Chapter

18
Organizing for Global
Marketing

McGraw-Hill/Irwin

2006 The McGraw-Hill Companies, Inc. All rights reserved.

Outline
Implementing Global Marketing
Organizational Structures
Coordination in Global Networks
Tools for Coordination
Managerial Roles
Conflict Resolution
Takeaways.

Implementing Global Marketing: The Contex

1.

The firm is already present in many markets.

2.

The firm is successful in at least some of the major markets.

3.

There is a history of successful operations with local

autonomy.

4.

Country managers have experience at home. For

administrative & control reasons, subsidiaries may be run by
expats. Local marketing is run by a local marketing manager.

5.

The legitimacy of the global marketing imperative is not all

that obvious in the organization unless competitors have
forced the issue.

6.

The global advantage derives from cost savings, demand

spillover effects & serving global customers.

7.

In a global strategy, there will be less autonomy for the local

subsidiary.

8.

The initiative for a global strategy comes from the top.

Implementing Global Marketing:

Achieving Coordination
The needed coordination
involves:
1.

Communication

2.

Motivation

3.

Flexibility
Via these organizational tools:
1.

Creating new organizational

units (e.g. global teams)

2.

Creating new positions (e.g.

global marketing director)

3.

Changing the reporting lines

4.

Creating new systems

5.

People adapting

Organizational Structures
EXPORT DEPARTMENT
INTERNATIONAL DIVISION
GEOGRAPHICAL/REGIONAL

STRUCTURE
GLOBAL PRODUCTS DIVISION
MATRIX ORGANIZATION
TRANSNATIONAL ORGANIZATION
HORIZONTAL NETWORKS

Export Department
Structure
President

Export

Marketing

Central staff

Production

R&D

Finance

Planning

Export Staff

Country 1
Representatives

Country 2
Representatives

Country 3
Representatives

Personnel

International Division Structure

President
Corporate Staff
Executive Vice President
Domestic

Executive Vice President

International

Division Staff

Product A
Division

Product B
Division

Division Staff
Country 1.
Sub. GM

Country 2.
Sub. GM

Country 3.
Sub. GM

Subsidiary staff

Note: Sub. GM = subsidiary general

manager

Manufacturing Marketing

Logistics

Regional Structure
President

Corporate staff

Executive Vice
President
Domestic Market

Executive Vice
President
Western Europe

UK
sub. GM
Note: Sub. GM = subsidiary general manager

Germany
sub. GM

Executive Vice
President
Latin America

Scandinavia
sub. GM

Global Product Structure

President

Product 1 division
Executive Vice President

Corporate staff

Product 2 division
Executive Vice President

Manufacturing

Home
country
plant

Brazil
plant

Malaysia
plant

Product 3 division
Executive Vice President

Sales

Japan
plant

Home country
sales
manager

Country 1
sales
subsidiary

Country 2
sales
subsidiary

Global Matrix Structure: Honda Motor

Honda
R&D
(Tokyo)

Honda Motor Co., Ltd.

Regional
headquarters
Americas
(Los Angeles)

Regional
headquarters
Europe, Middle
& Near East,
Africa (Reading,
UK)

Regional
headquarters
Asia &
Oceania (Tokyo,
Bangkok)

Regional
headquarters
Japan
(Tokyo)

Motorcycle
headquarter

Subsidiaries
(manufacturing,
sales, R & D)

Subsidiaries
(manufacturing,
sales, R & D)

Subsidiaries
(manufacturing,
sales, R & D)

Subsidiaries
(manufacturing,
sales, R & D)

Automobile
headquarter

Subsidiaries
(manufacturing,
sales, R & D)

Subsidiaries
(manufacturing,
sales, R & D)

Subsidiaries
(manufacturing,
sales, R & D)

Subsidiaries
(manufacturing,
sales, R & D)

Power
product
headquarter

Subsidiaries
(manufacturing,
sales, R & D)

Subsidiaries
(manufacturing,
sales, R & D)

Subsidiaries
(manufacturing,
sales, R & D)

Subsidiaries
(manufacturing,
sales, R & D)

A Transnational Network
Distributed specialized
resources and
capabilities

Coordination and cooperation in

an environment of shared
decision making

Flows of components,
products, resources,
people and information

The Advantage of a Network

Many companies view their global network as an invisible

resource or hidden asset. The network is an FSA, making it
feasible to attack and defend in different countries.

