MSc International Business 2013-14

Issues in Management 2013

Module Leader. David Perman.

Monday 30th September 2013

An introduction to the main issues involved in managing/leading International Businesses and International Business Projects.

1 Domestic Business and International Business: 2 International Management. 3 Changes in Organisational design

What makes International Business different from Domestic Business?

1
2 3

4
5 6

Multinational or Trans-national firms. Marketing across cultures National legal systems of ownership National systems of accounting and financial regulation National/regional systems of governance and employment regulation. Exchange rates

The discovery of Institutions.

National (regional) Financial and Business Systems National Industrial Relations and Employment Systems

The problem here is: How permanent/stable are they? Who benefits from them? What political forces are needed to change them?

Problems with differing socio-economic systems

1.
2.

3.
4. 5.

Varieties of capitalism . US, North Europe. Japan (Korea). S.E Asia, Latin America Varieties of socialistic economies and State Owned Enterprises (SOEs) BRIC. The new mass production and consumption economies. Brazil, Russia, India and China Emerging economies. Turkey, Nigeria, Mexico Crippled economies. Eg. Greece, Ireland?, Zimbabwe

Is globalisation the solution?

Is it a one-way road? Different starting points Differing rates of adopting new technologies Different cultures. Differing Business Models Differing value systems What are the common factors? Add your own suggestions

What makes an International Manager different from a domestic manager?

The International Manager Faces more insoluble problems Lacks company, divisional, team support Needs more innovative solutions Requires greater collaborative and networking skills Requires quick/immediate responses from team members at home Needs to generate more energy

Strategic Issues for International Managers

Problem of outside-in or inside-out thinking Organisational differences Cultural differences often related to status and authority issues

Organisational issues for International Managers Authority systems Information systems Work systems

Cultural issues for International Managers These will be discussed in most modules for the rest of your programme!!!

Changes in Organisational Design and Organisational Behaviour

Organisational Design and Function. 2. The Economics of Information and the de-construction of hierarchies 3. The emergence of new approaches to control and communication within firms.
1.

1. The formal organisation

Main operational features
Hierarchies- levels, authority, reporting lines. Specialisation- jobs, roles, competencies, units. Procedures- rules, standards, systems. Managing processes via coordination, control and rewards. Collaboration and communication through Outsourcing, Virtual Organisations, Alliances and Networks, Organising across borders.

1 (a) Factors Influencing employee Performance

How people are managed and organised in order to either improve or impair the contribution they can make towards collective goals This can be seen in terms of 1) Motivation: 2) Communication: and 3) Control: These three factors always involve Hierarchies and Authority, Information and Procedures

1 (b) Identifying organisational deficiencies

Poor motivation and morale Low quality and slow decision making Lack of coordination within processes and integration of processes Failure to innovate in new circumstances Rapidly rising administrative and employment costs

2. NEW TECHNOLOGIES will:

Encourage simplification of management structures Allow for greater integration of tasks and roles Enable greater and quicker flows of information across boundaries and create multiple new channels Open up new organisational possibilities Destroy existing hierarchies, bureaucracies, networks and boundaries Create new connectivities between people

3.Knowledge-based Organizations
Growing importance of Innovation-based strategies to achieve competitive advantage Growing use of cross-functional and interdisciplinary teams to encourage innovation Introducing new structures and groups to enable access to newly emergent forms of information and organization

4.

New Strategic and Cultural Issues that confront firms

Customer demands for higher quality and speedier service International competition The pace of change of the introduction of new technologies The explosion of information Ability to attract and retain the best people. Talent Management Importance of new personal competencies to meet the demands of the developments listed above

The new emerging forms of organization must be able initiate:

1.
2.

quicker decision making procedures

new forms of organizational culture 3. more innovative changes into the management of the supply-chain 4. more responsive strategies

A move from a Production or Service Economy to a Knowledge Economy

Changes in Organisational Design

1 Mintzbergs 6 forms of Organisational Structures

ENTREPRENEURIAL STRUCTURE
ENTREPRENEURIAL OWNER/MANAGER

EMPLOYEE

EMPLOYEE

EMPLOYEE

MAIN FEATURES

- ORGANISED AROUND THE ENTREPRENEURIAL OWNER - TOTALLY CENTRALISED : NO DELEGATED RESPONSIBILITIES - SIMPLE COMPANIES IN THE EARLY STAGES - WHERE OWNER NEEDS TO UNDERSTAND AND CONTROL - THE FOUNDER MAY LACK FUNCTIONAL KNOWLEDGE AND IT WILL ONLY WORK UP TO A CERTAIN SIZE

SITUATIONS

LIMITATIONS

FUNCTIONAL STRUCTURE
BOARD/STRATEGIC LEADERSHIP

OPERATIONS

MARKETING

ACCOUNTING

HRM

MAIN FEATURES APPROPRIATE ADVANTAGES

- CENTRALISED AND ORGANISED AROUND TASKS TO BE CARRIED OUT - IN SMALLER CONCENTRIC COMPANIES FACED BY A STABLE ENVIRONMENT - EFFICIENT WITH LOW OVERHEAD AND DELINEATED RELATIONSHIPS - DEVELOPMENT OF FUNCTIONAL EXPERTISE AND SIMPLE CONTROL LINES - LACK OF GENERALISTS, RESPONSIBILITY FOCUSES ON CEO, SHORT TERM FUNCTIONAL FOCUS, LACK OF CO-ORDINATION AND EMPIRE BUILDING

