IBUS 462 Lecture Notes - Lecture 8: Major Appliance, Organizational Culture, Dow Chemical Company

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Philips electronic nv, on of the world oldest multinational, started making lighting products, then domestic appliance, consumer electronics, and health care products. From the end of war to 1970: centralized r&d but independent manufacturing, marketing, and sales. But flaws started to appear: duplication of manufacturing activities created high- cost structure so manufacturing was centralized but difficulties due to manager"s fidelity to national markets. Mid 90"s: new ceo boonstra instituted a radical reorganization however philips continued to underperform its global rivals. By 2008, new ceo kleisterless reorganized again making it even more global. This chapter is concerned with identifying the organization architecture that international businesses use to manage and direct their global operations. Organizational architecture refers to the totality of a firm"s organization, including formal organization structure, control systems and incentives, processes, organizational culture, and people. Control systems are the metrics used to measure performance of subunits and make judgments about how well managers are running those subunits (ex: profitability).

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