Author Question: What are the typical levels a firm goes through with regard to its organizational design as it ... (Read 41 times)

bcretired · **on:** Jul 7, 2018

What are the typical levels a firm goes through with regard to its organizational design as it transitions from domestic to international to global? What are the three managerial philosophies that guide organization design? Briefly explain when each

philosophy is appropriate.
What will be an ideal response?

Question 2

Repatriated managers experience change and uncertainty as they adjust to returning home after a foreign assignment.

Indicate whether the statement is true or false

briseldagonzales · **Reply #1 on:** Jul 7, 2018

Answer to Question 1

If a firm is participating in indirect exporting, it does not need to change its organizational design. When the firm first begins to export, it can use a corollary approach. This means the firm assigns any tasks related to the international business to some existing department. When the export business grows to an extent that other departments cannot manage sufficiently, the firm will move to an export department approach. In this situation, the department will handle the international business while the other divisions operate as before. Eventually, more knowledge of foreign markets will be necessary and the firm will develop an international division. As the firm evolves from being domestically oriented with international operations to becoming a true multinational corporation with global aspirations, it will usually create a global organization design. The precise design will depend on the relative importance of area knowledge, product knowledge, and functional knowledge within the firm. MNCs typically adopt one of three managerial philosophies that guide their approach to organization design. The ethnocentric approach is used by firms that operate internationally the same way they do domestically. The polycentric approach is used by firms that customize their operations for each foreign market they serve. The geocentric approach is used by firms that analyze the needs of their customers worldwide and then adopt standardized operations for all markets they serve.

Answer to Question 2

TRUE