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INTRODUCTION. Multinational managers must deal with organizations from different societies Each society provides a unique national context for the design of organizations . KEY ISSUES IN COMPARATIVE ORGANIZATIONAL DESIGN. What makes organizations from different societies Alike? Different?.

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introduction
INTRODUCTION
  • Multinational managers must deal with organizations from different societies
  • Each society provides a unique national context for the design of organizations
key issues in comparative organizational design
KEY ISSUES IN COMPARATIVE ORGANIZATIONAL DESIGN
  • What makes organizations from different societies
    • Alike?
    • Different?
convergence
CONVERGENCE
  • The increasing similarity of management practices

WHY CONVERGENCE?

  • Growing similarity of customer needs
  • Growing levels of industrialization and economic development
  • Global competition and global trade
the culture free hypothesis
THE CULTURE FREE HYPOTHESIS
  • Regardless of national culture, organizational design depends to on the organizational context (size, technology)
social institutions
SOCIAL INSTITUTIONS
  • Encourage managers to develop structures and processes that match institutional requirements
  • Example: U.S. laws regarding monopolies prevent U.S. organizations developing large conglomerate structures
national and business culture
NATIONAL AND BUSINESS CULTURE
  • Pervasive and taken-for-granted aspects of culture influence preferences for certain designs
  • Most managers also design organizations purposefully to fit local cultural expectations
organizations alike and different summary observations
ORGANIZATIONS ALIKE AND DIFFERENT: SUMMARY OBSERVATIONS
  • Global trade/investment with its increasing contact among managers of all nationalities leads to convergence
  • Similar technology/size leads to similar structures, regardless of nationality
  • In spite of the trend toward convergence, extensive differences still exist among organizations from different countries.
control mechanisms
CONTROL MECHANISMS
  • Link the organization vertically
  • Five broad types of control:
    • personal
    • output
    • bureaucratic
    • decision making
    • cultural
national culture and organizations
NATIONAL CULTURE AND ORGANIZATIONS
  • Hofstede: power distance and uncertainty avoidance the most important
    • Influence basic problems of organizational design--differentiation and integration
adhocracy
ADHOCRACY
  • Low power distance + low uncertainty avoidance = adhocracy
  • Fits cultures where people can tolerate ambiguity and have less need for formalized rules and regulations
the adhocracy design
THE ADHOCRACY DESIGN
  • Vertical and horizontal differentiation: fewer levels and wider span of control
  • Control mechanisms: mutual adjustment
  • Decision making: Participative or consultative
professional bureaucracy
PROFESSIONAL BUREAUCRACY
  • Small power distance + high uncertainty avoidance norms = professional bureaucracy
the professional bureaucracy design
THE PROFESSIONAL BUREAUCRACY DESIGN
  • Vertical and horizontal differentiation: moderate levels
  • Control mechanisms: standardization of skills.
  • Decision making: centralized decision making
full bureaucracy
FULL BUREAUCRACY
  • High power distance + high uncertainty avoidance = full bureaucracy
  • Full bureaucracy is the most formalized of the Hofstede organization types
full bureaucracy design
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
family bureaucracy
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.
family bureaucracy design
FAMILY BUREAUCRACY DESIGN
  • Vertical and horizontal differentiation: small and low specialization
  • Control and coordination mechanisms: direct contact
  • Decision making: highly centralized
the japanese keiretsu
THE JAPANESE KEIRETSU
  • Web of trading partners
  • Financial networks revolve around major banks- e.g. Mitsubishi.
  • Production networks revolve around user and supplier relationships
institutional forces supporting keiretsu
INSTITUTIONAL FORCES SUPPORTING KEIRETSU:
  • Historic- zaibatsu
  • Close links between government and Japanese industry create coercive pressures
the korean chaebol
THE KOREAN CHAEBOL
  • Family-dominated and multi-industry conglomerates
  • Dominate much of Korean business
  • Close relationships with banks for financing
distinct organizational features of chaebol
DISTINCT ORGANIZATIONAL FEATURES OF CHAEBOL
  • Extensive family control
  • Paternalistic leadership
  • Centralized planning - reports directly to the chairman
  • Close connections with the government
institutional pressures supporting chaebol
INSTITUTIONAL PRESSURES SUPPORTING CHAEBOL
  • Coercive isomorphism - government support dominated the founding and growth of the Korean chaebol
  • Recent government policies
the modern putting out organization in italy s modena region
THE MODERN PUTTING-OUT ORGANIZATION IN ITALY'S MODENA REGION
  • Manufacturer "puts-out" raw material to independent companies
  • Companies assemble the goods, usually in homes
  • Manufacturer then retrieves the assembled goods
institutional support
INSTITUTIONAL SUPPORT
  • Economists consider the system archaic but it thrives - why?
  • Supported by legal and political institutions
  • State-subsidized loans to $100,000
  • Freedom from some labor and social security laws
institutions and design summary observations
INSTITUTIONS AND DESIGN: SUMMARY OBSERVATIONS
  • The Italian example: institutional support networks of small family-owned companies
  • The Japanese keiretsu/Korean chaebol: state provides a coercive environment