internAtional business 1- In your own words define what an organizational struct
ID: 1096732 • Letter: I
Question
internAtional business
1- In your own words define what an organizational structure is?
2- What are the differences between vertical and horizontal differentiation?
3-A recent trend among MNEs is to replace expatriates in foreign subsidiaries with local managers. What are the implications of that policy from the standpoints of (a) the development and implementation of global strategies, (b) the control of foreign subsidiaries and (c) the development of managers with significant international experience and expertise. B) Does it mean decision making will necessarily be decentralized?
4- India and China are both very large emerging markets that are becoming increasingly important in many MNEs
Explanation / Answer
1. Organization structure is defined as a system which is used to describe the hierarchy of work classfication within an organization. It further defines each job, its function and further the reporting point for each person within the organization. Organization structure further establishes ways to determine the organization's operations ans also assists the organization to achieve its goals and additionally paves way for future growth. The organization structure can be diagramatically presented using an organization chart. Organization structure can be classified into various types like: Functional, Divisional, Geographical and Matrix.
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2. Differences between Vertical and Horizontal Differentiation are as follows:
Vertical Differentiation: Products that are differentiated based on quality is termed as Vertical differentiation. When retail or supermarket stores arrange their products based on higher to lower quality then the shop is practicing vertical differentiation.
Example: When stores arrange similar products based on quality , like they will arrange different brands of speaker sets in the same line but when we get near and observe the quality, it will definitely vary based on the price offered for the product. Further when a product is differentiated based on the type of features available then it is verticla differentiation
Horizontal Differentiation: When a product is differentiated based on the number of additional features available, then it is horizontal differentiation.Each product is sold to customers with different purpose who come with different needs. For example, a line of bi-cycles that has more features at the high end than at the low end is differentiated vertically, while a line of bi-cycles that come with different types of features, such as standard versus automatic transmissions, is differentiated horizontally.
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3 (A). Most of the multi-national enterprises have started to replace all its expatriates with local managers and the implications of the same from the standpoints of the developments and implementation of global strategies are as follows:
a. Local Manager will lack exposure to Internationsl standards and hence mayu show his apprehension against some major planning.
b. Development may be restricted since the technology is with the Ex-Patriate. Hence growth will get affected.
c. Local customers can be attracted easily.
3(b). Control of Foreign Subsidiaies:
a. The inflow and outfow of foreign currency will be resticted.
3(c). the development of managers with significant international experience and expertise.
Yes, when managers are not sent as expatriates, they will not know the culture pevailing in the host country and also the intricacies in the host country. The manager will aso lack International experience and expertise.
3(B)Yes, decision making will get decentralized due to absence of own company people. Being local managers there will not be given enough responsibilty, as the company might want to keep up the word it gives to its customers.
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4(a). The advantages and disadvantages of sourcing from China as opposed to India are as follows:
1. Moderate quality
2. Good payment terms
3. Timely Delivery
4. Advanced Technology
5. Cheap cost
4(b)The types of products or services that are best suited for sourcing from India versus China? Why?
1. Clothing
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