The Multinational Corporation (MNC)
- Operates across
- Products
- Markets
- Nations
- Cultures
Each Subsidiary Has Its Own
- Geography
- Goals
- Policies
- Procedures
Special Information Processing Needs Influenced by
Administrative heritage
Internal conditions
- Firm’s assets
- Distribution of power
- Corporate culture
- Management style
External Conditions
Exist within the firm’s environment
- Global
Uncertainty - Difference between:
- Information required and
- Information possessed
Need to make good use of information technology to achieve good performance
Types of MNC Organizational Structure Classifications
Each structure requires its own information processor
Worldwide functional divisions
- Organized along functional lines
- Marketing in subsidiary reports to marketing in parent company
- Strategic planning done at top executive level
MNC Classifications (continued)
International regions
- International division separate from domestic division
Geographic regions
- Each region responsible for its subsidiaries
- No communication between regions
Worldwide product divisions
- Product division responsible for operations worldwide
Need for Coordination in an MNC
Greater need than domestic companies
Advantages
- Flexibility in responding to competitors
- Ability to respond in one country to a change in another
- Ability to keep abreast of market needs around the world
Advantages (continued)
- Ability to transfer knowledge between units in different countries
- Reduced overall costs of operation
- Increased efficiency and effectiveness in meeting customer needs
- Ability to achieve and maintain diversity in firm’s products, their production, and distribution
Global Business Strategies
Use global information systems (GISs)
- Multinational strategy
- Global strategy
- International strategy
- Transnational strategy
