International Businesses Organizational Structures - Essay Example

? International Businesses Organizational Structures/Models Introduction With the increasing globalization there is increasing inter-connection among the various organizations with each striving to source for plenty talent, goods and services offered by other organization spread all over different location of the world. This is because every organization wants to have a new way of value creation, acquisition of more customers, investors and partners. Given that these organization’s operation is outside and across traditional industry boundaries these has lead to concerted effort on innovations with more focus being witnessed in development of business models to help provide identity and direction. Organizational structures or models can be described as the ways through which a particular organization organizes the workforce and duties or tasks so as to remain functional thus attains her set goals. The application of the business models is dependent on the size of the work group and the size of the organization. In small organization characterized with small work groups the models are not pallid, however, in large organization the use of these structures is a must due to the existence of varied task delegations. Factors such as business employee size, revenue, geographical dispersion and the range of the business are the one's determinants of a business structure. This paper describes the various types of business models that are commonly applied by the international businesses, the reasons for their application, advantages and disadvantages of each business model. The company on which the paper lays focus on is Coca-cola, a beverage manufacturing company worldwide. Thesis Statement For gaining competitive advantage in the global arena organization are sourcing for talent, goods and services from other organizations. This sourcing is informed by the realization of four major business models; hence, they are important in international business operation. Business Model Types As mentioned earlier on there are different business structures that are put in place as a result of task delegation by organization in an effort to meet set targets or goals. These structures are the basis of job grouping that are in turn shape respective organizations, they include global product, Area, Functionality and customer. Each of them is described below. Global Product model Global product or product development refers to means used by an organization in maximizing her financial and operational productivity of the process itself. According to PTC white paper it involves spreading of product development activities in various regions worldwide in order to improve on the value-added cost. These activities run from marketing activities to activities such as design, analysis and new idea generation. A large and diversified company like Cadbury is organized according to the products. Here, all activities pertaining production and marketing of a product or groups of the same product are put in the same group where the top most manager of the product group is bestowed with autonomy over the operation. This means that all the personnel in the group have ample time to fully attend to their particular product line needs, hence, expertise in the line’s development, production and distribution. In an effort to safeguard the process from unnecessary disruption the Cadbury allow for evolution of different units or product lines moving from one level to another towards global market distribution and finding balance between cost and added value. At level 1 there is no product development activity distribution, at level 2 some elements of product distribution is achieved but no strategy, at level 3 strategies for global product distributing are put in place with discrete supportive activities. At the fourth level the company out aggression identifies the particular sets and accompanied responsibilities to offshore Markets. Cadbury Egypt does the same for her chocolate bars by producing then sending to Cadbury Kenya where the latter does the marketing and selling due to her rich market This model is not without shortcomings such as weak financial muscle to involve such an exercise for small companies while for larger companies there is likelihood of duplication of resources, thus the group leader is required to decide on the affordable redundancy. Geographical Area/scope structure Organizations with a wider geographical area are advantageous in geographical organization since all the regional activities are managed together. Although the model is across regions failure to physically separate the activities can be an undoing in coordination role. An advantage with this model is that given the product are foreign same as the company it is easier to penetrate the market as there are different requirements in different regions. For instance marketing of bar chocolates in United Kingdom has different requirements in marketing the same product in Kenya where according to the 2009 Census results a majority of the populations youth and in general the female gender is the largest and is believed females constitute the largest consumers of chocolate. It is advisable for businesses with global market to adopt a geographical structure to help in the identification of viable markets. This achieved through training of top managers who are sent into this markets. One important aspect of training would be on pre-departure. With growing globalization, organization too are becoming globalized a move that is increasingly challenge some given that use of expatriates on international assignments is now necessary. These individuals are helpful in to an organization mission of completing strategic and critical tasks internationally. The multinational corporations are embracing use of expatriates for many reasons such as corporate control and expertise reasons in the global markets, entry points into new markets, development of international management competencies (McNulty & De Cieri, 2011). Although it has been common knowledge that Human Resource Management especially concerning international geography comes with many complexities, there is a new form of challenge that is slowly picking momentum, the human resources management at international level, which is believed that it determines the functionality and stability of a business at the international arena. The lack of communication and coordination by the multinational corporations internationally has invited crises into their way. Some of these crises include unattended to assignments which are because of expatriates returning prematurely and poor repatriation (Reiche & Harzing, 2010). Any signs of poor expatriate management pauses a threat to the performance and capabilities of an organization at the global arena. Expatriate management challenges only can be avoided if intern national human resource mangers effectively plan for the selection of individuals for overseas assignments, availing jobs for returned expatriates in their mother countries. Functional structure This type of structure involves the grouping of working staff according to specific tasks performed where for example there will be different departments such as the human resource, supply chain, finance that are usually managed independently. This brings in efficiency thereby promoting expertise. Some of the limitation to this model is individuals with more than one skill not being contended with the structure thus instead of focusing in strengthening the department they look at the organization as a whole. In addition, a challenge is the management of the growing size of the company into different regions. Customer Organizational Structure Some organizations find it necessary to organize themselves according to then type of customers it has. The customer is the king, hence, changes amongst the consumers have forced many organizations to develop a certain unit of their marketing department to read and respond to what customers prefer. The consumer behaviors will determine what the organization will provide and at what quantity. Different theories are also kept into context as well to create a framework and provide means and recommendations to organization in an effort to create a better way on carrying out business. The consumer is considered the key component towards the success of a given business. They tend to develop either cultures that if not adopted by the service providers may lead to the organization collapsing or providing services that are not up to standards. The major cultures amongst these consumers are common since they are laid down and entail the participation of the consumer in relations to changes effected by the producers and suppliers of a given product. They tend to ask themselves, what does the service providers offer different and will it cost extra? The other questions mainly include is It worth it. Providers will tend to react according responses, thus, forming the basis of the paper. Conclusion In summation, International Human Resource Management departments should realize that the for the purpose of gaining competitive advantage in the global arena the organization has to source for talent, goods and services from other organizations four business models impacts positively on the performance of the organization’s international assignments. Reference Reiche, B.S. & Harzing, A. (2010). International Assignments. International Human Resource Management (3rd ed), London: Sage. Monkol, K. (n.d)Crucial Selection Criteria of Expatriates and Overseas Performance in Emerging Markets: The Case of Thai Smes, Retrieved November 2, 2013 from http://www.ipedr.com/vol39/016-ICITE2012-B00031.pdf McNulty, Y & De Cieri, H. (2011). A critical review of approaches to measuring expatriate return on investment. In proceedings of the Austrian and New Zealand Academy of International Business Conference, Melbourne Australia, 28-30 April 2011. “Gaining Competitive Advantage through Global Product Development”. PTC. Retrieved November 3, 2013 from http://www.aia-aerospace.org/assets/smc_wp-competitiveadvantage.pdf Read More