978-1259317224 Chapter 10 Part 3

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 10

This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This

document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

6. It is obvious that in formulating new strategies, management may uncover a need to

change its organization. Can you describe some situations in which the reverse may be true?

7. In choosing whether decisions will be made by the parent company or by its

subsidiaries, what should management consider when equipment and products are

standardized worldwide? What about when they are tailored to individual national

circumstances and markets?

8. Regarding issues of control in an international company:

9. What measures can be utilized to control subsidiaries that are less than 100 percent

owned by the firm, or joint-venture partners in which the firm has no ownership?

10. Some companies use the same control systems for each unit or operation worldwide.

For example, Starbucks, Kentucky Fried Chicken, or McDonald’s apply the same rigid quality

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International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 10

controls throughout all aspects of their organizations, even as they expand internationally.

Why would a company impose rigorous corporate quality standards, regardless of the

country in which it operates? What modifications in these quality standards, if any, should

the company permit because of differences across nations or regions of the world? Why is the

MINICASE: Connect All, Inc.—Must It Reorganize?

This mini-case provides an opportunity for students to examine a situation in which the

internationalization of a company has raised issues of the appropriate organizational structure

to design and implement in order to enhance the prospects for continued success.

1. How should the company be organized to handle the new foreign production facilities?

How can Connect All reduce the time needed to bring new designs to market?

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 10

BONUS ACTIVITIES (additional resources not in the text)

This section provides you with support of your course above and beyond what’s found in the

text. We have developed these resources to support your course, to support your traditional,

hybrid, flipped, or online class.

VIDEO SUGGESTIONS

McGraw Hill’s collection of international business videos is available on pinterest at

https://pinterest.com/mheibvideos. The content is rich and varied, and it is updated monthly.

You might find it valuable to use the video, “What is a Matrix Organization Structure,” at

“Introduction to Organizational Structure and Design,” at https://youtu.be/NxJvS92uCus.

The video on “Managing in a Global Economy: Organization in International Business,” found at

https://youtu.be/rvNYIW7tTZk, includes discussion of various international organizational

structures, including network and virtual organizations. It also addresses issues of

standardization, coordination, control, and related topics associated with this module.

GlobalEdge and the Academy of International Business provide links to a number of

organizations that offer videos about international business. You can find these links at

https://aib.msu.edu/resources/videodepositories.asp.

TEAM EXERCISES

These may be done individually or in groups or teams, either in or out of class, for later class

presentation. Some are also appropriate for use in hybrid/flipped classroom and online courses.

1. We have had good response from students when we have asked them to analyze why

certain types of decisions should be made by the IC parent company while others should be

made by the subsidiary and other IC units. You can assign this as a verbal report or presentation

in class, to help stimulate learning by peers as well as interesting comparisons. The material in

this module is a good place to start their analyses.

2. Assign students to identify key elements of the operating environment of one or several

international companies in a key industry, such as oil and gas, automobiles, or clothing,

including ones from other nations, as well as the strategies being pursued by the companies.

Then you can ask the students to identify how these elements of the operating environment

and strategy are affecting the way these organizations are structuring their activities, with

particular emphasis on understanding how and why there may be differences in the

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 10

organizational structures being used. These analyses can be shared in class to help initiate a

discussion on the design of organizational structures in international business.

3. Have students report on the types of information that needs to be reported by IC units to

the parent, as well as on appropriate sources of the information that will be reported. You can

have different teams examine different industries or sectors, in an effort to identify whether

and how the information needs may vary and the implications of these differences.

4. Have students analyze an IC to identify its organizational structure, strategic control

issues and methods used in the company. The merger of high end Daimler-Benz and the more

popular-priced Chrysler, Toyota and its recent (2010/2011) automobile recalls, or Volkswagen

and its recent (2015) issues with diesel engine emission software, are examples of potential

topics. Sharing these analyses in class can produce a spirited discussion about how international

environment, competitive strategy, and organizational structures and control systems can often

create challenging situations for IC management..

SUPPLEMENTAL ACTIVITIES

Case Studies

Case studies that focus on international organization design and control are available through

Ivey Publishing and Harvard Business School. Ivey’s catalog is available for browsing (www.

iveycases.com); the cases are downloadable and pricing is in the U.S. $3.50 range. Harvard

Business Publishing (https://cb.hbsp.harvard.edu/cbmp/pages/home) requires an account and

offers free review copies for educators. The case prices begin in the $3.95 to $6 range.

“United Cereal: Lora Brill’s Eurobrand Challenge,” examines the strategic and organizational

challenges faced by the European organization of a large multinational cereal company as it

struggles to identify the best was of structuring and coordinating the introduction of its new

cereal within Europe. This is a Harvard Business School case.