This makes local units more strategic, countering feelings of

compromised authority when shifting to a global strategy.

Treating the network as an asset allows a global strategy to

become a win-win proposition for both headquarters &
subsidiaries.

The network theory stresses that the linkages within a global

network can constitute the true source of competitive advantage
for the firm.

Global Marketing: Coordination is K

Complex networks facilitate

direct exchange of information
between subsidiaries, but
makes coordination difficult.

Global Marketing: Coordination is

Key

Strong centralization facilitates

coordination but reduces direct
knowledge sharing.

Global Marketing: Coordination is

Key

Simplified networks attempt

to facilitate coordination
without limiting knowledge
sharing.

Global Teams

To implement global marketing projects, the

most common organizational change is the
creation of global teams.
The teams consist of members from different
country subsidiaries and from different
functional fields.
Responsibilities vary from launching specific
programs or activities, such as the advertising
campaign for a new product, to more wideranging responsibilities, including the whole
marketing mix.
The European integration has spawned many
examples of global teams (e.g. 3Ms global
teams)

Tools for global coordination

GLOBALLY STANDARDIZED PLANNING SYSTEMS

GLOBALLY STANDARDIZED MANAGEMENT SYSTEMS

GLOBALLY STANDARDIZED SALES REPORTS

COORDINATING COMMITTEES, STAFF

CROSS-FUNCTIONAL AND CROSS-COUNTRY TEAMS

INFORMAL COORDINATION, PEOPLE-TO-PEOPLE

Organizational culture and coordination

Organizational culture is defined by a companys informal

routines & procedures for problem solving & decision making.
BUILDING A STRONG CORPORATE CULTURE GLOBALLY
HELPS COORDINATION
BECAUSE LOCAL SUBSIDIARY MANAGERS
CAN MAKE AUTONOMOUS DECISIONS IN LINE WITH THE GLOBAL
STRATEGY

The Global Marketing Directors Jo

Strategy:
Strategic planning, budgeting, and implementation with functions and
regions

Systems:
Design, creation, and maintenance of global marketing control systems

Coordination:
Coordination of all functions affecting business and major product lines

Performance evaluation:
Participation in performance evaluation of functional and regional managers

Profitability:
Profit accountability for individual lines of business and major product lines

The Expatriate Manager

Apart from being the headquarters' envoy, the expatriate country
manager must fill the following roles:

CUSTOMER REPRESENTATIVE a high-level contact with

customers, prospects, & suppliers in the local market

LOCAL CHAMPION a champion for the local office at

headquarters, airing local requests and justifying the need for
additional resources

NETWORK COORDINATOR one who provides linkages with the

firms other offices in the worldwide network of the firm

The Global Account Manager

In B2B, where a customer might be a large multinational, the global
account manager (GAM) serves a coordinative function for this
one single global customer.
The GAMs tasks include:

Coordination of customer orders from different countries

Providing uniform prices

Coordination of communication within headquarters

Provisions of consistent after-sales services

Conflict Resolution
Conflicts between headquarters and local subsidiaries are almost
unavoidable. A few practices can help minimize them:
1. Let local managers retain local brands and marketing budgets
2. Solicit country managers input for new product development
3. Give country managers lead roles in global teams
4. Provide international transfers for country managers
5. Involve country managers in formulation of global marketing
strategies.

Takeaway

The global network of the multinational firm is a marketing

asset that can be leveraged with a global strategy only if
the appropriate organizational linkages to the local market
are created.

Takeaway

The most important aspect of any organizational solution is

to make sure that local motivation is not diminished,
negatively affecting a global strategy.
Local managers need to be consulted early in the strategy
formulation process.

Takeaway

Local managers not only have better knowledge of the local

market but can also assume a more global view given the
chance.
In the transnational company, local subsidiaries become
centers of excellence, with global responsibilities for a
particular product line local globalization.

Takeaway

Coordination mechanisms that companies use range from

creating a common global culture, sharing information, &
establishing personal relations, to the creation of new
organizational units such as global account managers and
global teams.

Takeaway

The organizational structure & the systems need to be

designed to serve one common purpose:
to bring the global company closer to the local customer
global localization.