LIMITATIONS

MULTI-DIVISIONAL OR M-FORM CORPORATION

MAIN BOARD/PARENT
CENTRAL SERVICES

PRODUCT DIVISION A

PRODUCT DIVISION B

PRODUCT DIVISION C

INTERNATIONAL DIVISION

MAIN FEATURES

- DIVISIONS ARE PROFIT CENTRES OR EVEN SBUs AND RUN BY GENERAL MANAGERS - AS SIZE AND COMPLEXITY INCREASES BUT WITHIN CONCENTRIC SCOPE - SPREADS RESPONSIBLIITY, SPLIT BETWEEN CORPORATE AND BUSINESS STRATEGIES - FACILITATES ENTREPRENEURIALISM AND ADAPTIVE CHANGE - POTENTIAL FOR CONFLICT, GAPS AND OVERLAPS; UNLESS PARENTED PROPERLY

APPROPRIATE ADVANTAGES

LIMITATIONS

Holding Company
MAIN BOARD/PARENT
CENTRAL SERVICES

COMPANY A

COMPANY B

COMPANY C

COMPANY D

MAIN FEATURES

- PARENT ACTS AS AN INVESTMENT OR MANAGEMENT CONSULTANCY, AUTONOMOUS - IN A CONGLOMERATE WHERE THE PARENT BUYS/SELLS AND RESTRUCTURES FIRMS

APPROPRIATE

ADVANTAGES

- LOW CENTRAL OVERHEADS, SPREADS RISK AND FACILITATES EASY DIVESTMENT

- NO SYNERGY AND DIFFICULT TO DEMONSTRATE ADDED VALUE CURRENTLY OUT OF FAVOUR WITH CAPITAL MARKETS

LIMITATIONS

The Matrix Organisation

A MATRIX STRUCTURE FOR A BUSINESS SCHOOL
HUMAN RESOURCES MARKETING LOGISTICS FINANCE & ACCOUNTING STRATEGIC MANAGEMENT

UNDERGRADUATE COURSES MASTERS DEGREES

PhDs AND RESEARCH

EXECUTIVE DEVELOPMENT

THE NETWORK ORGANISATION

DIVISION OR FUNCTION

DIVISION OR FUNCTION

CENTRE

DIVISION OR FUNCTION

FUNCTION OR DIVISION

3. The Economics of Information

Aims and objectives
Discuss the trade off between rich information and the reach of information within the case of economic transactions. Moores Law Introduce the main features of Internal Labour Markets. (ILMs)

The Richness and Reach Trade-off Deconstruction and Disintermediation

richness
Borders Toyota US corporations Amazon

navigators

reach

Some Typical Organisational Problems: 1

Economics of information determined by the physical entities the organisation has had to manage Division of labour, accountability, discipline are consequences of the trade off between richness and reach. Need for middle-managers to switch information up and down the organisation. The size of the Span of Control a result of how to manage large amounts of information. Hierarchical structures are a set of static information channels that reduce the amount of information that needs to be moved around.

Organisational problems: 2
Asymmetries of information imply asymmetries of power Senior managers take a long-term and holistic view whilst subordinates know the detail of local arrangements. To avoid conflict within the organisation, commitment, loyalty and fairness become essential ingredients of employment. This is even more pronounced in Japanese companies where advancement is slower and organisational knowledge more widely shared.

3. Main features of Internal Labour Markets

Long-term attachments Promotion from within Clear skill gradients reflecting on the-job training Formal rules governing employment relations Wage rates related to jobs rather than individuals Evaluation of quality of work a lengthy process involving formal appraisal procedures Screening of applicants

Reasons for the spread of Internal Labour Markets (ILMs)

Growth of the government as an employer Role of Trade Unions Growth of the Knowledge Industry Good personnel policies acquire both legal and stakeholder/institutional requirements

Main features of ILMs

Creation of loyal employees via emphasis on seniority and the use of grievance procedures to ensure fairness. Growth of firm specific knowledge at the expense of job specific knowledge The creation of cohorts within the organisation

Main features of a deconstructed e.business organisation.

Network power. Greater reach encourages reliance on partners to grow fast Transparency and direct communication Fast feedback, easy protest Reliance on new knowledge- notions of constant change/innovation. Large audiences and crowd behaviour.

This requires a new idea of organisation.. Kanter argues the idea of a community is the most appropriate.

The Purpose of Case Studies

The purpose of studying business cases is not to learn answers to specific problems. The aim is to become familiar with analysis followed by decision making and the process of simply trying to find answers. It is not so concerned with answers themselves.

Temporary concerns about using case-studies

Cases have no unique answer Information can be ambiguous and even contradictory The issues that you have been asked to address are not explicitly stated Some information is redundant and sometimes irrelevant Note-taking is quite difficult

The skills developed by using case studies

Thinking clearly in complex and often ambiguous situations The application of quantitative tools Recognising the significance of information Determining the nature of vital missing information Communicating orally in groups Writing clear and convincing reports Applying your personal values to the strategic analysis

Responsibilities of the participants

Attend all sessions Master and analyse the information in all cases Participate in discussions and constructive critiques Work hard at working with your group Accept responsibility for all deadlines Try to enjoy participating in all discussions

General tips on oral presentations

Eliminate nerves and speak from brief notes Rehearse and plan for the stated time Control voice pitch and speed Gesticulate only in moderation Speak to the entire audience Keep the arguments simple Observe feedback from the audience