“Bella Healthcare India” describes the challenges faced by subsidiary management in

Bangalore, India, as they attempt to coordinate product development efforts with parent

company units in the U.S. A range of strategic, technical, cultural, and organizational factors

are introduced, providing for a rich discussion of how to effectively structure and control

activities between headquarters and subsidiaries. This Harvard Business School case.

“Philips versus Matsushita: The competitive battle continues,” examines the evolution of

international strategies and structures of two firms battling in the same sector, showing the

challenges of developing, leveraging, and evolving the organizational structures and strategies

of IC within a changing international competitive context, including balancing organizational

design with pressures for local responsiveness versus global standardization. This is a Harvard

Business School case.

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 10

CONTROVERSIAL ISSUES

1. Global Debate: The GLOBAL DEBATE: BigSoft: Should Companies Be Allowed to Profit

from International Transfer Pricing? boxed element described earlier in this module’s

2. IB in Practice: The IB in Practice: Working in a Global Virtual Organization boxed

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 10

This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This

document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

TEACHING SUGGESTIONS

1. This module involves what can be abstract, “big picture” content, so helping learners

appreciate the nature and influence of design and control decisions within international

companies can provide them with a new approach to thinking about business. The use of the

figures and examples is helpful. Examples of organizational design challenges abound in current

business news, including decisions of companies to re-organize (e.g., the opening vignette on

Mondalez and Kraft; Alcoa’s proposal to split into 2 companies, one based on traditional

aluminum production and the other based on value-added aluminum products). It can be useful

to pick one or two recent events and then have students discuss whether and how such events

might impact the organizational design and control decisions of an international company

operating in that industry or closely associated with the industry or activity.

2. Analyze the relationship between where certain types of decisions are made within the

organization and the overall business strategy a firm is using internationally. Then move to why

decisions are best made where they are. (Contrast, for example, retail level international

banking with a retail clothing chain.)

3. To point out the importance for an IC to control activities of its units and efforts around

the world, review the control issues Nike faced in its outsourcing, with child labor and worker

abuse (can search this on the Web, for example). Similarly, it is possible to discuss a variety of

other companies that have encountered control issues with their own or their suppliers’

operations, such as Apple’s recent challenges arising from worker complaint, suicides, and

other issues in its Chinese supplier, Foxconn Technology Group.

4. Guest Lecturer possibilities: Some people who could contribute to the material in this

module would be:

a. Your school’s management and organization people could speak on control and

information.

b. Executives from ICs located near you could add to those subjects.

c. Virtual organizations may be described by local IC managers, or you might bring

such speakers in “virtually” through the use of technology-mediated tools such as

Skype, Adobe Connect, FaceTime, or the like.

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International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 10

CONNECT TOOLS FOR ASSESSEMENT OF LEARNING

Interactive Applications

Assigning Interactives

Consider assigning only 2 interactives per chapter. Interactive applications allow students to see

concepts in practice and assess higher order thinking skills. There are numerous exercises of

different types available. Click’n’drag, video cases, and case analysis are the types you will see

most frequently in this program.

Time-Saving Hints:

• Instructors may want to give students unlimited or multiple attempts on the first few

assignments so the students have a chance to learn and navigate the system before

selecting the option for one attempt only.

• The value of each question should probably be relatively low, since multiple questions

are usually assigned for each chapter. A good rule of thumb would be to make “Quiz

Questions” worth 1 point each and “Interactives” worth 5-10 points each since these

require more time and thought.

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 10

• Feedback given to students is time flexible. Selecting feedback to be displayed after the

assignment due date helps to limit students from giving the correct answers to other

students while the interactive is still available.

Connect Content Matrix

For every chapter, please refer to the Connect Content Matrix to see what application

exercises are available, what Learning Objectives they help reinforce/assess.

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 10

Module

Assignment

Type

Title

Topic(s)

Learning

Objective(s)

AACSB

Accreditation

Tagging

Bloom’s

Taxonomy

10

Drag and Drop

Alternative

Organizational

Structures for

International

Companies

Evolution of

International

Company

Structure

10–02

Reflective

thinking

Understand

10

Comprehension

Case

Organizational

Design:

Merging

Hershey and

Cadbury

Where

Decisions are

Made in

Wholly

Owned

Subsidiaries

10-01; 10-

02

Analytical/

Reflective

thinking

Understand/

Analyze

10

Comprehension

Case

Control in

Wholly- and

Jointly- Owned

Subsidiaries

Where

Decisions are

Made in Joint

Ventures and

Subsidiaries

less than

100% Owned

10-03; 10-

04

Analytical/

Reflective

thinking

Understand/

Analyze