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Organizing for
Global Marketing
Learning Objectives
List and explain the internal and external factors that impact how global
organizations are structured and managed.
Note the advantages and disadvantages of the different ways of
structuring a firm with international sales.
Discuss global mandates, and note how global mandates can affect a
firm’s organization.
Explain why organizational issues for born-global firms differ from
those for traditional multinational companies.
Give examples of how technology can be utilized to support internal
global communications systems.
List and explain the elements of an effective global control strategy.
Discuss the conflicts that can arise between international headquarters
and national subsidiaries.
Consider a career in global marketing.
Chapter Outline
• Elements that affect a global marketing
• Types of organizational structures
• Controlling the global organization
• Conflict between headquarters and
• Considering a global marketing career
Elements That Affect a
Global Marketing Organization
• Corporate goals
– Mission statement
Why do we exist?
Where are we going?
What do we believe in?
What is our distinctive competence?
– Strategies and objectives
Elements That Affect a
Global Marketing Organization (cont.)
• Corporate worldview
– Ethnocentric orientation
• Ideas emanating from home market considered superior
• HQ tells subsidiaries what to do
– Polycentric orientation
• Each market considered unique
• Local subsidiaries given leeway to develop and
implement their own strategies
– Geocentric orientation
• All national units—including domestic ones—must
consider what is best for whole organization
• HQ holds power but keeps channels for good ideas—and
senior management—open for subsidiaries
Types of Organizational
Structures (cont.)
• International divisions
– Created when international sales coordination
extends beyond capacity of international specialist
or export department
– Directly involved in the development and
implementation of global strategy
– Actively seeks out opportunities in foreign
• Regional or local offices = close contact with market
Types of Organizational
Structures (cont.)
• Geographic organizational structures
– Appropriate when company needs intimate
knowledge of its customers and their environments
– Gives company opportunity to understand the local
culture, economy, politics, laws, and competitive
– Two Types
• Regional management centers
• Country-based organizations
Types of Organizational
Structures (cont.)
• Geographic organizational structures
– Regional management centers
• Focus on regions of world
• Market similarity and size
• Allows company to locate marketing and
manufacturing efforts in such a way as to take
advantage of regional agreements such as
• Puts company in closer contact with
distributors, customers, and subsidiaries
Types of Organizational
Structures (cont.)
• Geographic organizational structures
– Country-based organizations
• Separate unit for each country
• Extremely sensitive to local customs, laws, and
• Expensive!!!
• Many companies are phasing out country-based
structures and are moving toward regional
Types of Organizational
Structures (cont.)
• Functional organizational structures
– Top executives in marketing, finance,
production, accounting, and research and
development all have worldwide
– Best for narrow or homogeneous product
lines with little variation between products
or geographic markets
Types of Organizational
Structures (cont.)
• Product organizational structures
– Each product group is responsible for
marketing, sales, planning, and (in some
cases) production and research and
• Other functions such as legal, accounting, and
finance can be included in the product group or
performed by corporate staff
– Common for companies with several
unrelated product lines
Types of Organizational
Structures (cont.)
• Product organizational structure
– Advantageous when product line constantly
changes with technological advances
– Facilitates the development of global products and
global roll-outs
– Appropriate when perceived differences involved
with marketing the various product lines are greater
than perceived differences in geographic markets
– Knowledge of specific geographic areas can be
limited and sensitivity to local market conditions
can be diminished
Types of Organizational
Structures (cont.)
• Matrix organizational structures
– Developed to overcome drawbacks of geographic,
functional, and product organization structures
– Allows for two or more dimensions of theoretical
weight, e.g., importance to product and geography
– Complexity can cause duplication of authority,
confusion of responsibility and power struggle
– Requires change in management structure from
traditional authority to influence system based on
technical competence, interpersonal sensitivity, and
Global Mandates
• Global mandate – Expressed
assignment to carry out a task on a
global scale
– Global account management
– Global brand management
Global Teams
• Teams consisting of members from
different parts of the world
– Often are cross-functional
– Commonly used to create regional solutions
• Pricing corridors to reduce gray trade in a
• Pan-regional advertising
Organization of Born Global
• Can adopt global organizations from the start
– Forgo costs associated with structural change
• But firms that move into international markets
more slowly
– Can build up market and cultural knowledge over
– Cultivate and support increasingly extensive
worldwide operations through recruitment and
training of knowledgeable and experienced
managers and staff
Controlling the Global
• Communication Systems
– Effective communication systems facilitate
– Siemens “sharenet” system
Controlling the Global
Organization (cont.)
• Elements of a control strategy
1.Developing standards
• Behavioral standards
• Performance standards
2.Measuring and evaluating
3.Analyzing and correcting deviations
from the standards