Leadership, Organization, Organization and Corporate Social Responsibility

Global Marketing (Global Edition) ( ) Chapter 17

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Introduction
Chapter topics: Leadership that integrates global efficiency, local responsiveness, i and d leverage l into global vision and strategy Organizational O i i l structures Lean production Corporate social responsibility g control process p Marketing
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Leadership
The leaders task is to articulate:
Intended geographical scope of activities Beliefs Values Policies

Top Management Nationality, 2011

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Leadership and Core Competence

Executives were judged on their ability to identify nurture identify, nurture, and exploit the organizations core competencies in the 1990s, , as opposed pp to the focus on reorganization in the 1980s Core competencies must: Provide P id potential t ti l access to t a wide id variety of markets Make a significant contribution to the perceived customer benefits Be difficult to imitate
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Organizing for Global Marketing

The goal is to find a structure that:
Enables the company to respond to relevant market environment differences Ensures E th the diff diffusion i of f corporate t k knowledge l d and d experience throughout the entire system

Organizations O i ti must t balance: b l

The value of centralized knowledge and control The need for individualized response to local markets
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Organizing for Global Marketing

In global marketing there is not a single best structure t t Leading-edge global competitors share one key organizational design characteristic:
Structure is flat and simple

Patterns of International Organizational Development

Organizations vary in:
Size Potential of targeted global markets Local management competence

In the 21st century corporations will have to , more creative ways y to organize g find new,
Must be flexible, efficient, and responsive to meet globalizing g markets the demands of g
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Conflicting pressures may arise

For product and technical knowledge Functional area expertise Area and country knowledge
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International Division Structure

International Division Structure

Four factors that lead to this structure
Top management managements s commitment to global operations has increased enough to justify the position Complexity l of f international l operations requires a single organizational unity The firm has recognized the need for internal specialists to deal with the demands of global operations Management recognizes the importance of proactively scanning the global horizon for opportunities and threats

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Geographical and Product Division Structures

The Matrix Structure

Product or business, function, area, and customer t k know-how h are simultaneously i lt l focused on the organizations worldwide marketing k ti objectives bj ti Management must achieve organizational balance that brings together different perspectives and skills to accomplish organizational objectives
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The Matrix Structure

Geographic g p knowledge g understanding g of economic, social, political, and governmental market and competitive g p dimensions Product knowledge and know know-how how product managers that have a worldwide responsibility can achieve new levels of product competency
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The Matrix Structure

Functional competence corporate staff with worldwide ld id responsibility ibilit contributes t ib t toward t d the development of functional competence on a global l b l basis b i Knowledge of customer or industry and its needs staff with responsibility for serving industries on a global basis assist organizations in their efforts to penetrate specific customer markets
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The Matrix Structure

Reln. btw Structure, Foreign P d Di Prod. Diversification ifi ti & Si Size

Grid or Matrix Foreign Product Diversification (%) 10 Boundary

Stage II International Divisions 0 50 Reporting responsibility

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Area Divisions

Coordination

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Size Abroad (as % of Total Size)

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Implications for Changing Organizational Structure

1. Declining profitability & shareholder value are greater motivators of change than increasing economic turbulence 2 Charismatic or transformation style of 2. leadership 3 Those who implement change need a firm 3. grasp on all aspects of the business 4 Correct 4. C balance b l between b long-term l strategic i objectives & short-term attention to shareholder h h ld value l
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Implications for Changing Organizational Structure

5. Loose-tight g balance 6. Employees need to learn to behave differently 7. Knowing when the strategic imperative is strong enough to require change 8. Loose organizational structure require understanding d t di of f measure of f success

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Lean Production: Organizing the Japanese Way

Compares craft production, mass production, and lean production Craft production meant one worker created one product Mass production gained advantages because p work one worker could do far more specialized due to the moving assembly line Lean production uses less factory space, smaller inventories, and quality control methods; increased efficiency by 50% over typical l mass production d
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Mass Production vs. Toyota Production System

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Ethics and Stewardship

Todays CEO must be a proactive steward of the firm S/he must respond to:
Stakeholders: managers, employees, customers stockholders customers, stockholders, and suppliers Secondary stakeholders: general business community, i local l l community i groups, and d nongovernmental organizations (NGOs)
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Corporate Social Responsibility

An obligation to pursue goals and practices that are in the best interest of society Many companies create a formal Code of Ethics that summarize core ideologies, g , corporate p values, , and expectations
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Four-Step Four Step Pyramid of CSR

Corporate Social Responsibility

9 Social responsibility marketing
Understand broader concerns & ethical, environmental, legal & social context of marketing activities Marketers to consider role they play in social welfare

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Social Responsibility Marketing

Are firms that satisfy consumer wants acting in b best long-run l i interests of f consumers & society? i ?
Fast F tf food di is t tasty t b but t unhealthy h lth Convenient packaging leads to waste Satisfy consumers, but hurt health & environment

McDonalds McDonald s 9 Added healthier items (salads) 9 Environmental initiative (paper wraps replace foam boxes)
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Corporate Social Initiatives

Issues in CSR
How do CEOs decide what is in the best i t interest t of f society? i t ?
Bangladeshi children lost garment industry jobs after ft th the US th threatened t dt trade d sanctions, ti and d th the children were worse off Nike has been criticized for alleged poor working conditions in its factories Wal-Mart has been under fire for a number of reasons including labor practices, resulting in p in communities it serves social repercussions

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Source of Conflict in Global CSR

Global Marketing Audit

A comprehensive, systematic & periodic examination of a companys marketing environment objectives, environment, objectives strategies, strategies programs programs, policies, & activities which is conducted with the objective of identifying existing & potential problems and opportunities & recommend a plan of action to improve a companys performance g between the company p y executives & A meeting auditor to agree on objectives, coverage, depth, data sources, report format & time period for the audit Gather data Analyze data Prepare P & present t th the report t
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The Control Process

What do we want to achieve? (goal setting) (g g) What is happening? (performance measurement) Why is it happening? (performance diagnosis) (p g ) What should we do about it? (corrective action)
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Types of Marketing Control

Annual plan control P fit bilit control Profitability t l Efficiency control Strategic control
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