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Strategy, Structure, and Control of Multinational Enterprises in International Business Environments

Business economics - Business Management, Corporate Governance


Author

Atilla Kibar
5 Texts

Excerpt

Category
Termpaper
Institution / College
Grade
74 / A (Excellent)

Leeds Metropolitan University
International Business
Individual Assignment
Strategy, Structure, and Control of
Multinational Enterprises in International
Business Environments.
Student:
80
2.01.2007
Word Count:
3715
I
Table of Content
List of Figures ... II
1 Introduction ... 1
1.1 Context ... 1
1.2 Focus ... 1
1.3 Globalisation ... 2
2 Environment ... 3
2.1 Internal
Environment... 4
2.1.1 S.W.O.T.-Analysis ... 4
2.2 External
Environment ... 4
2.2.1 P.E.S.T.-Analysis ... 4
2.2.2
Porter's Five Forces ... 5
3 Strategy... 7
3.1 International
Strategy ... 7
3.2 Global
Strategy... 8
3.3 Multidomestic
Strategy ... 9
3.4 Transnational
Strategy... 10
4 Decision
Making ... 11
5 Organisational
Structures ... 13
5.1
Functional and Divisional Structures ... 13
5.1.1
International Division Structure ... 14
5.1.2
Area or Geographic Structure ... 15
5.1.3
Global Product Structure... 16
5.1.4
Global Functional Organization ... 17
5.1.5 Matrix
Structure ... 18
6
Coordination and Control Systems ... 20
6.1 Control
Mechanisms ... 21
7 Case
Study... 22
7.1 Case:
Nestlé... 22
7.2
Case: Johnson & Johnson... 23
8 Conclusion... 25
Bibliography... 26
II
List of Figures
Figure 1-1: World FDI stock 1980-2002... 1
Figure 2-1: Strategic Planning... 3
Figure 2-2: PEST-Analyses... 5
Figure 2-3: Five Forces ... 6
Figure 3-1: International Strategy ... 8
Figure 3-2: Global Strategy... 9
Figure 3-3: Multidomestic Strategy ... 10
Figure 3-4: Transnational Strategy... 11
Figure 4-1: Centralization v. Decentralization... 12
Figure 5-1: International Division Structure ... 14
Figure 5-2: Area or Geographic Structure... 15
Figure 5-3: Global Product Structure ... 16
Figure 5-4: Global Functional Structure ... 17
Figure 5-5: Matrix Structure ... 18
1
1 Introduction
1.1 Context
In the last 25 years of the twentieth century companies faced strong competition caused by
technological revolutions, changing of product designs and manufacturing processes. Figure 1
indicates that FDI stock increased dramatically over the last decades. This implicates that
multinational enterprises (MNEs) increasingly engage in international operations in order to
create competitive advantages. Also governments are removing international restrictions and
try to establish a common market by approximating the economic policies especially in the
European Union.
Figure 1-1: World FDI stock 1980-2002
(Source : http://www.unctad.org)
1.2 Focus
This report focuses on the environment in which MNEs operate which determines the control
strategies. After explaining these strategies this report will investigate organisational
World FDI stock 1980-2002
0
2.000.000
4.000.000
6.000.000
8.000.000
1980
1985
1990
1995
2000
2002
in
m
ill
io
n
U
S
Inward FDI stock
Outward FDI stock
2
structures and control mechanisms which enables companies to coordinate and control their
activities. In the last part the report will describe in a case study the strategies and structures
of two "global players": Nestle and Johnson & Johnson.
1.3 Globalisation
Nowadays the increasing "globalisation" forces companies to compete on global markets. The
aim of most enterprises is to make profits. Nationally focused companies that were not able
to access foreign markets quickly enough were forced to act under increasing pressure
threatening loss of market share or even acquisitions. The drivers of globalisation have
created for several companies competitive advantages, like economies of scale, technological
improvements, transferable marketing, global distribution channels and greater networking
(Wright, Burns, 1998). However, operating abroad causes coordination, integration, and
control problems. To survive in a steady changing environment companies have to adopt
appropriate strategies and adequate operational structures and match them to a coherent
configuration (Stewart, 2006 /07).
3
2 Environment
Every company operates in a continuously changing environment. There are macro-
environmental forces which affects a company's business. In other words a firm which enters
foreign markets is not only facing opportunities but also threatening certain risks. Therefore
experienced managers are required to view all factors, particularly the determinants of control
strategies and scan the surrounding environment of a firm's business, before suggesting a
suitable strategy.
Figure 2-1: Strategic Planning
Excerpt: 7 of 31 pages -  scroll top


Description

Title:
Strategy, Structure, and Control of Multinational Enterprises in International Business Environments
Event:
International Business
Author:
Atilla Kibar
Year:
2006
Pages:
31
Archive No.:
V90733
ISBN (eBook):
978-3-638-04852-1
DOI:
10.3239/9783638048521
File size:
837 KB
Language:
English

Notes:
Double spaced.
Tags:
Strategy Structure Control Multinational Enterprises International Business Environments

Quote paper:

Atilla Kibar, 2006, Strategy, Structure, and Control of Multinational Enterprises in International Business Environments, Munich, GRIN Publishing GmbH

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