Discuss at least three alternatives for global organization structure. For each one, explain the structure and some of its advantages and disadvantages for global operations.
Ethnocentric: Hiring people from the parent country to fill positions all over the world. If the company intends to fill out a position in a foreign country, it can do so by relocating someone from the parent country or hiring an individual who wants to live in the host country, from the parent country. This approach is common when opening a new branch in a new country.
- Promotes a better coordination between the host and parent countries.
- Promotes easy control of subsidiaries.
- Facilitates effective communication between host and parent company.
- High rate of failure.
- Expatriates of parent countries are usually expensive than those in the host country.
- Can be difficult to train employees as far distances.
Polycentric: This approach involves recruiting locals to fill out positions in the host country. It is common when the skills of the local people are required to conduct a business. This mindset understands that what works at home will not necessarily work in other cultures and unfamiliar markets. Leadership based on this approach has high success rate compared to ethnocentric approach because of the awareness of other cultural dynamics and needs.
- Eliminates cultural myopia.
- Relatively inexpensive to implement.
- Limits possibilities of career growth.
- Isolates headquarters from the foreign subsidiaries that may impact effectiveness.
Regiocentric: This involves hiring or transferring people within the same region to fill out the open positions. This approach is appropriate when the costs of moving an employee from the host country are significantly lower than taking someone from the parent country.
- Managers that are culture-fit can easily adopt.
- There is less cost incurred in hiring employees from the host country.
- A communication barrier may occur.
- The manager selected from a specific region may not have the required international experience.
Evaluate the importance of creating the balance between autonomy and integration in various global organization structures.
Autonomy is crucial in large organizations because of differentiation. A company with high integration can have different divisions yet these divisions are closely connected and dependent. It is possible to rotate between high integration and high autonomy. A company can create an integrated team to solve a particular problem after which it gets disbanded. Integration can be effective and flexible when there is balanced autonomy. It is important to let some groups control what they can do while remaining on course for the main objective and mission.
Identify at least three ways global companies can demonstrate their commitment to CSR.
- Allowing employees to volunteer, such as participating in matches donations during the Volunteer Time Off day.
- Invest in the environment and social initiatives such as encouraging employees to donate towards education and health within the community.
- Practice ethical labor to attract top talent and maintain high morale among the employees.
Provide an example where a specific company, other than Starbucks, demonstrated commitment to CSR.
Ben and Jerry launched its foundation in 1985. Ben and Jerry’s Foundation was created as a CSR to support the grassroots activism and community for social and environmental justice in the country and give back to the Vermont communities.