Marketing Management, Millenium Edition - epiheirimatikotita.gr

may be international subsidiaries, each headed by a president. The various subsidiarypresidents report to the president of the international division.Many multinationals shift between types of organization:■ IBM Part of IBM’s massive reorganization strategy has been to put 235,000employees into 14 customer-focused groups such as oil and gas, entertainment,and financial services. This way a big customer will be able to cut onedeal with a central sales office to have IBM computers installed worldwide.Under the old system, a corporate customer with operations in 20 countrieshad to contract, in effect, with 20 little Big Blues, each with its own pricingstructure and service standards. 34GLOBAL ORGANIZATIONSeveral firms have become truly global organizations. Their top corporate managementand staff plan worldwide manufacturing facilities, marketing policies, financialflows, and logistical systems. The global operating units report directly to the chiefexecutive or executive committee, not to the head of an international division. Executivesare trained in worldwide operations, not just domestic or international. Managementis recruited from many countries; components and supplies are purchasedwhere they can be obtained at the least cost; and investments are made where theanticipated returns are greatest.These companies face several organizational complexities. For example, when pricinga company’s mainframe computers to a large banking system in Germany, howmuch influence should be wielded by the headquarters product manager, by the company’smarket manager for the banking sector, and by the company’s German countrymanager? Bartlett and Ghoshal have proposed circumstances under which differentapproaches work best. In their Managing Across Borders, they describe forces that favor“global integration” (e.g., capital-intensive production, homogeneous demand)versus “national responsiveness” (e.g., local standards and barriers, strong local preferences).They distinguish three organizational strategies: 351. A global strategy treats the world as a single market. This strategy is warrantedwhen the forces for global integration are strong and the forces for nationalresponsiveness are weak. This is true of the consumer electronics market, forexample, where most buyers will accept a fairly standardized pocket radio,CD player, or TV. Matsushita has performed better than GE and Philips inthe consumer electronics market because Matsushita operates in a more globallycoordinated and standardized way.2. A multinational strategy treats the world as a portfolio of national opportunities.This strategy is warranted when the forces favoring national responsivenessare strong and the forces favoring global integration are weak. This isthe situation in the branded packaged-goods business (food products, cleaningproducts). Bartlett and Ghoshal cite Unilever as a better performer thanKao and P&G because Unilever grants more decision-making autonomy to itslocal branches.3. A “glocal” strategy standardizes certain core elements and localizes other elements.This strategy makes sense for an industry (such as telecommunications)where each nation requires some adaptation of its equipment but theproviding company can also standardize some of the core components.Bartlett and Ghoshal cite Ericsson as balancing these considerations betterthan NEC (too globally oriented) and ITT (too locally oriented).One of the most successful “glocal” companies is ABB, formed by a merger betweenthe Swedish company ASEA and the Swiss company Brown Boveri. 36■ ABB ABB’s products include power transformers, electrical installations, instrumentation,auto components, air-conditioning equipment, and railroadequipment. With annual revenues of $31 billion and 219,000 employees, ABBchapter 12DesigningGlobal MarketOfferings 387