Transcript ORGANIZING GLOBAL MARKETING EFFORTS Chapter Eighteen

Global Marketing Management
Masaaki Kotabe & Kristiaan Helsen
Third Edition
John Wiley & Sons, Inc., 2004
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Management, Third Edition, 2004
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Chapter 18
Planning, Organization, and
Control of Global Marketing
Operations
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Management, Third Edition, 2004
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Chapter Overview
1. Global Strategic Marketing Planning
2. Key Criteria in Global Organizational
Design
3. Organizational Design Options
4. Organizing for Global Brand Management
5. Life Cycle of Organizational Structures
6. To Centralize or Decentralize?
7. Controlling Global Marketing Efforts
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Introduction
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The capstone of a company’s global marketing
activities will be its marketing plan.
To implement its global plans effectively, a
company needs to reflect on the best
organizational setup that enables it to
successfully meet the threats and opportunities
posed by the global marketing arena.
Global marketers must confront organizational
issues such as:
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Introduction (contd.)
(a). What is the proper communication and
reporting structure?
(b). Who within the organization should bear
responsibility for each of the functions that need
to be carried out?
(c). How can an organization leverage the
competencies and skills of its individual
subsidiaries?
(d). Where should the decision-making authority
belong for the various areas?
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1. Global Strategic Marketing Planning
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The content of a global strategic marketing plan
usually covers four areas:
1. Market situation analysis
2. Objectives
3. Strategies
4. Action plans
Bottom-Up versus Top-Down Strategic Planning
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1. Global Strategic Marketing Planning
(contd.)
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Pitfalls: Marketing plans can go wrong. The top
three stumbling blocks are:
1. Lack of proper information
2. Too little emphasis on the development of
alternative strategic options
3. Unrealistic strategic objectives
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2. Key Criteria in Global Organizational
Design
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Environmental Factors:
– Competitive Environment
– Rate of Environmental Change
– Regional Trading Blocs
– Nature of Customers
Firm-Specific Factors:
– Strategic Importance of International Business
– Product Diversity
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2. Key Criteria in Global Organization
Design (contd.)
– Company Heritage
– Quality of Local Managerial Skills
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3. Organizational Design Options
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International Division Structure
Global Product Division Structure (see Exhibit
18-2)
Geographic Structure (see Exhibit 18-2)
– Country-Based Subsidiaries
– New Role of Country Managers: Country
managers of the twenty-first century should
have the following five profiles:
» The trader
» The builder
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3. Organizational Design Options
(contd.)
» The cabinet member
» The ambassador
» The representative
– Regional Structures: A recent survey done in
the Pacific region singles out five distinct roles
for regional headquarters (RHQs):
» Scouting
» Strategic simulation
» Signaling commitment
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3. Organizational Design Options
(contd.)
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» Coordination
» Pooling resources
Matrix Structure (see Exhibit 18-4)
– The matrix structure explicitly recognizes the
multidimensional nature of global strategic
decision making.
– With a matrix organization, two dimensions are
integrated into the organization.
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3. Organizational Design Options
(contd.)
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The Global Network Solution (see Exhibit 18-5)
– The networked global organization is
sometimes also referred to as a transnational.
Example: Asea-Brown Boveri (ABB)
– In the network model, each national unit can be
viewed as a source of ideas, skills, capabilities,
and knowledge that can be harnessed for the
benefit of the total organization.
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4. Organizing for Global Brand
Management
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Global Branding Committee
– Usually made up of top-line executives from
headquarters, regional, or local offices.
Brand Champion
– A brand champion is a top-line executive
(sometimes a CEO).
Global Brand Manager: For the global brand
manager to be effective, the following conditions
should hold:
– The top of the organization is committed to
branding.
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4. Organizing for Global Brand
Management (contd.)
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– There is a solid strategic planning process in
place.
– Managers see the need to travel to learn about
local management and best practices.
– There is a system to identify, mentor, and train
prospects who can fill the role.
Informal, Ad-hoc Branding Meetings
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5. Life Cycle of Organization Structures
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Several management theorists have made an
attempt to come up with the “right” fit between
the MNC’s environment (internal and external)
and the organization.
One of the major popular schemas is the stages
model developed by Stopford & Wells (see
Exhibit 18-6). The schema shows the relationship
between the organizational structure, foreign
product diversity, and the importance of foreign
sales to the company (as a share of total sales).
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5. Life Cycle of Organization Structures
(contd.)

Glocal Mind-Set: Country and regional managers
must look at strategic issues from multiple
perspectives.
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6. To Centralize or Decentralize?
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Centralization and Consolidations: In practice,
MNCs are somewhere between these two
extremes (see Exhibit 18-7).
Transnational Solution: Companies strike a
balance between centralization and
decentralization.
Federalism: Federalism is a way to combine the
autonomy of the local units with the benefits of
coordination. The model has the following
characteristics:
– Noncentralization
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6. To Centralize or Decentralize?
(contd.)
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Negotianalism
Constitutionalism
Territoriality
Balance of Power
Autonomy
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7. Controlling Global Marketing Efforts
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Formal (“Bureaucratic”) Control Systems
– Establishing Standards (Metrics)
» Behavior and outcome-based
– Evaluating Performance
– Analyzing and Correcting Deviations
Informal Control Methods
– Corporate Culture:
» Clan cultures & market cultures
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7. Controlling Global Marketing Efforts
(contd.)
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– To shape a shared vision, cultural values should
have three properties:
» Clarity
» Continuity
» Consistency
– Human Resource Development
“Soft” versus “Hard” Levers: There are seven
management tools or levers that companies can
use to resolve the global/local tradeoffs:
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7. Controlling Global Marketing Efforts
(contd.)
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Organizational structure
Process
Incentives
Metrics
Strategy
Networks
Culture
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7. Controlling Global Marketing Efforts
(contd.)
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For a proper structure and strategic coherence, the
following pieces of advice are offered (see Exhibit
18-10 & Summary):
– Recognize the need for business asymmetry
– Democracy is a must.
– A shared vision is important.
– There is a need for a good mix of specialists of
three types – country; functional; and business.
– Moving unit headquarters abroad seldom solves
the organization’s problems.
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Management, Third Edition, 2004
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Copyright © John Wiley & Sons, Inc., 2004
Chapter 18
Kotabe & Helsen's Global Marketing
Management, Third Edition, 2004
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