and importance of the markets. • Firm’s country of origin and the political history of the area.

16. Implementation 0 • The networked global organization • Companies that have adopted the approach have incorporated the following three dimensions into their organizations:

17. Implementation 0 • The networked global organization • Avoids the problems of duplication of effort, inefficiency, and resistance to ideas developed elsewhere.

18. Implementation 0 • Promote internal cooperation • Use international teams or councils to share best practices.

19. Exhibit 7.10 - Roles for Country Organizations 0

20. Control 0 • Controls focus on actions to verify and correct actions that differ from established plans. • Within an organization, control serves as an integrating mechanism. • Controls are designed to:

21. Exhibit 7.11 - Comparison of Bureaucratic and Cultural Control Mechanisms 0

22. Control 0 • Bureaucratic/formalized control • The elements are an international budget and planning system, the functional reporting system, and policy manuals used to direct functional performance. • Budgets - • Plans -

23. Control 0 • Bureaucratic/formalized control • The budget system is used for four main purposes. • Planning and coordination of global production capacity and supplies. • Communication and information exchange among subsidiaries, product organizations, and corporate headquarters.

24. Control 0 • Cultural control • Require an extensive socialization process, and informal, personal interaction is central to the process.

25. Control 0 • Exercising control • The degree of control imposed will vary by subsidiary characteristics, including its location. • Factors to be kept in mind while designing a control system: