Organizational Research & Theory Essay

Section Exam (II)

MBAV 6001, Organizational Research & Theory

Question I

Each company should choose an appropriate strategy for its business model, with today’s market trends, the international business strategy is a favorite choice. It has developed the economy, moved money from rich to poor countries and assisted poorer countries grow more rapidly. There are benefits as well as risks associated with international markets. Four basic strategies are used to enter into and compete in the international environment as follows.

The first strategy, “multi-domestic strategy” has a flat hierarchy with decentralized control to subsidiaries and divisions in individual countries. Its aim is to maximise responsiveness to local needs, and customize product offerings. In implementing this aim, it operates in a “global geographic structure”. Market strategy depends on national conditions. The value-creation activities are duplicated in all countries. Authority is delegated to each overseas division. Market and output controls are used by Managers at global headquarters. The integration by the international organizational culture is low. There is a disadvantage in the high cost structure and no benefits of operating globally.

The second strategy is an “international strategy”. It decentralizes all value-creation functions. The Hierarchy level is relatively tall, core competences are centralized, but other competencies may be decentralized. In implementing this strategy, companies use a “global product group structure” and create “product group headquarters” to organize the activities of domestic and foreign divisions. On a global level, product managers will be in charge of organizing all aspects of value creation. Furthermore, the international division will control all managers abroad. The need for integrating mechanisms is medium.

The third strategy, “global strategy” is a semiconductor industry. It focuses on low cost strategies to maintain...