INTRODUCTION

1. INTRODUCTION • Multinational managers must deal with organizations from different societies • Each society provides a unique national context for the design of organizations

2. KEY ISSUES IN COMPARATIVE ORGANIZATIONAL DESIGN • What makes organizations from different societies • Alike? • Different?

3. CONVERGENCE • The increasing similarity of management practices WHY CONVERGENCE? • Growing similarity of customer needs • Growing levels of industrialization and economic development • Global competition and global trade

4. THE CULTURE FREE HYPOTHESIS • Regardless of national culture, organizational design depends to on the organizational context (size, technology)

5. SOCIAL INSTITUTIONS • Encourage managers to develop structures and processes that match institutional requirements • Example: U.S. laws regarding monopolies prevent U.S. organizations developing large conglomerate structures

6. NATIONAL AND BUSINESS CULTURE • Pervasive and taken-for-granted aspects of culture influence preferences for certain designs • Most managers also design organizations purposefully to fit local cultural expectations

7. ORGANIZATIONS ALIKE AND DIFFERENT: SUMMARY OBSERVATIONS • Global trade/investment with its increasing contact among managers of all nationalities leads to convergence • Similar technology/size leads to similar structures, regardless of nationality • In spite of the trend toward convergence, extensive differences still exist among organizations from different countries.

8. CONTROL MECHANISMS • Link the organization vertically • Five broad types of control: • personal • output • bureaucratic • decision making • cultural

9. NATIONAL CULTURE AND ORGANIZATIONS • Hofstede: power distance and uncertainty avoidance the most important • Influence basic problems of organizational design--differentiation and integration

10. ADHOCRACY • Low power distance + low uncertainty avoidance = adhocracy • Fits cultures where people can tolerate ambiguity and have less need for formalized rules and regulations

11. THE ADHOCRACY DESIGN • Vertical and horizontal differentiation: fewer levels and wider span of control • Control mechanisms: mutual adjustment • Decision making: Participative or consultative

12. PROFESSIONAL BUREAUCRACY • Small power distance + high uncertainty avoidance norms = professional bureaucracy

13. THE PROFESSIONAL BUREAUCRACY DESIGN • Vertical and horizontal differentiation: moderate levels • Control mechanisms: standardization of skills. • Decision making: centralized decision making

14. FULL BUREAUCRACY • High power distance + high uncertainty avoidance = full bureaucracy • Full bureaucracy is the most formalized of the Hofstede organization types

15. FULL BUREAUCRACY DESIGN • Vertical and horizontal differentiation: Tall pyramids and narrow spans of control • Control mechanisms: Standardization and a high degree of formalized rules • Decision making: Highly centralized

16. FAMILY BUREAUCRACY • Occurs in countries with large power distance norms and low uncertainty avoidance norms. • It most parallels an extended family with a dominant patriarch or father figure.

17. FAMILY BUREAUCRACY DESIGN • Vertical and horizontal differentiation: small and low specialization • Control and coordination mechanisms: direct contact • Decision making: highly centralized

18. THE JAPANESE KEIRETSU • Web of trading partners • Financial networks revolve around major banks- e.g. Mitsubishi. • Production networks revolve around user and supplier relationships

19. INSTITUTIONAL FORCES SUPPORTING KEIRETSU: • Historic- zaibatsu • Close links between government and Japanese industry create coercive pressures

20. THE KOREAN CHAEBOL • Family-dominated and multi-industry conglomerates • Dominate much of Korean business • Close relationships with banks for financing

21. DISTINCT ORGANIZATIONAL FEATURES OF CHAEBOL • Extensive family control • Paternalistic leadership • Centralized planning - reports directly to the chairman • Close connections with the government

22. INSTITUTIONAL PRESSURES SUPPORTING CHAEBOL • Coercive isomorphism - government support dominated the founding and growth of the Korean chaebol • Recent government policies

23. THE MODERN PUTTING-OUT ORGANIZATION IN ITALY'S MODENA REGION • Manufacturer "puts-out" raw material to independent companies • Companies assemble the goods, usually in homes • Manufacturer then retrieves the assembled goods

24. INSTITUTIONAL SUPPORT • Economists consider the system archaic but it thrives - why? • Supported by legal and political institutions • State-subsidized loans to $100,000 • Freedom from some labor and social security laws

25. INSTITUTIONS AND DESIGN: SUMMARY OBSERVATIONS • The Italian example: institutional support networks of small family-owned companies • The Japanese keiretsu/Korean chaebol: state provides a coercive environment