InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Instructor Manual
Chapter 15: Structuring and Organizing the MNE
to accompany Mike Peng & Klaus Meyer: International Business, Cengage Learning
Prepared by Klaus Meyer
version February 2011
Introduction to the Topic
Learning Objectives
1. articulate the relationship between multinational strategy and structure
3. explain how institutions and resources affect strategy, structure, and learning
5. draw implications for action
General Teaching Suggestions
This chapter introduces key organizational changes faced by multinational enterprises,
including the organizational structure and the challenges of knowledge management. It thus
addresses issues of key concern to the leadership of multinational enterprises, and thus
debates that middle managers (i.e. your students after graduation) are likely to become
Opening Case Discussion Guide
The opening case outlines the operational challenges faced by the big multinational
consultancy firms, who are expected to deliver services that draw on a variety of distinct
competences located at different sites around the world. To motivate a discussion, you as
instructor may ask: “French MNE Renault asks you to audit your accounts in the US and
advise how to better integrate accounting practices across its global operations. How are you
going to assemble the team for this customer contract?”
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Chapter Outline, Section by Section
Section 1: Organizational Structures in MNEs
Key Ideas
This section introduces the well-established Bartlett and Ghoshal terminology of four strategy
Key Concepts
integration-responsiveness framework
A framework of MNE management on how to simultaneously deal with two sets of pressures for global
integration and local responsiveness.
localization (multidomestic) strategy
A strategy that focuses on a number of foreign countries/regions, each of which is regarded as a stand-
alone “local” (domestic) market worthy of significant attention and adaptation.
global standardization strategy
A strategy that relies on the development and distribution of standardized products worldwide to reap
the maximum benefits from low-cost advantages.
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
around the world.
country or regional manager
The business leader of a specific geographic area or region.
global product division
An organizational structure that assigns global responsibilities to each product division.
Section 2: Management Knowledge in Global Firms
Key Ideas
This section outlines the challenges for MNEs to manage knowledge creation and sharing
within their global operations, and introduces Nonaka’s typology of knowledge as an
analytical tool (Figure 15.6).
Key Concepts
knowledge management
The structures, processes, and systems that actively develop, leverage, and transfer knowledge.
organizational (team embedded) knowledge
Knowledge held in an organization that goes beyond the knowledge of the individual members
communities of practice (CoP)
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Groups of people doing similar or related work and sharing knowledge about their practices of work
virtual communities of practice
Communities of practice interacting via the Internet.
social capital
The informal benefits individuals and organizations derive from their social structures and networks.
Section 3: Institutions and the Choice of Organizational Structure
Key Ideas
This section considers how institutional frameworks in home and host countries affect firms
choice of organizational structures.
Key Concepts
Section 4: Resource-based Considerations
Key Ideas
Section 5: Debates and Extensions
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Key Ideas
The first debate concerns the nationality of top management teams, and the implications for
the management of the corporation. This is further illustrated in In Focus 15.3.
Section 6: Implications for Practice
Key Ideas
This concluding section emphasizes the need to understand external and internal rules
governing managerial action, along with the need to develop capabilities to manage
innovation while ‘thinking global, acting local’.
Key Concepts
No new concepts
Review Questions
Review questions are provided to students on the website accompanying the book. They
directly ask to summarize the material provided in the text. Instructors may also use the
questions to structure their lectures or review sessions.
Review Questions
(as provided to students on the website)
Material in the Book
1. What are the operational challenges faces by
accountancy and consultancy firms serving
customers operating worldwide, known as “global
key accounts”?
Opening Case
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
strategy identified by Bartlett and Ghoshal?
5. What are the challenges of operating in a matrix
structure?
8. How do knowledge flows vary across Bartlett &
Ghoshals four types of MNE strategy?
9. How do MNEs engage with local and virtual
communities of practice?
12. How do home country institutions shape the
organizational structures adopted by MNEs?
13. How do host country institutions shape the
organizational structures adopted by MNEs?
14. How do the nature of a firm’s resources and
capabilities affect its preferred organiational
structure?
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Critical Discussion Questions
At the end the chapter, we provide discussion questions that aim to stimulate students
thinking beyond memorizing the material learned in the chapter. They are designed to be
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
used at a basis for in-class discussions, group work, or individual assignments. Below, I
provide some indicative answers of issues that may be raised in response to these questions.
Discussion Questions
(as provided in the book)
Indicative Responses
1. In this age of globalization, some gurus
argue that all industries are becoming
global and that all firms need to adopt a
global standardization strategy. Do you
agree? Why or why not?
3. You are a corporate R&D manager at
EADS and are thinking about transferring
some R&D work to China, India, and
Russia, where the work performed by a
€70,000 German, French or Spanish
engineer reportedly can be done by an
engineer in one of these countries for less
1. The arguments presented in this
book emphasizes opportunities
that arise from interacting across
differences around the world.
While global standardization
3. This is an ethical question where
many different approaches could
be argued, and emphasis should
be the rigour of the arguments.
Note that EADS sells a large
share of its products (i.e.
military) to governments where
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
What are you going to do?
4. Some companies organize or support
social events such as an annual party,
sports competitions or art exhibitions that
competitive commercial airline
businesses.
4. This question challenges students
to demonstrate their
Closing Case
The closing case provides further opportunities to apply ideas and concepts learned in this
chapter in a real world setting. The Closing Case for this Chapter is “Akzo Nobel Decorative
Coating” and focuses on the relationships between subsidiaries and headquarters, and how
subsidiaries may influence headquarter decisions. Below are some indicative responses to the
case discussion questions.
Case Discussion Questions
(as provided in the book)
Indicative Responses
1. From a resource-based view,
why did ANDC pursue multiple
acquisitions in China?
These questions challenge students to demonstrate
their ability to think and argue strategically.
1. This is a case of multiple acquisitions
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Further Learning Activities
In addition to the cases and discussion questions provided in the book, instructors may want
to use any of the following activities to further engage students with the material.
1. Carlos Ghosn (featured in In Focus 15.3) was interviewed on the BBC Worldservice
2. Currently, considerable growth has been documented in Latin American and
Caribbean economies. Based on the specific regulations in each country, part of your
company’s strategy in the Western Hemisphere is to ensure that contracts made by the
firm are agreed to and abided by in all business dealings. Since your company has
sales offices in every Latin American and Caribbean economy, where should your
company focus first? Provide detailed justification for your choices.
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
globalEDGE™ Tags: Multi-Country
3. To remain competitive, a steel company needs to reconfigure its operations to align
with worldwide production. As a consultant on world steel production, provide a
report that indicates appropriate personnel and resource allocation to each region of
the world. As a part of your analysis, be sure to include your analysis for specific
countries in which your client should maintain regional headquarters.
Errors and Corrections
The sources for the Opening Case have been cut off in the middle of a source. The missing
information is as follows: “… borders: The case of global resource management in professional
service firms. Human Relations, 62: 829–850.”
Further Readings
At the end the chapter, suggested further readings are provided. The primary aim is to
provide students a starting point for further work, for example when preparing a class
assignment or dissertation. These references also are recommended for instructors not
familiar with the topic and wishing to ‘get ahead of the students’ before lecturing on a topic.
C. Bartlett & S. Ghoshal, 1989, Managing across Borders, Boston: Harvard Business School Press – classic
book outlining the integration responsiveness framework and its implications.
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Company, London: Wiley – essays in memory of Sumantra Ghoshal, exploring various aspects of how
best to manage a multinational company, and the integration-responsiveness framework in particular.