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Reading 4-2: Have you Restructured for Global Success? by Mind Map: Reading 4-2: Have you
Restructured for Global
Success?
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Reading 4-2: Have you Restructured for Global Success?

Different to Transnational Organization

Transnational has different functions in different countriesT-Shaped Structure has even functions split up among countries, requiring a lot of coordinationEach country has its own set of expertise and all together create the best product

Separation

have little communication between country units to divide tasks and exploit local skills

Integration

Function works together in a more integrated way by being physically closer and opening direct communication channels

T-Shaped Country Organization

Localize customer-facing operations and distribute back-end activities across countries

Horizontal line: Connection among countries

Back-end activities like R&D and manufacturing

Vertical line: depth within each country

Front-end activities like decision making concerning the market

In Emerging markets, old structures don't work well

1. China & India are Stars, old developed countries are Cash Cows

Companies need to react accordingly, reacting to consumer demands in C & I instead of just selling modified western products

2. China & India are becoming sources of talent for developing products and processes

Use special knowledge there and integrate into existing expertise Office in Germany contribute what they do best, office in china contributes with own expertise

Segment R&D Vertically

Segment R&D Horizontally

Move to low-cost countries is self-perpetuating

3. People need to realize that with Asian markets playing a bigger role, Asian CEOs should be a common thing as well

Assumption that multinational corporation's intellectual leadership should come from a developed country persists

Falling into the Gaps

Passion Gap

CEO's from developed countries have more passion for their home markets than for Asia, even if they claim otherwise

Ambition Gap

In developed nations, 1-3% growth is okay, in developed nations 25% is expectedWestern companies not willing to make huge investments because short-term performance and thus bonuses would suffer!!

Value-Proposition Gap

different conditions make it hard to enter markets

Product Line Gap

Companies don't invest enough into product lines specifically tailored to emerging markets where consumer requirements can differ a lot from ours

Challenges for top teams

Move people from emerging markets into leadership positions

Move headquarters closer to emerging markets