Aspects of International Business Orgnastion - Essay Example

International Business Organization Inserts His/her Inserts Grade Inserts (05, July, Task 1 Church House Trust is a United Kingdom private bank that provides saving accounts and mortgages to clients. It is the private bank division of Church House group but it was bought by Virgin Money in 2010 (Telegraph, 2010). Church House Trust is a very old bank with a history going back to 200 years. The bank provides very basic services to its clients and has a very limited market share. The rich history associated to the bank is the reason why bank is still getting customers even though it has only a single branch (Goodway, N. 2010). Church House Trust is not an extremely famous bank but has recently gained attention after Virgin Money purchased it. Church House Investment Management is another company under the umbrella of Church House. This company deals with investments of different clients but Church House Trust is a private bank that offers savings account and mortgages. The main target market of the Church House Trust is the old clients that have been associated with the bank for a long time. Church House Trust mainly focuses on a few clients and gives them special attention. The bank is not only focusing on higher income people but on people who require special attention. The aim of the company is to establish strong ties with a customer by giving him or her immaculate service and special attention. Mainly people who are old and not aware of the banking regulations require this attention so older age group people are the main target market of the company. The company also attracts people who are opening a new account or getting the mortgage for the first time. Young couples, students and foreign immigrants also turn to the bank in order to get good service. The differentiating element of the bank is its services. Church House Trust promises special care on the main page of its websites (Official Site, 2011) so they are actually hinting upon their aims and objective. They accept that they do not have a large clientele and take pride in treating a small number of clients with extra care. They are actually targeting people who need special focus and attention with regard to their bank accounts and mortgages. The company has made small number of customers its differentiating factor and is attracting customers by promising high quality of services. There are 5 types of saving accounts and each of them is catering to different types of customers. It is important to note here that Church House Trust does not have many products and services and that is why they claim that they provide excellence and special care in their services. A small portfolio of products restricts clientele but also shows that the company spends more time with a client than actually attracting clients. This is the message that Church House Trust wants to give to its customers. The bank also offers mortgages to clients. Church House Trust has a small team of employees that give individual attention to clients rather than focus on many clients at the same time. Task 2 Wal-Mart is a well known name in the retail business. The company has its head quarters in United States of America but its operations are spread all over the world. Wal-Mart is a huge name in the departmental store business and is the largest retailer in the world (Bloomberg News, 2011). The company is famous for its wide range of products and low prices. People go to Wal-Mart for bulk buying and to avail discounts. The company puts a wide range of products under a single roof and that is why it is able to attract a wide range of customers all over the world. The main aim of Wal-Mart is to provide everything at lower prices. Wal-Mart literally drives its competitors out of the market because of its cheap products. The focus of the company is on prices and nothing else. The company’s famous tagline is ‘Save Money Live Better’ (Official Website Wal-Mart, 2011). This shows the seriousness of the company in providing lower prices to customers. The company aims larger volumes of sales and therefore is able to lower its profit margins. This is the success strategy of the company as it attracts large number of customers and therefore is not hurt by the lower prices it offers. The environment of Wal-Mart is also representative of its cost effective strategy. The company is famous for its cost leadership strategies. Employees and managers are paid lesser as compared to other companies simply because the company focuses on lowering its costs (Holland. J. 2011). This strategy of Wal-Mart is also criticized but the company is growing at a great pace. The company also lowers its cost by passing their costs to the supplier. The name of Wal-Mart is so big that suppliers lower their prices in hope of getting large sales. In this way Wal-Mart wins big. Wal-Mart is also pursuing a strategy of vertical integration. It has started its own brand called Sam’s Choice and is buying everything from suppliers but selling them with its own name (Carlson, S. 2004). This is a very effective strategy as it is making its own brand without going into the trouble of producing goods. This is another example of the cost leadership strategy of Wal-Mart. They are establishing their own brand names and earning profits by outsourcing all of its production. The retailer is mainly focusing on lower prices and therefore is paying its employees less. But at the same time the drawback of this strategy is that the customer care