Transcript Lecture 29m
Organizing for Global Marketing Muhammad Waqas Lecture 29 Recap Muhammad Waqas • Global account management • Other forms of promotion • Public relations Learning Objectives • • • • Muhammad Waqas • • • • List and explain the internal and external factors that impact how global organizations are structured and managed. Note the advantages and disadvantages of the different ways of structuring a firm with international sales. Discuss global mandates, and note how global mandates can affect a firm’s organization. Explain why organizational issues for born-global firms differ from those for traditional multinational companies. Give examples of how technology can be utilized to support internal global communications systems. List and explain the elements of an effective global control strategy. Discuss the conflicts that can arise between international headquarters and national subsidiaries. Consider a career in global marketing. Chapter Outline Muhammad Waqas • Elements that affect a global marketing organization • Types of organizational structures • Controlling the global organization • Conflict between headquarters and subsidiaries • Considering a global marketing career Elements That Affect a Global Marketing Organization • Corporate goals – Mission statement • • • • Why do we exist? Where are we going? What do we believe in? What is our distinctive competence? Muhammad Waqas – Strategies and objectives Elements That Affect a Global Marketing Organization (cont.) • Corporate worldview – Ethnocentric orientation • Ideas emanating from home market considered superior • HQ tells subsidiaries what to do – Polycentric orientation • Each market considered unique • Local subsidiaries given leeway to develop and implement their own strategies Muhammad Waqas – Geocentric orientation • All national units—including domestic ones—must consider what is best for whole organization • HQ holds power but keeps channels for good ideas—and senior management—open for subsidiaries Other Internal Forces Muhammad Waqas • • • • • Importance of international sales Diversity of international markets served Level of economic commitment Human resources flexibility External Forces Muhammad Waqas • • • • Geographic distance Time zones Types of customers Government regulations Types of Organizational Structures Muhammad Waqas • Companies without international specialists • International specialists and export departments Types of Organizational Structures (cont.) • International divisions – Created when international sales coordination extends beyond capacity of international specialist or export department – Directly involved in the development and implementation of global strategy – Actively seeks out opportunities in foreign countries Muhammad Waqas • Regional or local offices = close contact with market Types of Organizational Structures (cont.) • Geographic organizational structures – Appropriate when company needs intimate knowledge of its customers and their environments – Gives company opportunity to understand the local culture, economy, politics, laws, and competitive situation – Two Types Muhammad Waqas • Regional management centers • Country-based organizations Types of Organizational Structures (cont.) • Geographic organizational structures – Regional management centers Muhammad Waqas • Focus on regions of world • Market similarity and size • Allows company to locate marketing and manufacturing efforts in such a way as to take advantage of regional agreements such as NAFTA • Puts company in closer contact with distributors, customers, and subsidiaries Types of Organizational Structures (cont.) • Geographic organizational structures – Country-based organizations Muhammad Waqas • • • • Separate unit for each country Extremely sensitive to local customs, laws, and needs Expensive!!! Many companies are phasing out country-based structures and are moving toward regional centers Types of Organizational Structures (cont.) • Functional organizational structures Muhammad Waqas – Top executives in marketing, finance, production, accounting, and research and development all have worldwide responsibilities – Best for narrow or homogeneous product lines with little variation between products or geographic markets Types of Organizational Structures (cont.) • Product organizational structures – Each product group is responsible for marketing, sales, planning, and (in some cases) production and research and development Muhammad Waqas • Other functions such as legal, accounting, and finance can be included in the product group or performed by corporate staff – Common for companies with several unrelated product lines Types of Organizational Structures (cont.) Muhammad Waqas • Product organizational structure – Advantageous when product line constantly changes with technological advances – Facilitates the development of global products and global roll-outs – Appropriate when perceived differences involved with marketing the various product lines are greater than perceived differences in geographic markets – Knowledge of specific geographic areas can be limited and sensitivity to local market conditions can be diminished Types of Organizational Structures (cont.) Muhammad Waqas • Matrix organizational structures – Developed to overcome drawbacks of geographic, functional, and product organization structures – Allows for two or more dimensions of theoretical weight, e.g., importance to product and geography – Complexity can cause duplication of authority, confusion of responsibility and power struggle – Requires change in management structure from traditional authority to influence system based on technical competence, interpersonal sensitivity, and leadership Summary Muhammad Waqas • Elements that affect a global marketing organization • Types of organizational structures References Muhammad Waqas • Gillespie, K., Jeannet, J.P. and Hennessey, H.D. (2004), Global Marketing: An Interactive Approach, Houghton Mifflin, Boston, NY.