[ Pobierz całość w formacie PDF ]
actions and aims.
Structuring international operations. It can be unproductive and a
waste of resources to make a new international firm fit existing systems
and procedures. But core management issues such as communications,
structure and leadership are best resolved early. Managers must ensure
that information and expertise flow freely throughout the organisation.
In particular, best-practice information should be widely disseminated
and available for everyone in the organisation.
98
02 Business Strategy 11/3/05 12:16 PM Page 99
MAKING STRATEGIC DECISIONS
Deciding the degree of autonomy given to international business
units is fundamental. Reporting structures, responsibilities and author-
ity levels need to be clear. An organisation benefits from being inte-
grated and cohesive and should be fair and consistent in its practices
and with its employees. Local factors should be taken into account,
but an organisation should be true to its values. Co-ordination and
control are important; if left to drift, international operations become
disconnected from the rest of the organisation, even in conflict with
it.
Leading and motivating people, setting direction and making deci-
sions are all made more difficult across borders. Empowerment often
provides a solution, enabling people to work within clearly defined
areas of responsibility. Mentoring schemes can provide individuals with
support and coaching, helping to integrate international business units
into the organisation as a whole.
Ensuring stability and efficiency. Multinational companies will want
to reduce costs and maximise resources within a single, integrated struc-
ture. Things to consider when determining the best structure include:
Political, economic and other factors affecting stability. If the
operating environment is unstable, then the best solution may be
to provide direct support.
Resources: human, financial and so on.
The purpose, size and complexity of the operation. Generally, the
more sophisticated and complex the organisation, the more
autonomy is required. But good communications between local
operations and overseas headquarters are always important.
Communicating. When building an international business, all those
with a stake in the company, especially shareholders, providers of
finance and employees, should be informed of what is happening, what
the advantages are and what it means for them. Without an explana-
tion, people often fear the worst. Without a convincing explanation,
they worry that the management has not thought things through and
may be making a strategic error.
99
02 Business Strategy 11/3/05 12:16 PM Page 100
BUSINESS STRATEGY
Connected business units: Hewlett-Packard s IT advantage
Between 1987 and 1997, Hewlett-Packard significantly reduced the cost structure of
its global business while increasing revenue from $5 billion to $40 billion and
maintaining a headcount of around 100,000 people. Sales, general and
administrative expenses fell from 28% of turnover to 17%.
The company did this by being responsive to, and supportive of, its business
units around the world. Global networks and an IT infrastructure geared to effective
information sharing, promoting best practice and allowing a rapid response to
implementing vital changes considerably strengthened Hewlett-Packard s position.
For example, the company bills all IT costs (including employees e-mails) to
business-unit managers to encourage awareness of costs. Furthermore, the culture
of information-sharing across business units encourages the exchange of best-
practice expertise and knowledge between business units.
A global IT infrastructure allows business units to concentrate on value-creation
and promoting growth. Combining business flexibility with IT standardisation helps
greatly when coping with rapid international industry change.
Financial issues
The commercial issues associated with any major new undertaking
include:
Transfer pricing. The prices at which an organisation transfers
goods between subsidiaries in different countries will affect local
profitability and may have tax implications.
Exchange rate volatility. Changes in the value of currencies
complicate cross-border business and can affect profitability. For
firms operating within the euro zone, reducing this uncertainty is
seen as a benefit of the single European currency. Firms can, of
course, hedge their currency risks by buying and selling
currencies forward, but the fewer currencies you have to work [ Pobierz całość w formacie PDF ]
zanotowane.pl doc.pisz.pl pdf.pisz.pl rafalstec.xlx.pl
actions and aims.
Structuring international operations. It can be unproductive and a
waste of resources to make a new international firm fit existing systems
and procedures. But core management issues such as communications,
structure and leadership are best resolved early. Managers must ensure
that information and expertise flow freely throughout the organisation.
In particular, best-practice information should be widely disseminated
and available for everyone in the organisation.
98
02 Business Strategy 11/3/05 12:16 PM Page 99
MAKING STRATEGIC DECISIONS
Deciding the degree of autonomy given to international business
units is fundamental. Reporting structures, responsibilities and author-
ity levels need to be clear. An organisation benefits from being inte-
grated and cohesive and should be fair and consistent in its practices
and with its employees. Local factors should be taken into account,
but an organisation should be true to its values. Co-ordination and
control are important; if left to drift, international operations become
disconnected from the rest of the organisation, even in conflict with
it.
Leading and motivating people, setting direction and making deci-
sions are all made more difficult across borders. Empowerment often
provides a solution, enabling people to work within clearly defined
areas of responsibility. Mentoring schemes can provide individuals with
support and coaching, helping to integrate international business units
into the organisation as a whole.
Ensuring stability and efficiency. Multinational companies will want
to reduce costs and maximise resources within a single, integrated struc-
ture. Things to consider when determining the best structure include:
Political, economic and other factors affecting stability. If the
operating environment is unstable, then the best solution may be
to provide direct support.
Resources: human, financial and so on.
The purpose, size and complexity of the operation. Generally, the
more sophisticated and complex the organisation, the more
autonomy is required. But good communications between local
operations and overseas headquarters are always important.
Communicating. When building an international business, all those
with a stake in the company, especially shareholders, providers of
finance and employees, should be informed of what is happening, what
the advantages are and what it means for them. Without an explana-
tion, people often fear the worst. Without a convincing explanation,
they worry that the management has not thought things through and
may be making a strategic error.
99
02 Business Strategy 11/3/05 12:16 PM Page 100
BUSINESS STRATEGY
Connected business units: Hewlett-Packard s IT advantage
Between 1987 and 1997, Hewlett-Packard significantly reduced the cost structure of
its global business while increasing revenue from $5 billion to $40 billion and
maintaining a headcount of around 100,000 people. Sales, general and
administrative expenses fell from 28% of turnover to 17%.
The company did this by being responsive to, and supportive of, its business
units around the world. Global networks and an IT infrastructure geared to effective
information sharing, promoting best practice and allowing a rapid response to
implementing vital changes considerably strengthened Hewlett-Packard s position.
For example, the company bills all IT costs (including employees e-mails) to
business-unit managers to encourage awareness of costs. Furthermore, the culture
of information-sharing across business units encourages the exchange of best-
practice expertise and knowledge between business units.
A global IT infrastructure allows business units to concentrate on value-creation
and promoting growth. Combining business flexibility with IT standardisation helps
greatly when coping with rapid international industry change.
Financial issues
The commercial issues associated with any major new undertaking
include:
Transfer pricing. The prices at which an organisation transfers
goods between subsidiaries in different countries will affect local
profitability and may have tax implications.
Exchange rate volatility. Changes in the value of currencies
complicate cross-border business and can affect profitability. For
firms operating within the euro zone, reducing this uncertainty is
seen as a benefit of the single European currency. Firms can, of
course, hedge their currency risks by buying and selling
currencies forward, but the fewer currencies you have to work [ Pobierz całość w formacie PDF ]