Organizing for Worldwide Effectiveness: This article discusses how companies across the globe are trying to overcome the hurdles related with the overall global economy. Different corporate strategies do in fact have different tradeoffs. Responding only to the needs of a local community/culture suggest that companies cannot sell the same product globally. Companies that sell the same product globally, however, suggest their incapability to respond to their local environments. With this being said, the main takeaway from this article is that the most effective and successful worldwide corporations use a transnational organization for long-term sustainability. Transnational organizations strategically merge a centralized and decentralized structure together.
• Matsushita - demonstrates a centralized organization. They manage this style through Multiple Linkages, Market Mechanisms, and Personnel ...view middle of the document...
The main takeaway from this article is that companies need to work harmoniously through cooperative and accommodating efforts. The article also discussed the different roles for national subsidiaries which include:
• Strategic Leader - played by a proficient national subsidiary strategically located in an important market.
• Contributor - a subsidiary in a small market but with a unique capability.
• Implementer – located in a less strategically important market with just enough capability to preserve its local operation.
• Black Hole – a company with little global sway, but its strong local existence is important.
Kent Chemical: 1. The first issue was the new strategy that obligated managers of different areas to follow common procedure in financial reports, target settings, and capital allocations. The second issue was the very independent subsidiaries that perceive their ways to be correct. The third was a lack of coordination and open communication of local branches with headquarters. Every arm used their own personal knowledge to operate their issues, which resulted in the decision-makers in local offices to be reluctant to communicate with the global offices. 2. Morales introduced the GBDs to improve communication in three main business areas and encouraged local offices to follow the one main corporate strategy. This was unsuccessful because each business sector did not have local knowledge and did not fully understand their responsibilities. Their styles were interventional leading to more problems. 3. Sterling Partners recommendations are similar to Transnational Organizations where decentralizing and centralized structures were blended together. The matrix organization was created to improve communication and to mix global strategy with local needs. Also operation of each business area was changed. As a result, consumer products then ran their business based on local customer needs. Due to fire protection laws in each country, the fire products should be localized. Finally, medical plastic would be managed by blending local and global operations since clients were multinational companies which were able to supply globally.