In international business companies always have to take care about fast changing markets and customer needs. To be able to cope with these requirements the necessity of a perfect fitting organisational framework is
given.
Organisational strategy is one step to prepare a company for these needs. It allows the managers to prepare for different cases regarding product and globalisation issues.
Another important point is the choice of the organizational architecture. It supports the strategy of the organisation with different approaches. Structure, incentive and control systems, processes, culture, and people are the main areas of the organisational architecture. The right combination
of these factors helps to support the business success.
A lot of cultures developed their own successful organization types. They implement typical cultural elements of a certain region and combine it with their business activities. It helps to improve the business activities and become effective global players.
The topics mentioned above will be illustrated in the following chapters. They provide an overview of the main elements of organisation strategy and organisation architecture as well as some culture specific forms.
Table of Contents
1 Introduction
2 Organisation strategies
2.1 Multidomestic companies
2.2 International companies
2.3 Global companies
2.4 Transnational companies
3 Organisational Architecture
3.1 Organisational Structure
3.2 Control systems and incentives
3.3 Processes
3.4 Organisational Culture
4 Combining Strategy and Architecture in Organisations
5 Organisation in culture
5.1 Kereitsu
5.2 Chaebol
5.3 Family Business networks
5.4 Kibbutz
6 Conclusion
7 References
Objectives and Themes
The primary objective of this work is to explore how multinational companies can align their organisational architecture with their chosen strategy to remain successful in fast-changing international markets. The research focuses on the interdependency between strategic orientation and internal structural frameworks, while also considering the impact of cultural specificities on organizational forms.
- Strategic frameworks for international business (Multidomestic, International, Global, Transnational)
- Components of organisational architecture (Structure, Processes, Culture, Control Systems)
- The alignment of strategy and architecture in multinational corporations
- Analysis of culture-specific organization types (Keiretsu, Chaebol, Family Business, Kibbutz)
Excerpt from the Book
2.1 Multidomestic companies
Differences in consumer preferences, protectionism, high tariffs and logistical barriers between the two world wars were the beginning of the multidomestic companies. They can be described as a decentralised loose federation of a headquarters with subsidiaries in different countries or areas of the world. These subsidiaries are relatively independent and work like small companies on their own, without any strategic direction from their headquarters just focusing on their area. Strategic and operational decisions are just made by subsidiaries with their own national responsibilities. The connection to the headquarters is more or less just a flow of money. That means the headquarters provide the money e.g. to build up a manufacturing line and the earned money flows back to the headquarters as dividends.
Purpose of this decentralised concept is to give the local mangers the possibility of focussing more on the national or local markets and not to be limited on the company’s main strategy. Today the multidomestic strategy is very often used in the food industry because that allows companies to respond to consumer (and cultural) preferences on a certain market.
Summary of Chapters
1 Introduction: Provides an overview of the challenges in international business and the necessity of aligning organisational strategy with architecture.
2 Organisation strategies: Explains the four main strategic archetypes (Multidomestic, International, Global, Transnational) and their historical evolution.
3 Organisational Architecture: Details the core components of an organisation, including structure, control systems, processes, and culture.
4 Combining Strategy and Architecture in Organisations: Analyzes how the components of organisational architecture must be adapted to support different international strategies.
5 Organisation in culture: Examines how regional and cultural backgrounds influence specific organizational forms such as Keiretsu or Chaebols.
6 Conclusion: Summarizes that successful global operation requires a fit between business activities and organizational architecture.
Key Keywords
Organisation Design, International Business, Strategy, Organisational Architecture, Multidomestic, Transnational, Globalisation, Corporate Culture, Performance Ambiguity, Keiretsu, Chaebol, Subsidiaries, Coordination, Control Systems, Decentralisation
Frequently Asked Questions
What is the core focus of this work?
The work focuses on the intersection of organizational strategy and organizational architecture within the context of international business.
What are the primary strategic archetypes discussed?
The text analyzes four main strategies: Multidomestic, International, Global, and Transnational companies.
What is the ultimate goal of the proposed framework?
The goal is to provide a guide for companies to achieve high performance by ensuring that their internal structure and strategy are mutually consistent.
Which scientific method is used to illustrate these concepts?
The analysis utilizes existing literature and theoretical models—such as the Stopford and Wells model and the Bartlett and Ghoshal concepts—to map the relationship between strategy and structure.
What is covered in the main body regarding internal organization?
The main body covers organizational structure, control systems and incentives, processes, and the impact of organizational culture.
How are cultural aspects integrated into the study?
The work examines specific cultural business forms like the Japanese Keiretsu and Korean Chaebols to demonstrate how regional culture shapes organizational structure.
What does the term "performance ambiguity" mean in this context?
It refers to the difficulty in determining the cause of unsatisfactory sub-unit performance, which increases with the level of international integration.
How do Transnational companies differ from Global companies?
Transnational companies utilize complex integrated networks with shared decision-making, whereas Global companies tend to be more centralized with production hubs focused on scale effects.
Why are informal integrating mechanisms important for Transnational structures?
Because these structures are highly complex and interdependent, formal structures alone are often insufficient to manage the necessary knowledge exchange between units.
What makes the Kibbutz model unique as an organization?
The Kibbutz is an Israeli community-based model where ownership and leadership are shared among the community members, prioritizing collective needs over private profit.
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- Christian Zimmerer (Autor:in), Christoph Stockert (Autor:in), 2010, Organisation Design in International Business, München, GRIN Verlag, https://www.grin.com/document/184777
