Designing the Global Corporation

by Jay R. Galbraith

Book Overview

If there's anything more challenging than designing a company, it's designing a global company. Balancing strategy and structure becomes even more daunting when geography, foreign governments, and... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 0787952753
• ISBN13: 9780787952754
• Release Date: July 2000
• Publisher: Jossey-Bass
• Length: 336 Pages
• Weight: 1.30 lbs.
• Dimensions: 1.2" x 6.3" x 9.3"

Customer Reviews

Geography is History!!

Background: Geography is History!! So went an advertisement from a telecom company a few years ago. And as globalization proceeds to breakdown national boundaries, open up cultures and increases access for economic activity, an awareness of this process of breakdown of geography has become a necessity for any corporation wanting to grow and flourish. Increasing size in this dynamic environment brings with it many challenges including increasing structural complexity, need for quick and seamless communication to manage this complexity, as well as an ability to assess and predict the changing external world, recognize opportunities therein and fashion nimble responses to gain competitive advantage. `Designing the Global Corporation' is a book written to address such issues in an attempt to help managers structure their thinking towards an increasingly boundaryless world. Synopsis: Jay Galbraith begins his book by arguing against the KISS principle (Keep It Simple, Stupid!) of organizational design. He recognizes that increasing foreign direct investment (FDI), breakdown of trade barriers and improved communications via media like the Internet along with a corporations need to reach customers globally have increased the complexity of doing business. Corporations could fight this complexity and simplify their operations, or learn to accept, manage and in fact use this complexity as a competitive advantage against simpler competitors. He then goes on to inject great precision into the concept of a globalization for a corporation and defines 5 different levels of international development in increasing order of complexity. A corporation may develop a competitive advantage in its home country and then try to export this advantage to international destinations, evolving through different levels of international development. Or, a corporation like Logitech, may be designed as a transnational corporation from its very inception, with hardware R & D located in Switzerland, software development in California, manufacturing in Taiwan and sales in every country. Evolution from level 1 to level 5 may not be inevitable and/or desirable, with many companies deciding to settle into a particular niche depending upon the nature of their business and their long-term goals. The rest of the book is devoted to a very clear, well-illustrated nuts and bolts description of designing global corporations with different levels of internationalization. The geographical entity headed by a country manager, multinational single business units and the multinational multi dimensional organizations are described in great detail. Underlying theme of this entire discussion is that the structure of the organization has to cater to its overall strategy, and the former has to change as the latter evolves.The author spends considerable time and space on the need and means for developing informational and decision-making networks within such complex organizations. Here again he describes 5

Highly Recommended!

Globalization has become such an overused buzzword that it has become nearly devoid of meaning. Here, author Jay R. Galbraith injects new precision into the concept: Going international means plenty of hard work and painstaking attention to detail. Because every company's strategy, market and competitive advantage is unique, it's impossible to define one single, perfect, organizational structure for an international business, but Galbraith provides some fascinating alternatives to consider. Although Galbraith's book is jargon-filled and dense, it is full of useful, illustrative examples. He manages to reduce international business to its simplest form: A company develops an edge, and then tries to take it abroad. This involves many challenges, which Galbraith describes in rich detail. So if your company is multinational - or wants to be - we at getAbstract recommend this book to you. It is tailor-made for executives who are involved in international business - or who hope to expand their global reach.

Organizations of third-generation strategies.

