CONTROLLING AND ORGANIZATION

OF INTERNATIONAL BUSINESS
 International Business

Plannin
Marketing Strategy Finance
g

The important question is how to manage them

Management control and organization

You can’t manage what you can’t measure

Controlling and Organization of International Business

By Arpit amar
International marketing-2011
Contents

•Organization of business
•Architecture and structure of organization
•Principles of controlling
•Importance of controlling
•Levels of controlling
•Factors affecting controlling
•Steps in controlling
•How to control international marketing
•How control and organization relates to
marketing

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Principles of organization

“The organization of international business refers to the integrated function of formal

organization structure, coordination, control system, processes, culture and people.
-Charles W.L. Hill”

Three factors in organization

•Division of the organization into subunits
•Decision-making responsibilities (centralized vs. decentralized)
•The establishment of integrating mechanisms to coordinate the activities.

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Architecture of organization

People
Internal body
parts of
organization
Example process structure
Siemens

culture system
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Structure of organization
External
body
adjustments
of
organizatio
n
Horizontal
differentiation

Integrating
mechanism

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Vertical differentiation

The location of Centralization

decision making
responsibilities
with in the
structure of
Decentralization
organization

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Horizontal differentiation

Function
How the
organization
decides to divide
Types of business
its various
departments or
activities into
sub units
Geographical area

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Integrating mechanism

• Direct contacts
How the • Teams Formal
• Matrix structures
organization
develops various
mechanism to
coordinate and
integrate between •Knowledge network
different sub units Informal
•Information transmission
Principles of controlling

“Control refers to the task of ensuring that activities are producing the desired results
and is limited to monitoring the outcome of activities, reviewing feedback
information about this outcome, and if necessary, taking corrective actions". - Reeves
and Woodward

Features of Controlling
•One can control future happenings but not what has happened.
•Every manager in an organization has to perform the control function.
•Control is a continuous process

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Why is it important?

Performanc Helps in Efficiency

e decision in
evaluation making operation

Establish Monitoring
superior- of process
subordinate and
relation planning

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Levels of controlling

• Strategic control • Organization • Operations

control control
• How the
international • How the • How the
business international international
formulates and business design business focus
achieves its acts in response on operating
strategic goals to changes in systems in an
organization organization and
environment its subsidiaries

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 Strategic Organization Operation
control control control
examples examples examples

•Market entry •Finance and cost regulation •Production analysis

•Environment •Credit rating checks •Cost factors
•Profitability analysis •Consulting and •Supply and logistics
•Innovation and communication regulation
development •Promotion and advertising •Auditing and inspection
•Product mix •legal regulations •Time management
•Competitor analysis •Uniformity to standards •Storage and transport

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Factors affecting controlling

Domestic values and practices

Communication systems
Distance
Environmental differences
Environmental stability
Subsidiary performance
Quality of international operations

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Steps in controlling

Establishing control Taking Corrective Change

standards measures standard

Change
Example- deviation
Banking
industry Maintain
status Quo

Measuring the Comparison of

performance performance

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“How to control international marketing operations”

Break even analysis- total revenue and total cost

Financial analysis - cash flow analysis, ratio analysis, monitoring capital expenditure

Return on investment(ROI)- on fixed asset, working capital ,analyzing risk taking

Management audit- efficiency evaluation by experts of plans, policies, systems and procedures

Management information system- data collection and processing to manager, delegation and control

Performance evaluation techniques- benchmarking for processes and competitor, balance score card

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How controlling and organization affects
international marketing
Strategic
If organization Apple
marketing
is centralized
control

If organization Operations Luxemburg

is level marketing based De
decentralized control beers

If marketing
Organizational Amazon
strategies
control
changes fast

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 Summary

•Organization of international business

•Controlling of international business
•Marketing control techniques
•Relation of controlling and organization to marketing

References: Handbook marketing – controlling by Christopher zerres,

Michael p. zerres
Marketing management by Philip kotler
Global marketing management by W. keegen, M.green

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Questions

Thanks

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