2. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–2 1.Discuss the concept of stateless corporations. 2.Describe the importance of organizational structures for global businesses. 3.Discuss the role that export departments and international divisions play in the organization of global businesses. 4.Define functional, divisional, hybrid, and matrix structures, and illustrate their advantages and disadvantages for global business.

3. The Stateless Corporation Stateless Corporation – A new phase in the evolution of the multinational corporation, where work is sourced wherever it is most efficient and the corporation transcends nationality altogether Is a stateless corporation an realistic possibility? – To which government or international organization could a stateless corporation properly appeal for assistance if its assets are expropriated by a particular country? © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–3

4. Evolution of the Stateless Corporation Stage 1 Global companies produce goods in one country and export them to other countries. Stage 2 Global businesses establish foreign subsidiaries to handle exports from their home countries. Stage 3 Global firms set up operations in other countries. Stage 4 Stateless corporations locate their core corporate functions and top executives in different countries to achieve competitive advantage via access to talent, capital, low costs, or proximity to their most important customers. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–4

5. Organizing Global Business Organization – A tool that people use to coordinate their actions to obtain something they seek or value Organizational Structure – The formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals Division – A business subunit that consists of a collection of functions or departments that share responsibility for producing a particular product or service © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–5

6. Purposes of Organizational Structure It allows for activities based upon a division of labor by departmentalization, standardization, and specialization of functions and tasks. It facilitates coordination and integration of activities through hierarchical supervision, formal rules and procedures, and training and socialization. It sets the organization’s boundaries and regulates its contacts with its environment and with other organizations. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–6

7. Becoming Globalized: Export Departments and International Divisions Creating an Export Department Why Develop an International Division? – To concentrate all international efforts and expertise in one location – To signal to international customers their importance to the company – To foster a global mindset in those who work within the division – To facilitates designing products that cater to local tastes of overseas cultures © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–7

8. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–8 EXHIBIT 10.1 AN ORGANIZATIONAL STRUCTURE WITH AN EXPORT DEPARTMENT UNDER SALES

9. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–9 EXHIBIT 10.2 AN ORGANIZATIONAL STRUCTURE WITH AN INTERNATIONAL DIVISION

10. Potential Conflicts Between Domestic and International Operations © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–10 Drawbacks of separating domestic and international operations Lack of communication and coordination in: – Designing products with both domestic and international appeal – Sharing of core competencies and knowledge – Capturing learning-curve savings from consolidating production in manufacturing plants around the world.

11. Organizational Structures for Global Business Groups people together who hold similar positions, perform similar tasks, or use the same kinds of skills Functional Structure Groups functions together to serve the needs of products, markets, or geographical regions Divisional Structure A combination of different organizational structures Hybrid Structure Groups people simultaneously by function and by division Matrix Structure © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–11

12. Divisional Structures for Global Business Groups products into divisions according to their similarities or differences Product Structure Groups products into divisions according to the needs of different customers Market Structure Groups products into divisions according to the needs of the different geographical regions the firm serves Geographical Structure © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–12

13. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–13 EXHIBIT 10.3 THE ORGANIZATIONAL STRUCTURE OF WAL-MART

14. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–14 EXHIBIT 10.4 A FUNCTIONAL ORGANIZATIONAL STRUCTURE FOR A GLOBAL BUSINESS

15. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–15 EXHIBIT 10.5 THE ORGANIZATIONAL STRUCTURE OF BOEING COMMERCIAL AIRPLANES

16. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–16 EXHIBIT 10.6 A DIVISIONAL STRUCTURE FOR A GLOBAL BUSINESS WITH THREE DIVISIONS

17. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–17 EXHIBIT 10.7 A PRODUCT STRUCTURE FOR A GLOBAL BUSINESS WITH FOUR PRODUCT DIVISIONS

18. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–18 EXHIBIT 10.8 A MARKET STRUCTURE FOR A GLOBAL BUSINESS WITH THREE MARKET DIVISIONS

19. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–19 EXHIBIT 10.9 A GEOGRAPHICAL REGION STRUCTURE FOR A GLOBAL BUSINESS WITH THREE DIVISIONS

20. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–20 EXHIBIT 10.10 A GLOBAL BUSINESS WITH A HYBRID STRUCTURE

21. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–21 EXHIBIT 10.11 A GLOBAL BUSINESS WITH A MATRIX STRUCTURE A basic problem of the matrix structure is determining the responsibility and authority relationships between the functional and divisional managers.

22. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–22 EXHIBIT 10.12 THE FORMAL STRUCTURE OF SHELL

23. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–23 EXHIBIT 10.13 THE SHELL MATRIX

24. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.10–24 KEY TERMS stateless corporation organization organizational structure division functional structure divisional structure product structure market structure geographical region structure hybrid structure matrix structure