"Most companies do not have the capabilities to institute the multidimensional organizations that are required by their strategies and necessary to serve their global customers. In one memorable conversation,...Chris Bartlett summed up the situation well, stating that companies pursue third-generation strategies using second-generation organizations staffed with first-generation human resources. When first-generation managers attempt to institute third-generation multidimentional organizations, they fail and attribute the failure to the organizational form, not to their lack of capability. They then call for a return to simple, first-generation organizations. These simple organizations will work if the companies follow first-generation strategies in clear and stable industries. However, if a company wants to enter complicated countries like China, create value for the global customer desiring solutions, and be competitive in converging industries, it must pursue a third-generation strategy. This book is intended for those who wish to design the third-generation organizations required by third-generation strategies...I believe in 'keeping it simple' but with two twists. First, I believe we should keep it simple for the customer; a company should work toward being easy to do business. Second, I believe we should keep it simple for front-line employees-those people with direct customer and product contact...The new mandate to keep it simple for customers and front-line employees makes management's job difficult and complex; how to organize in order to manage this complexity is addressed in this book...Some firms, like ABB, IBM, and Citigroup, believe that the winning companies are going to be those that can manage global complexity. It is for these firms that this book is written" (from the Preface).In this context, Jay R. Galbraith:* highlights some of the reasons for adopting a global organizational capability as well as some of the inherent challenges in doing so, and also spotlights some of the managerial and business-environment mind-set that can prevent these strategies from being embraced and employed to full advantage.* argues that the global organizations are complex and multidimensional networks as a result of balancing many strategic factors; and then describes these factors in four categories: level of international development, amount of cross-border coordination, activity of host local institutions, and diversity of international business porfolio.* argues that the level of international development-one of the strategic factors that influence how a company organizes its international operations-consists of three dimensions: the role of subsidiaries, the mode of participation in the local economy, and the proportion of assets and employees located outside the home country; and then defines the different types of competitive advantages, and focuses on the different levels of international development and how a firm changes from one level

A Compass and a Map...Not a Blueprint

Let's begin with Galbraith's concluding remarks: "The new development process for global products [and services] is one of the key organizational capabilities that a firm must master when evolving into a multinational company. Even without the global challenge, the product development process has become complex: products [and services] have to not only meet market requirements but also be manufacturable, reliable, serviceable, useable, and recyclable, and meet target costs in shorter and shorter cycle times." If this brief excerpt describes the situation your organization is in now or one to which it hopes to relocate ASAP, this brilliant book is "must reading."In a very real sense, Galbraith functions as both a management consultant and an architect. The emphasis on the principles of "design" is intentional and eminently appropriate. Here are some of questions he answers:What is the challenge of organizational complexity? How to overcome it?How to organize the global corporation?What are the levels of international development?What does partnering require? When and why is it beneficial? What is the significance of geographical division?Which multidimensional structures are most important? Why?What are the most effective strategies for coordination between and among networks?What are cross-border formal networks? What are their significance?What are the most effective ways to shift power across networks?What is the "transformational form"? What is its significance?What is a "multidimensional multinational"?What are the most effective organizational strategies to serve the global customer?What is a "front-back hybrid organization"? After "A Look Ahead", Galbraith provides an Appendix ("The New Global Process of New-Product Delopment") which, all by itself, is well worth the price of the book. To repeat, I consider it "must reading" for organizations already embarked upon globalization or which are now preparing to begin that perilous journey. There is another category of organizations which can also derive substantial benefit from this book: Those who now do business with or plan to do business with others now active in the global marketplace. With all due respect to Galbraith, there is no single "design" which is appropriate for all or even for most organizations. Moreover, today's appropriate design may well prove inadequate in the near future, if not by tomorrow. Therefore, I suggest that you use Galbraith's book to identify the questions which must be asked and then answered, to take full advantage of the advice he provides and of the guidelines he suggests, and to view the design process as a unique opportunity to energize (or re-energize) everyone involved. Galbraith asserts (and I agree) that companies CAN transform themselves to design local products or devise local services that capture global scale yet fit local-market requirements. Only those which do will prosper. The choice is theirs. It re

Designing the Global Corporation

The author has the ability to digest what could be a complex subject into simple, easy to read information. The book is as broad as it has to be to cover all pertinent bases, yet it's as deep as it can be within the allotted space. Consistent reference to other books and studies are provided throughout. This book gives a straightforward overview for those considering the options available for establishing international organizations.