SOCI110 Module 13 - CONTEMPORARY TRENDS IN ORGANIZATION DESIGN

0.  OBJECTIVES

In this module you will learn:

1.  GLOBALIZATION FORCES

In the past few decades, the world has been affected by a trend of increasing globalization, manifested by a major increase in the importance of international trade.  (Dependence of a country on international trade is often measured as the value of imports (and/or exports) as a percent of Gross Domestic Product.)  Industrial societies differ in their dependence on foreign trade, as shown in the next exhibit.

Minicase: Kalahari Bushmen (Daft 7e p. 481). This text describes how the lifestyle and social organization of these nomadic hunters and gatherers of the Kalahari Desert of Southern Africa have been affected by globalization.

Forces of globalization are summarized in the next exhibit. The 3 main dimensions of globalization are

2. ATTRIBUTES OF ORGANIZATIONAL EXCELLENCE

Organizational features that have been proposed as means to achieve organizational excellence (what is it?) are summarized in the following exhibit.

3.  MODALITIES OF INTERNATIONAL INVOLVEMENT

1.  Stages of International Involvement

As an organization becomes more involved in international operations, it tends to go through a predictable sequence of stages.

2.  International Strategic Alliances

An organization can become involved in international operations by means of international strategic alliances, which allow reducing development costs and penetrating new markets.  Types of strategic alliances include Q - List two types of strategic alliances that an organization can form to get involved in international operations.  ____ , ____ .

Q - A strategic alliance in which a separate entity is created with two or more active firms as sponsors is a ____ ?

3.  Global Work Teams  (aka Transnational Teams)

A global work team is a team made up of multinational member organizations.  EX: Heineken's European Production Task Force with 13 members in 5 countries, with the goal of achieving global efficiencies.

International involvement may lead to cultural misunderstandings.

4.  STRUCTURES FOR GLOBAL OPERATIONS

Structures for global operations results from different degrees of tension between 2 strategies: Given the nature of their products, companies may have opportunities for a globalization strategy (products that lend themselves to worldwide standardization) and/or opportunities for a multidomestic strategy (products that can be differentiated and customized for different countries).  Cross-classifying organizations with respect to globalization and multidomestic opportunities available to them yields 4 types of international structure, plus 1 that corresponds to "off the chart" values of both dimensions.  The following exhibit is an important summary of the approach:

1.  International Division

2.  Global Product Division Structure

3.  Global Geographic Division Structure

Minicase:  Dow Chemical  (Daft pp. 265-266).  Dow's global geographic division structure emphasizes geographic grouping: each region reports directly to the CEO and has control of functional activities in the region.  A corporate-level product department with 6 product directors provides long-term planning and worldwide product coordination.

4.  Global Matrix Structure

Minicase:  Asea Brown Boveri (ABB)  (Daft pp. 266-267).  This very large company uses a global matrix structure with 65 business areas (product lines) on one side of the matrix and over 100 country managers on the other side.  Within the matrix the company is subdivided into 5,000 profit centers of 40-50 employees.  ABB employs 200K people worldwide.

5.  Transnational Model (aka Global Heterarchy)

The transnational model sometimes characterizes very large multinational firms with subsidiaries in many countries and with both global and multidomestic strategies. The transnational model may be viewed at the structure corresponding to very high values on both dimensions in the model of internaitonal advantages, so it is "off the chart" in the upper-right direction in the graph representing the model.
Characteristics of the transnational model are Q - "A globalization strategy means that product design and advertising strategy are customized throughout the world."  (TRUE/FALSE?)

Q - If the opportunities for a globalization strategy are many, but the opportunities for a multidomestic strategy are few, the model for global operations structure would indicate a(n) ____ structure.

Q - "In the transnational (aka global heterarchy model) a single headquarters is dominant, producing a structure that looks like an octopus."  (TRUE/FALSE?)

5.  TREND TOWARD EMPOWERMENT

Trend toward empowerment of employees throughout the organization is part of the shift to the learning organization.

1.  Reasons for Empowerment

Three main reasons for the empowerment trend are Thus empowerment facilitates innovation and organizational adaptation to environmental changes.

Minicase:  Monarch Marking Systems  (Daft 7e p. 503).  Monarch makes bar coding and price marking machines.  The empowerment program was implemented (against initial employee skepticism and resistance) by giving employees specific problems and asking them to both develop and implement a solution.  One example was improving efficiency of production by getting rid of the conveyor belt in assembly of hand-held bar code reader.

2.  Elements of Empowerment

The 4 elements of empowerment are
  1. make information about company performance available to employees
  2. improve knowledge and skills of employees
  3. give employees power to make substantive decisions affecting production (EX: through quality circles, self-directed work teams)
  4. reward employees based on company performance (EX: through profit sharing, employee stock ownership)

3.  Applications of Empowerment

Implementations of empowerment strategy can arranged along a continuum from minimal empowerment to extensive worker participation in setting organizational strategy, as in the following exhibit.

6.  TRANSFORMATIONAL LEADERSHIP

One new buzzword is "transformational leadership".  (From what field did they borrow that term?)
A "transformational leader" is able to take the organization through major changes by
  1. creating a compelling vision
  2. mobilizing commitment
  3. empowering employees
  4. institutionalizing a culture of change
Minicase:  Corsair Communications Inc.  (Daft 7e pp. 508-509).  Corsair is a civilian spinoff or major government contractor TRW marketing a technology for identifying the source of electronic transmissions.  The case describes how CEO Mary Ann Byrnes transformed the organization for its new circumstances.

7.  IMPACT OF TOP LEADERSHIP

See Daft 7e pp. 509-512
 

8.  MANAGING ORGANIZATIONAL DECLINE

See Daft 7e pp. 512-515 for details.


Last modified 6 Dec 2001