

Member
The Relationship Among
International Environment,
Competitive Strategy, and
Organizational Structure
Business Management International
Business Department
 Explain why the design of

01 organizational structure is
important to international
companies !
 Organization by Function
Organization by function is firms that organize their global activities by functions (Production, Finance,
Marketing, Personnel, Research and Development, and Public Relations) and characteristic that needs to be
running.

President

01 Vice President
Product
Vice President
Marketing
Vice President
Finance

Dispresed
Manufacturing Sales Office Financial
Plants Foreign Foreign and Office Foreign
and Domestics Domestics and Domestics
 Organization by Product
As shown in Figure depicts a product – oriented organization. The rationale behind product organization is
because of the increase products that are becoming obsolete, therefore companies must improve current
product design and find new products and processes to stay ahead of the competition
President

01
Area Specialist
Latin America
Corporate satff (Production,
North America Marketing, Finance
Middle East Africa Research, Personnel,
planning
Europa
Far East

Product Group Product Group Product Group Product Group

Executive Executive Executive Executive
 Organization by Geographical Area (Regional structure)
This structure groups employees and the activities carried out in the same location or area. Used when there
are differences need for goods or services in different locations, such as in several regions in a country.
Geographical organizational structures are generally chosen only by companies that produce consumer
goods, which depend on technology that is stable and well-known but requires large marketing capabilities.

President

01 Vice President
North America
Product Manager

Vice President
Latin America
Vice President
Europa (London)
Corporate staff
(productionm marketing
finance, research
planning, personal

Vice President
Middle
East/Africa
Vice President
Far East
(Montreal) (Sao Paolo) (Hongkong)
(Cairo)

Treasure Comptroller Marketing Production

 Organization by Combination (Matrix)
Matrix organizational structure is a combination of the advantages of product organization, geographical,
and functional into a harmonious unity without sacrificing clear lines of authority. Companies that support
matrix organization forms are said to have a geocentric management philosophy.

01
Top Leadership

Matrix Matrix
Management Management

Two-Boss
Manager
Explain why the organizational dimension that
must be consider when selecting organizational
structure ?

a. The first aspect that must being the priority are the
division of job tasks, functions, and the
responsibilities
b. The second aspect is whether they are able to do the
job or have a good competence to do their job.
c. The third aspect is whether there is a balance between
the authority in doing a task and the ability to do it.
02
The company can choose the right structure by
considering organization dimension, the
consideration are :
1. Standard
2. Administrative component
3. Control range
4. Specialization
5. Centralization
6. Delegation of authority
7. Integration 02
 Discuss the statement “ the various organizational forms
available for structuring international companies ?

In our opinion the various organizational forms

available for structuring international companies is
important to manage it, because every organization form
has it own function. Organization structure are classified
depend on their function and need in organization. And the
point is structuring companies is depend on company’s

03
need. Beside of that structure organization goals is great for
company sustainability.
 So we agree that international company have various
03
structure in managing company the reason is
organizational structures can help companies streamline
business operations. Business owners, director and
manager usually are responsible for organizing business
functions into departments that can complete various
business processes.
 Decisions are made where they are among parent and
subsidiary units of an international company !

04
Company usually have different
organizational structure (in other words, power
structures) that prescribe decision rights. In some
companies, decision rights are centered on top
managers (such as CEOs) who maintain control of
almost all important decisions.
 Most financial decision making is centralized, for financial
decisions generally have an immediate impact on the entire company
and are extremely difficult to reverse.
As well, the expensive R&D projects are usually centralized. Most

04 Multinational Corporation resist decentralizing their R&D activities.

(For example, IBM pulled out of India and Mexico when their
governments insisted on setting up R&D facilities in their countries).

Decision making about production, marketing, and logistics,

on the other hand, is usually decentralized, because problems in such
areas require immediate solutions. The need to wait for headquarters
to make or approve these types of decisions can severely and
unnecessarily constrain managerial effectiveness.
05 Discuss how an IC can maintain control of
a join venture or of a company in which
the IC owns less than 50 percwnt of the
voting stock !

With less than 50 percent of the voting stock, or

even with no voting stock, an IC can still have control.
Some methods of maintaining control are a
management contract, control of the finances, control of
the technology, and putting people from the
international company in important executive positions.
 • Management Contract

05 Contract Management also helps with monitoring

supplier compliance, minimising business risk and
capitalising on newly-available innovations.

• Control of The Finance

In order for companies to keep the lights on and to grow, they need
adequate cash flow for payroll expenses, supplies, inventory, and
other operational expenses.

• Control of The Technology

It is very important for an organization to control its technology
strategically because when it is not well controlled, it might result
into a big loss in the organization.
05 • Putting people from the international company in
important executive positions
For controls to be effective, all operating units of an IC must provide
headquarters with timely, accurate and complete reports, including those
dealing with financial, technological, market opportunity, and political and
economic information.

“ An IC also must replacing fixed jobs with tasks performed by

evolving teams that also known as de-jobbing.
“