services of Wal-Mart are extremely bad and people are mostly complaining about employees at stores of Wal-Mart. This is something that is an obvious outcome of cost leadership strategy pursued by Wal-Mart. The retail giant cannot pay its employees higher so it can also not motivate them to work harder. Also the focus of the company is not on customer services rather it is on lower prices. Task 3 The two structures that will be discussed will be centralized and decentralized structures. Centralized organization structure is characterized by central authority or power that makes all the decisions. The power to make decisions lies in the hands of a few people and the rest of the employees follow those decisions. On the other hand in decentralized structure have many individuals making decisions at different level. It can be said that decision making is more extended in a decentralized structure than in centralized structure. Each level enjoys some degree of autonomy in decentralized structures but in centralized structure power is only exercised by one or a few members. It is important to understand at this point that no particular structure is right or wrong when it comes to managing organizations. Also it is not important that a company chooses only one organizational structure. In Coca Cola Ontario both centralized and decentralized structure exist (Brown, L. 1981). The choice of structure for an organization depends upon many factors like strategy of the company, its size and range of its operations and number of employees etc. All these factors play a role in organizational structure choice. Usually small companies find it best to use centralized structure because the liability of the business is on the owner (Vitez, O. 2010). There are both advantages and disadvantages of both the organizational structure. Centralized structure makes the decision making processes quickly. It is particularly useful for technology oriented companies dealing with complex products. The decision making process cannot be extended in technology products because it is important that decision should be made by the experts. Also in centralized structure everyone has a clearly defined role so there is less ambiguity regarding roles of employees (Ehow.com, 2011). There are also disadvantages of the centralized structure of organization. This structure inhibits participation of employees and there is too much power in the hand of a few individuals. If lower level of employees disagrees with a decision then they can do nothing about it except raising their concerns. If their reservations are not entertained then they might not be motivated to work hard. Decentralized structures offer employees greater decision making power and employees are more empowered. Innovative companies actually have decentralized structure where they want innovative ideas. A more friendly culture exists in such organizations. Decision making is extended to employees so new and diverse opinions come out. Participation increases in decentralized structures and it motivates people to work hard. Efficiency is also increased because each group can be monitored individually. Also senior employees are not burdened in decentralized structure. Also lower level of employees is well aware of problems the company is facing. The main disadvantages of decentralized structure involve more people in the decision making process. Because of this more time is taken in the decision making process. Also employees may use power in a negative manner. Abuse of power can decrease motivation of employees. Vague goals can also hinder performance. Bibliography Bloomberg News. 2011. Wal-Mart, Ikea Lead Retailers’ Push in China Land-Buying as Rentals Surge, Bloomberg Website. Accessed on July 5, 2011 from http://www.bloomberg.com/news/2011-07-04/wal-mart-ikea-lead-retailers-push-in-china-land-buying-as-rentals-surge.html Brown, L. 1981. Innovation diffusion: a new perspective. London: Routledge. Carlson, Shawn. 2004. Wal-Mart Case Study, Rare Thoughts.com. Accessed on July 5, 2011 from http://www.rarethoughts.com/walmart.html E How. 2011. Centralized & Decentralized Organizational Structure, E how.com. Accessed on July 5, 2011 from http://www.ehow.com/about_6517661_centralized-decentralized-organizational-structure.html Goodway, N. 2010. Sir Richard Branson gets banking break as Virgin Money buys Church House, London Evening Standard. Accessed on July 5, 2011 from http://www.thisislondon.co.uk/standard-business/article-23792451-sir-richard-branson-enters-banking-as-virgin-money-buys-church-house-trust.do Holland, J. 2011. If Wal-Mart Paid its 1.4 Million U.S. Workers a Living Wage, it Would Result in Almost No Pain for the Average Customer, Alter Net. Accessed on July 5, 2011 from http://www.alternet.org/economy/150685/if_walmart_paid_its_1.4_million_u.s._workers_a_living_wage,_it_would_result_in_almost_no_pain_for_the_average_customer/ Official Website. 2011. Church House Trust. Accessed on July 5, 2011 from http://www.church-house-trust.co.uk/cht/ Official Website. 2011. Wal-Mart. Accessed on July 5, 2011 from http://www.walmart.com/ Virgin buys regional bank Church House Trust. 2010. The Telegraph. Accessed on July 5, 2011 from http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6949869/Virgin-buys-regional-bank-Church-House-Trust.html Vitez, O. 2010. Centralized Vs. Decentralized Organizational Structure, Demand Media. Accessed on July 5, 2011 from http://smallbusiness.chron.com/centralized-vs-decentralized-organizational-structure-2785.html Read More