Global Marketing Management A European Perspective

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Global MarketingManagementA European Perspective
GLOBAL ORGANISATIONAL STRUCTURES

• Warren J. Keegan
• Bodo B. Schlegelmilch

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Overview

• Organisation
• Organisational Networking and Virtual
  Organisations
• Summary

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Learning Objectives

• Learn how organisational structures need to
  respond to differences in global market
  environments
• Know the relationship between structure, foreign
  product diversification and size
• Realise that outsourcing becomes very important
  because corporations seek to leverage their
  value-chain strengths
• Recognise the importance of core competencies
  within organisational networks

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Organisation I

• The goal in organising for global marketing is to
  find a structure that enables the company to
  respond to relevant market environment
  differences
• Pull between
• the value of centralised knowledge and
  co-ordination
• the need for individualised response to the local
  situation

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Organisation II

• No single correct organisational structure
• Leading-edge global competitors corporate
  structure is simple and flat, rather than tall
  and complex
• Simple structures
• increase the speed and clarity of communication
• allow the concentration of organisational energy
  and valuable resources on learning, rather than
  on controlling, monitoring, and reporting

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Patterns of International Organisational
Development I
Functional Corporate Structure, Domestic
Corporate Staff Orientation, Pre-international
Division
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Patterns of International Organisational
Development II
Divisional Corporate Structure, Domestically
Oriented Product Division Staff,
Pre-international Division
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International Division Structure I
Functional Corporate Structure, Domestic
Corporate Staff Orientation, International
Division
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International Division Structure II
Divisional Corporate Structure, Domestically
Oriented Corporate Staff, Domestically Oriented
Product Divisions, International Division
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Regional Management Centres I
Functional Corporate Structure, Domestic
Corporate Staff Orientation, International
Division
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Regional Management Centres II
Divisional Corporate Structure, Domestically
Oriented Corporate Staff, International Division
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Geographic Structure
Geographic Corporate Structure, World Corporate
Staff Orientation, Area Divisions World-wide
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Global Product Division Structure
Geographic Corporate Structure, World Corporate
Staff Orientation, Product Divisions
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Matrix Structure I
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Matrix Structure II

• Four basic competencies
• Geographic knowledge
• Product knowledge and know-how
• Functional competence in such fields as finance,
  production, and especially marketing
• Knowledge of the customer or industry and its
  needs

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Relationship between Structure, Foreign Product
Diversification, Size
Source John M. Stopford and Louis T. Wells, Jr.,
Managing the Multinational Enterprise (New
York Basic Books, 1972) adapted by author.
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Core Competencies

• Core competencies
• must provide potential access to a wide variety
  of markets
• make a significant contribution to the perceived
  customer benefits of the end product
• be difficult for competitors to imitate
• become the resources and capabilities that give a
  company advantage over its rivals
• Popularised by global strategy experts C. K.
  Prahalad and Gary Hamel

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Outsourcing and Partnership

• Outsourcing has become increasingly popular as
  corporations seek to leverage their value-chain
  strengths
• Six determinants of partnership
• Mutual benefits
• Commitment
• Predisposition
• Shared knowledge
• Unique resources
• Linkage

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Organisational Networking and Horizontal
Organisation

• Organisational networking is a general strategy
  which sets a style and culture for an
  organisation
• it breaks down boundaries
• it enables quick and open person-to-person
  communications
• Horizontal organisation
• organised around cross-functional core processes
• tasks managers to take the responsibility for
  such processes in its entirety

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Virtual Organisations

• Virtual organisation
• a temporary network or loose coalition of
  manufacturing and administrative services
• assembled for a specific business purpose
• disassembled when the purpose has been met

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Virtual Organisations

• A virtual organisation makes use of virtual teams
• team membership in a virtual organisation is seen
  as dynamic and constantly changing
• role of team members may change from support in
  one team to leader in another
• a team of the same people only has a finite life
  span in which it can be truly productive

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Summary

• An organisational structure for global marketing
  should enable the company to respond to relevant
  differences in international market environments
  and and to extend valuable corporate knowledge
• Firms must establish core competencies to be
  competitive
• Global companies can respond to opportunities and
  threats in the global marketing environment by
  enabling organisational networking and virtual
  organisations