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Exhibit 7.12: Multinational Strategy, Structure, and Evolution

Exhibit 7.12: Multinational Strategy, Structure, and Evolution

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Control Systems

•• Control

Control system:

system: helps

helps link

link the

the organization

organization vertically,

vertically,

up

up and

and down

down the

the organizational

organizational hierarchy

hierarchy

•• Basic

Basic functions

functions ofof control

control system

system

•• Measure

Measure or

or monitor

monitor the

the performances

performances ofof subunits

subunits

•• Provide

Provide feedback

feedback toto subunit

subunit managers

managers regarding

regarding the

the

effectiveness

effectiveness ofof their

their units

units



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Coordination Systems

•• Coordination

Coordination system:

system: horizontal

horizontal organizational

organizational links

links

•• Provide

Provide information

information flows

flows among

among subsidiaries

subsidiaries



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Options for Control Systems

•• Four

Four types

types ofof control

control systems

systems

•• Output

Output control

control system

system

•• Bureaucratic

Bureaucratic control

control system

system

Decision-making

Decision-making control

control

Cultural

Cultural control

control system

system



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Output Control Systems

•• Assesses

Assesses the

the performance

performance ofof aa unit

unit based

based on

on results,

results,

not

not on

on the

the processes

processes used

used toto achieve

achieve these

these results

results

•• Profit

Profit center:

center: unit

unit controlled

controlled by

by its

its profit

profit or

or loss

loss

performance

performance



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Bureaucratic control system

Focuses

Focuses on

on managing

managing behaviors

behaviors within

within the

the

organization

organization

•• Budgets:

Budgets: financial

financial targets

targets for

for expenditures

expenditures

•• Statistical

Statistical reports:

reports: information

information toto top

top management

management

about

about nonfinancial

nonfinancial outcomes

outcomes

•• Standard

Standard operating

operating procedures:

procedures: rules

rules and

and

regulations

regulations ofof appropriate

appropriate behavior

behavior

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Control and Coordination

Systems

•• Decision-making

Decision-making control:

control: level

level inin the

the organizational

organizational

hierarchy

hierarchy where

where managers

managers have

have the

the authority

authority toto make

make

decisions

decisions

•• Cultural

Cultural control

control system:

system: uses

uses organizational

organizational culture

culture toto

control

control behaviors

behaviors and

and attitudes

attitudes ofof employees

employees



Copyright© 2005 South-Western/Thomson Learning All rights reserved



Exhibit 7.13: Use of Control

Mechanisms in Multinational

Organizational Structures



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Design Options for

Coordination Systems

••

••

••



Textual

Textual communication:

communication: e-mail,

e-mail, memos,

memos, and

and reports

reports

Direct

Direct contact:

contact: face-to-face

face-to-face interaction

interaction ofof employees

employees

Liaison

Liaison roles:

roles: part

part ofof aa person’s

person’s job

job inin one

one department

department

toto communicate

communicate with

with people

people inin another

another department

department



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Exhibit 7.12: Multinational Strategy, Structure, and Evolution

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