ATHENA LEILA S.

BORDAN BSBA MM3A

1. Describe the organizational architecture that a transnational firm might adopt to reduce
the costs of control.
- A global firm can apply bureaucracy and output restrictions to some level, much as
all multinational corporations. Due to performance issues, output controls are only
occasionally used. In situations when there are several levels of authority,
bureaucratic controls are less effective. Offering rewards for cooperation is one
approach to solving this complex problem. An additional is the creation of a powerful
culture. By encouraging managers to adopt high performance-related norms and value
systems, this culture may promote cooperation. A similar culture would encourage
managers from interdependent sub-units to seek solutions to any issues that might
develop between them. Lessening the expense of control would result from a strong,
success-focused
2. What is the most appropriate organizational architecture for a firm that is competing in an
industry where a global strategy is most appropriate?
- When a global strategy is necessary, a business feels that the entire world is its market
and that it can achieve economies of scale by creating and manufacturing a
standardized product. Moderate decentralization and global product divisions would
be an appropriate organizational structure. Since working on enterprises globally
requires a lot of effort and investment, a strong culture, a lot of coordination, and
various integrating mechanisms are all necessary for the global strategy to be
effective. Decentralizing tasks to lower or other subunits not only reduces the time it
takes for the top management to make informed decisions, but it can also reduce their
obligations and let them concentrate on the more pressing issues at hand.