FVC1 GB Ch 9 "Control of Global Business" – Flashcards

- A company defines it's overall goals - outlines why the company exists and what it strives to accomplish - provide general guidelines for the co's strategy formulation and decision-making processes (a blueprint) - not all mission statements do, but many mission statements can have an overall stakeholder (employees, customers, community) or shareholder (owner) orientation

To determine appropriate "control systems" for the given global business

It then has to IMPLEMENT that strategy

Very short-term (less than one year) plans formulated for implementing strategic goals

One-to three-year plans formulated for implementing strategic goals

quite short-term strategy implementation - zero to three years [Longer-term strategy implementation involves global companies deciding whether they want to be "prospectors", "defenders", "reactors" or "analyzers"]

Miles and Snow's four-part typology: 1. Prospectors - organizations that have basic strategic implementations involving extending their successes through global expansions, and finding NEW market opportunities 2. Defenders - implement basic market strategies of concentrating upon EXISTING operations and defending their home turfs 3. Reactors - those that have strategic implementation processes that RESPOND to strategic actions initiated by competitors (at times this approach can be seen as inconsistent and unstable) 4. Analyzers -companies that take a MIDDLE GROUND between being prospectors and defenders (expand or defend, depending on the situation)

Next step is to determine how best to coordinate it

[impediments to coordination of strategy abound: legal, political, economic, technological, and other] -The role that knowledge management and systems play is that the internet, email w/ attachments, etc is making it much easier to overcome locational and communication impediments to coordinating strategy -New technology is making it easier to disseminate both tacit and explicit knowledge to subsidiaries and other global affiliates (via web training, emails, etc), and transforming tacit knowledge into explicit knowledge (which organizational control often hinges on)

The ability to recognize the value of new knowledge, as well as assimilate and apply it; the internet is aiding global business in this

Control systems: - bureaucratic controls - interpersonal controls - output controls and measurement

- BUREAUCRATIC CONTROLS: systems of rules and regulations that are promulgated within a global business, i.e. "everyone including CEO flies coach", phone rules, etc...can play an important role within organizational risk mgmt (banks having 2 loan officers approving loans above certain $ amt, etc)...financial budget (how much a unit can spend) - INTERPERSONAL CONTROLS: involve execs engaging in personal contact with subordinates as a way of managing an organization; complete interpersonal control, tho, works best in smaller organizations - but many CEOs make a major effort to meet one-on-one regularly w/ all senior mgrs and business unit heads - or, using company town hall meetings to maintain top to bottom contact - OUTPUT CONTROLS AND MEASUREMENT: involve establishing specific goals on given metrics and then measuring to what extend these goals have been achieved at certain time intervals (e.g. - quarterly? annually?)...several areas where they can be put into practice: profits, growth, productivity, market share, quality control, corporate social responsibility [a key OUTPUT metric for some global biz's is MARKET SHARE, but should be aware of anti-trust laws!...also, a quality control is Six Sigma - only 3.4 mistakes per million]

Represents the "personality" of a given organization, its shared norms, and values; can be an extremely POTENT type of control system, exp when cultural norms are fully accepted by the org's workforce

- if a global biz has strong/accepted cultural norm that employees do only the highest quality of work, it may not be NECESSARY for supervisors to constantly monitor their work quality (aka, New York Times' journalists have so much pride working there, it motivates them to provide quality work) - If social pressure exists (aka Google /"Don't be evil") on employees, it may act as a control apart from formal rules/regs - Bernie Madoff's culture of corruption (cocaine/sex) was far-reaching, and management (Bernie himself) set the standard from the top, down - but in multinational or global co's, this kind of norm may be difficult to accomplish (due to different types of operating divisions and business units - hard to establish uniform culture throughout the org) - where there are clashes within a given org's culture, or if there are threats to this culture in the future, it typically will not work as an effective organizational control system

(used when there are clashes within org culture and norms) - Represents the implementation of a different business or cultural path for an organization - many time, most effective when pushed from the top by CEO or other mgmt A CEO who is both a trusted insider and someone who brings an 'outside' or different perspective to the operations may be the type of individual who can most effectively engender positive organizational change