Section outline

  • Unit Objectives 

    Formal and Informal Coordination Mechanism 
    1. Understand formal and informal coordination mechanisms
    2. Explain the selection of coordination mechanisms

    International Organization 
    1. Understand the importance of appropriate organizational structures to effective strategy implementation.
    2. Become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm.
    3. Appreciate the role of “human networks” in achieving business goals.
    4. Realize how organizational design affects manager’s job, for example, on the level and location of decision making.
    • Coordination Mechanism (14:12) Page
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      As has been discussed already, MNCs are characterized by internationally dispersed activities. To integrate all of an MNC’s activities and organizational units under a common strategy, coordination is needed. This video focuses on the main coordination mechanisms, including their strengths and shortcomings.


    • Types of organizational structures (5:24) Page
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      Organizational structures describe the formal design of the resources and responsibilities. Different organizational structures lead to different behaviors of employees, because the structure and subordination in hierarchies define the focus of work as well as the official channels of knowledge transfer. The aim of this and the following videos is to review the basic types organizational structures that most students will be familiar with, here in the light of international business.


    • Function, product and area structures (8:46) Page
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    • Matrix and hybrid structures (5:58) Page
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    • Stages Modell by Stopford and Wells (4:57) Page
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      ♦ ♦ ♦ Did You Understand? ♦ ♦ ♦

    • 10. Self Assessment Quiz
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    • McKinsey Case questions Page
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    • Mc Kinsey Case Questions Etherpad Lite
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    • Students must
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      ♦ ♦ ♦ Exercise Materials ♦ ♦ ♦

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      ♦ ♦ ♦ Recommended Readings/Resources (optional) ♦ ♦ ♦

    • Students must
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      Reading: Morschett et al. (2015) Chapter 10, p. 233-245, Chapter 11, p. 255-268, Cavusgil et al. (2016)  Chapter 11, p. 330-340, Deresky (2017) Chapter 8, p. 306-328.