International Management - Scholarship Essay Example

International Management and Section # of The need for organizational topologies is fairly evident in the world today as they assist in reducing the complexities associated with multinational enterprises to an extent that these become rather manageable. One of the most essential characteristic is that these can be used as an instrument to stimulate opinions, thinking processing and judgments on alternate directions in which decision makers can run their organizations. A typology can be even more authoritative if it is empirically supported by foretelling statements. (J, A core typology of organizational environments, 2009). Several typologies are accessible for the categorization of major contingencies of organizational operation and performance. Technologies, organizational tactics, goals and targets, decision making process, management and leadership styles, environment, cognitive preferences are some examples. Multinational organizations have several reasons for global growth and expansion as they want to boost competitive advantage, with terms like polycentric, Geocentric, Ethnocentric, Multidomestic, International, Global and Transnational are usually used to symbolize different types of Multinational corporations. This can be useful in diminishing the complication of multinational firms and it can also be used in a creative and productive manner if meaningful organizational typologies are discovered (David C, 2008). The classical examples of such models are the fast food chains (KFC, McDonalds, Buger King, Pizza Hut), cellular firms (Motorola, NOKIA, Samsung), automobile industry (Toyota, Honda, Misubishi), etc. Particularly, the International management include a wide range of authors have categorized subsidiaries in accordance with the development and roles assigning different typologies to separate individual group. The development of the literature on the roles of subsidiaries has helped in enhancing our comprehension on the significance of two primary mechanisms that figure these roles that is factors connected to the external environment of the subsidiariesand factors associated to the outer environment of the MNC system. An outcome of a progress in development of the increasing advancement in the multinational's mounting dedication towards international markets has also been of significance to the subsidiary roles. Generally, according to the results a considerable freedom in the act of decision-making regarding the production and operational issues was enjoyed by the subsidiaries; the long-term strategic decisions, for instance tactical planning or restricting performance criteria. (K, 2005) Advancement and progress of Hungarian subsidiaries has occurred only to a limited extent and mostly in terms of scale, quality and elasticity of operations. Thesubsidiaries were unable to extend the required capabilities for a functional shift although the outer surroundings were by and large encouraging, and it served as the main reason why it was present in as absenting control center assignments in ethnocentric German activities. Regarding the future research of the subsidiary development, investigations slackness and flabbiness should be taken into account. Most probably the subsidiaries would upgrade when the rate of development of the host country takes a rise due to the spread out effects which are a resultant of government subsidies and better market opportunities. One such prominent example is the progress and development seen in the Canadian subsidiaries. Subsidiary typology research has been observed to pursue distinct patterns, both theoretically and empirically. Most likely, typologies are frequently generated as second-order impacts from practical or idealized plans and strategies for controlling global operations with subsidiary types pertaining to the parts they play in various types of different international strategies. Subsidiary roles can also be called as a result of a development of the multinational's increasing obligation towards global markets. The foremost cause of the variations that took place in the considered subsidiaries was the host country factor. An evident expansion and enhancement of operations was noticeable. Governmental policy and admission to local knowledge served as a stimulant to developments in theoperations regarding subsidiaries, while amplified labor cost proved to be an obstacle a healthy and fast development. MNC structural factors, for example the decision of allocating resources made by the headquarters served as a main cause of the strategic inertia of Hungarian subsidiaries. In the case of MOTOR, KNIT, ELEC and CLOTH, MNC-wide reconfigurations were taken note of, where the manufacturing and production was repositioned from Germany to Hungary. This, however did not direct the way towards allocation of more challenging steps in the value chain, In addition, even though the relocation of the production was the basic motive for settling down in Hungary, yet this was carried out step by step: Headquarters keenly monitoring whether the subsidiary reached the quality and performance standards. (Dorrenbacher, 2004).To manage and coordinate extensive operations, cumbersome and costly infrastructures are being designed by multinational companies. The typical headquarters organization becomes more superior and authoritative, as the coordination and control job expands whereas the nationwide subsidiaries regarded as pipelines for centrally developed strategy and products. (G, 1986) Berkshaw and Morrison (1995) argues that it is certainly a possibility that most of the ideal types of other typologies can be placed in three categories as briefly described below: Local implementer: This role is restricted or localized in its truest sense; this restriction can be based on geography or product line. The role is for the implementation of a global product to the local market. A classical example of this case can be the phenomenon of franchising such as KFC or McDonalds, whereby the global product is deployed locally by the franchisee entity that can also be termed as a local implementer. Specialized contributor: As the name suggests, this is mainly for a specialized function or activity, where the functional activities are tightly coordinated amongst various subsidies. This role can be seen in various activities that take place globally; for example, if NOKIA plans on entering in a market with its corporate setup with sales and services support, and plans to hire an existing player in the market, not going through franchising but via a joint venture, the subsidiary can be termed as a specialized contributor. World mandate: This has a global or regional perspective or any point that lies beyond the scope of a local function or restriction. The major function is to work in correspondence with the headquarters for developing strategy on a non-localized or global perspective. A classical example of this case is the outsourcing, for instance, of a call centre; whereby, the call center is involved in rendering services, while at the same time, the heads of the call center are in constant contact and collaboration with the headquarters to ensure that the global sellers of the product are giving out the information in line with what the call center states. Other than the roles described above, there are a few major challenges that subsidiaries must look forward, as dealing with these challenges would give them a cutting edge; these are: Competitiveness: Maintaining competitiveness is a challenge at two levels; i.e. locally and globally. For instance, KFC in a region would be competing with local competitors as well as KFC in another region. Collaborative ness: Cross country, cross industry, cross functional, and other forms of crosses for collaboration is essentially critical Organizational issues: Settling organizational issues is another critical challenge because the rules of the parent firm as well as those locally deployed have to be entertained. Apart from these challenges, the subsidiaries must keep the following as their strategic goals: Global efficiency: Being the most efficient global subsidiary of a global brand should be a strategic goal of a local subsidiary. Multinational flexibility: The localized version should have the flexibility to be indulged in a multinational environment. Worldwide learning: Another strategic think point should be to deploy world wide learning practice, learning from all possible nodes and points that may arise due to strategic partnership in a globalize venture. In general, the ecological eventuality perspectives which is a basis of the underlying principal behind the global integration of economies, depends on the typology of the operations of business organizations. The development in the various typologies and the corresponding subsidiaries carry consequent structural frameworks and strategic planned activities which aim towards the accomplishment of the goals of integration. References David C, J. L. (2008). Typologies: Forming concepts and creating categorical variables. In H. E, Handbook of political methodology (pp. 153-163). Handbook of political methodology. Dorrenbacher, C. (2004). Subsidiary upgrading strategic inertia in the development of German-owned subsidiary in Hungary. Copenhegan. G, C. A. (1986). Tap your subsidiaries for global reach. Harvard Business Review , 88-94. J, R. (2009, April 13). A core typology of organizational environments. K, D. (2005). Typology of organization process. Engineering Economics , 36-39. Read More