Strategy

Strategic Process and Organisation © Charles Schell http://www.finance-MBA.com Session Objectives discuss the organisational challenges which internationals establishment define and contrast sanctioned forms of organisational construction review forms of multinational organisation discuss mechanisms for communications and control discuss leaders and the role of top management 2 © Charles Schell 2002 Agenda challenges to the evolving global business features of basic forms of organisational structure managing the multinational structure for synergy and control picture: Chris Bartlett discuss Percy Barnevik and ABB video: Thomas Gasser 3 © Charles Schell 2002 Global organisational structure issues where are closes made? seek and development production merchandising capital budgeting and finance how are results compared? centralise-decentralise? 4 © Charles Schell 2002 Vertical Differentiation Concerned with where decisions are made. Where is decision making power concentrated? Two Approaches Centralization Decentralization 5 © Charles Schell 2002 Centralization Advantages alleviate coordination. Consistency of decisions. Easier to make changes. Avoids duplication.

Disadvantages Overburdened top management. Motivational research favors decentralization. Decentralization permits flexibility. Decentralization lets decisions be made closer to the discipline source. Decentralization can increase control. 6 © Charles Schell 2002 Strategy and Centralization Global outline - centralization. Multi-domestic firms - decentralization. International firms - centralize for core competencies (R&D) and decentralize for operating decisions. transnational - use both. 7 © Charles Schell 2002 Vertical Differentiation Decentralization Top is over-burdened and makes poor decisions. change magnitude motivation at lower levels. Greater flexibility. Better on-the-spot(prenominal) decisions.... If you want to get a full essay, order it on our website: Orderessay

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