Schedule of student’s output №9

Before readingthe text answer the following questions using the active vocabulary.

1. What do you know about different types of organizational structure?

2. What are the advantages and disadvantages of each type?

A good organizational design should satisfy three criteria. First, it should allow the firm to realize the benefits that can be derived from the division and specialization of labor. Second, it should provide for stability and continuity of the firm’s selling efforts. This can be best be accomplished by organizing activities and not people. Third, it should produce effective coordination of the various activities assigned to different persons in the sales force and different departments of the fi rm. A key question concerning organizational design is “What happens if you have the wrong structure, and what are the warning signs?”

With the wrong structure, mangers increasingly make the wrong decisions. Multinational enterprise managers have to make decisions what products to produce, what quality standards to set, how to reduce costs, how to advertise, how to position products against competitors, and the like across the globe.

In the absence of timely, relevant information, effective decisions are unlikely. The more complex the decisions, the more information that is generally needed. Inappropriate organizational structures block needed informational sharing, focus attention away from information that needs to be gathered, and consequently, hurt decision quality, organizational prosperity, and perhaps even survival.

Given that inappropriate organizational design and structure can severely inhibit organizational effectiveness, what are some of the key warning signs that a mismatch exists?

One of the first warning signs is the decision maker’s inability to anticipate problems. If problems caused by competitors, governments, customers, suppliers and so forth consistently arise without advanced notice, this is a warning sign that the organizational structure is inhibiting environmental scanning, data gathering, or information dissemination. To the extent that the organization is not designed or structured to correct this problem, decision makers will have to react to – rather than anticipate – the environment and will be placed at a competitive disadvantage relative to other organizations with appropriate structures.

Another key warning sign is an increase in confl ict that prevents decisions from being effectively implemented. This sign, in particular, can indicate that the limits of the global functional structure are being stretched and that the information exchange mechanisms, such as cross functional teams or liaisons and other lateral relations, are needed.

There may also be signs at the individual level. When the number of individuals who do not know what is expected of them (high role ambiguity) or who receive conflicting expectations (high role conflict) increases, this is an early warning sign that the organizational structure is not appropriate for the environment. In general, the higher the level of individual role ambiguity and conflict and the larger the numbers of individuals experiencing these problems, the more severe the mismatch between the organizational structure and its environment.

Designing multinational enterprises is one of the most critical activities of global executives. It is important to keep in mind that inappropriate structures and designs restrict the timely flow of needed information and consequently hurt strategic decision making. By understanding the aspects of the international environment of business that affect structure, executives can more effectively formulate and implement global competitive strategies and design the organizations for competitive advantage.

Exercise 1. Answer the following questions:

1. What decisions do multinational enterprise mangers have to make?

2. How does the wrong organizational structure affect the decisions?

3. When is the issue of information especially important?

4. What is the fi rst warning sign of the inappropriate organizational design?

5. Which conflict increases when the structure of organization is inappropriate for the environment?

6. What do individuals experience in the organization with the wrong structure?

7. What is one of most critical activities of global executes?

Exercise 2. Mark these statements T (true) or F (false) according to the information in the text. Find the part of the text that gives the correct information.

1. A good organizational design should provide for stability and continuity in the firm’s selling efforts.

2. Multinational enterprise mangers have to make a lot of decisions.

3. In the absence of relevant information effective decisions are probable.

4. Complex decisions don’t need much information.

5. Inappropriate organizational structure can restrict organizational effectiveness.

6. If the organizational structure is wrong the decision makers can easily anticipate problems.

7. Individuals don’t understand their tasks clearly when there is a mismatch between the organizational structure and its environment.

Exercise 3. Chose one of the words or phrases that matches the sentence best.

1. An organizational structure that blocks information sharing is …

a) inappropriate

b) important

c) unlikely