Chapter 15

Slide 2:ORGANIZATIONS ALIKE:

GLOBALIZATION AND CONVERGENCE

Slide 3:CONVERGENCE

The increasing similarity of management practices

Slide 4:EXHIBIT 15.1 The Effects of Globalization on the Convergence of Strategy and Structure

Slide 5:WHY CONVERGENCE?

Global customers and products Growing levels of industrialization and economic development Global competition and global trade

Slide 6:Why convergence? (continued)

Cross-border mergers, acquisitions, and alliances Cross-national mobility of managers Internationalization of business education

Slide 7:WHY DO MANAGEMENT PRACTICES DIFFER?

National context - includes national culture, the country�s available labor and other natural resources

Slide 9:COMPARATIVE STRATEGY FORMULATION:  EXAMPLES FROM AROUND THE WORLD

US model: used as basis for comparison represents the attempt of a rational decision making process

Slide 10:THE US MODEL OF STRATEGY FORMULATION

1-Define the business and its mission 2- Define objectives 3- Assess the company's situation: SWOT, competitors' actions 4- Craft strategy content

Slide 11:DEFINING THE BUSINES AND ITS MISSION

The mission statement tells the organizational members and outsiders what the company does and why it exists

Slide 12:US MISSION STATEMENTS

Often emphasize market issues closely related to key elements of success in their respective industries

Slide 13:FRENCH AND BRITISH MISSION STATEMENTS

British mission statements focus on strategic issues, emphasize shareholder returns French mission statements reflect a national context in a social democracy

Slide 15:DEFINING OBJECTIVES

National differences exist mostly in priorities financial or strategic

Slide 17:EXHIBIT 15.4 FINANCIAL AND STRATEGIC OBJECTIVES OF U.S., JAPANESE, AND BRITISH SUBSIDIARIES

Slide 18:ASSESSING THE COMPANY'S SITUATION

Management's assessment of the situation faced by their companies US managers favor techniques such as the SWOT and competitive analyses

Slide 19:GERMAN AND BRITISH EXAMPLES

Successful companies from both countries identified the same key success factors Differences: the organizational characteristics that managers believe achieve the key success factors

Slide 20:NATIONAL DIFFERENCES IN STRATEGY CONTENT: KEIRETSU 

Compete with a high ratio of products where the company can add value with knowledge Emphasize production to improve productivity Use the resources of networks

Slide 21:COMPARATIVE ORGANIZATION DESIGN

Multinational managers must deal with organizations from different societies Each society provides a unique national context for the design of organizations

Slide 22:BASIC CONCEPTS IN COMPARATIVE ORGANIZATIONAL DESIGN

Vertical differentiation Horizontal differentiation Span of control Integration Standardization

Slide 23:Formalization Mutual adjustment

Basic concepts in comparative organizational design, continued

Slide 24:EXHIBIT 15.6 PREFERRED ORGANIZATIONAL HIERARCHIES

Slide 25:CONTROL MECHANISMS

Link the organization vertically Five broad types of control: personal output bureaucratic decision making cultural

Slide 26:NATIONAL CULTURE AND ORGANIZATIONS

Hofstede: power distance and uncertainty avoidance the most important influence basic problems of organizational design--differentiation and integration See Exhibit 15.7 next

Slide 28:ADHOCRACY

Low power distance + low uncertainty avoidance = adhocracy Fits cultures where people can tolerate ambiguity and have less need for formalized rules and regulations

Slide 29:THE ADHOCRACY DESIGN

Vertical and horizontal differentiation: fewer levels and wider span of control Control mechanisms: mutual adjustment Decision making: Participative or consultative

Slide 30:PROFESSIONAL BUREAUCRACY

Small power distance + high uncertainty avoidance norms = professional bureaucracy

Slide 31:THE PROFESSIONAL BUREAUCRACY DESIGN

Vertical and horizontal differentiation: moderate levels Control mechanisms: standardization of skills. Decision making: centralized decision making

Slide 32:FULL BUREAUCRACY

High power distance + high uncertainty avoidance = full bureaucracy Full bureaucracy is the most formalized of the Hofstede organization types

Slide 33:FULL BUREAUCRACY DESIGN

Vertical and horizontal differentiation: Tall pyramids and narrow spans of control Control mechanisms: Standardization and a high degree of formalized rules Decision making: Highly centralized

Slide 34:FAMILY BUREAUCRACY

Occurs in countries with large power distance norms and low uncertainty avoidance norms. It most parallels an extended family with a dominant patriarch or father figure.

Slide 35:FAMILY BUREAUCRACY DESIGN

Vertical and horizontal differentiation: small and low specialization Control and coordination mechanisms: direct contact Decision making: highly centralized See key relationships in Exhibit 15.9 next

Slide 37:THE JAPANESE CONSENSUS BUREAUCRACY: A SPECIAL CASE?

Should favor the full bureaucracy Unique style of group orientation = consensus bureaucracy

Slide 38:JAPANESE CONSENSUS BUREAUCRACY DESIGN

Vertical differentiation: little job specialization for individuals Control mechanisms: favor cultural control over bureaucratic control Decision making: consensual - see Exhibit 15.10 next

Slide 40:SOCIAL INSTITUTIONS ANDTHE KOREAN CHAEBOL

Slide 41:DISTINCT ORGANIZATIONAL FEATURES

Family-dominated and multi-industry conglomerates Extensive family control Paternalistic leadership Centralized planning - reports directly to the chairman Dominated much of Korean business

Slide 42:INSTITUTIONAL CHANGE AND THE CHAEBOL

Coercive isomorphism - government support fostered the growth of the Korean chaebol Close relationships with banks for financing Protection by the government

Slide 43:Institutional change and the chaebol, continued

Recent government policies reduced support breaking networks allowed to fail

Slide 44:CONCLUSIONS

Understanding different approaches to strategy and organization design: helps to deal with international competitors helps a company become better collaborators facilitates local operations

Slide 45:Conclusions, continued

Pressures for convergence National cultural and social institutional lead to differences