Organizational Structure


Organization Design for International Business

          After studying this chapter, students should be able to:

          > Define and discuss the nature of international organizational design.
          > Identify and describe the initial impacts of international business activity on organizational design.
          > Identify and describe five advanced forms of international organizational design and discuss hybrid global designs.
          > Identify and describe related issues in global organization design.
          > Discuss the role of corporate culture in international business.
          > Describe the management of change in international business.


OPENING CASE: Unilever Matches Strategy and Structure

      The opening case describes Unilever’s effort to streamline its operations and focus on its core business areas.

      Key Points

    1. With sales of $57 billion annually, Unilever, a packaged goods company, is second only to industry giant Proctor and Gamble.   Its brand names include Lipton, Dove, and Vaseline, and its product groups range from frozen foods to personal care products.

    2. The company is jointly headquartered in London and Rotterdam, and is operated by two holding companies.   A single management team runs the company.   Over the years, Unilever’s growth strategy often involved acquiring consumer products businesses, many of which had supporting operations.   However, this strategy resulted in an unwieldy structure consisting of five basic business groups: food products, personal products, soap/laundry products, cosmetics/perfume/hair products, and specialty chemicals.

    3. The specialty chemicals group had only indirect linkages with the other groups, and consequently, had higher administrative costs.   In addition, the group was not meeting its performance targets, and perhaps even more disturbing, some of the chemicals it made could often be bought at a lower...