Nestle
10-11
Your firm organized its foreign operations in an international division. With foreign markets growing fast, the firm considers changing its organizational structure. What options does it have? What are the pros and cons of each option?
Figure 1
Figure 1 illustrates the relationship between each elements of organizational architecture. Hill et.al (2012) identifies these elements one by one.
Organization structure means three points. First, the formal division of the organization into subunits, such as product divisions, national operations and functions; second, the location of decision making responsibilities within that structure; third, the establishment of integrating mechanism to coordinate the activities of subunits including cross functional team and pan regional committees.
Control system is the method to measure the performance of subunits and to judge the managers when running those subunits. Incentives are used to reward appropriate managerial behavior. It is close connected with the performance.
Processes refers to the manner in which decisions are made and work is performed within the organization.
Organizational culture refers to the norms and value systems that the employees of an organization share.
People here means both the employees of the organization and the strategy used to recruit, compensate and retain those individual and type of people with skills, values and orientations.
Organizational structure
The organizational structure has three dimensions: vertical differentiation, horizontal differentiation and the integrating mechanisms. Each dimension will be explained below.
Vertical differentiation
The vertical differentiation indicated the location of decision making responsibilities within a structure. The vertical differentiation has two types of arguments: centralization and decentralization. There are four main arguments for centralization. First, centralization can facilitate coordination. An example might be a
Your firm organized its foreign operations in an international division. With foreign markets growing fast, the firm considers changing its organizational structure. What options does it have? What are the pros and cons of each option?
Figure 1
Figure 1 illustrates the relationship between each elements of organizational architecture. Hill et.al (2012) identifies these elements one by one.
Organization structure means three points. First, the formal division of the organization into subunits, such as product divisions, national operations and functions; second, the location of decision making responsibilities within that structure; third, the establishment of integrating mechanism to coordinate the activities of subunits including cross functional team and pan regional committees.
Control system is the method to measure the performance of subunits and to judge the managers when running those subunits. Incentives are used to reward appropriate managerial behavior. It is close connected with the performance.
Processes refers to the manner in which decisions are made and work is performed within the organization.
Organizational culture refers to the norms and value systems that the employees of an organization share.
People here means both the employees of the organization and the strategy used to recruit, compensate and retain those individual and type of people with skills, values and orientations.
Organizational structure
The organizational structure has three dimensions: vertical differentiation, horizontal differentiation and the integrating mechanisms. Each dimension will be explained below.
Vertical differentiation
The vertical differentiation indicated the location of decision making responsibilities within a structure. The vertical differentiation has two types of arguments: centralization and decentralization. There are four main arguments for centralization. First, centralization can facilitate coordination. An example might be a