Global Product Structure Often Consumer Packaged Goods (CPG) manufacturers rely on a global product structure approach to gain economies of scale, encourage and promote the experience effect of learning about new products through the organization globally, and have greater synchronization of new product introductions. P&G has gone through many re-organizations over the last thirty years, and the most recent as been a global product structure that seeks to gain cost and time-to-market efficiencies globally through this approach to organizing their company (Ambos, Andersson, Birkinshaw, 2010)
Global Functional Structure WalMart has one of the most efficient and pervasive supply chains globally mainly due to the decision to have a global functional structure around the processes in this area. WalMart centralizes supply chain management, planning and optimization to ensure the highest levels of efficiency and cost reduction are attained, which is one of the major advantages of this organizational structure (Egelhoff, 2010)
Domestic Structure plus Export Department This form of MNC structure is common in nations who rely on exports for the majority of their revenues and Gross Domestic Product (GDP). Japanese companies often have deep expertise in this area, with Panasonic, Toyota, and Toshiba having extensive export departments that deal with such critical process and strategy areas as compliance, pricing and warranty claims by nation (Voisey, 2010)
The disadvantages of this approach include lengthy time to launch new products, lack of global coordination across subsidiaries, and the potential for partnerships at a regional or national level to be uncoordinated to global product and marketing strategies. Global Structure Retailers often rely on a single global structure to provide for economies of scale, greater coordination of supply chain costs and timing, and greater development of global distribution channel selling relationships (Wang, Chan, 2010)
, and businesses incorporated here, without regard to where in the world the income was earned. This is in contrast to the territorial system used by many other countries, which taxes only the income earned on their soil (Hong and Smart, 2010)
The clever money manager can still generate significant cash gains from currency hedging without increasing the productive output of a business unit. By defining exposure as the proportion of currency transactions to total transactions, greater management attention can be aimed at operating units with a high degree of exposed risk to exchange rate changes (Johnson and Scholes, 2002)
merely to obtain a reduced rate or a zero rate of tax. Establishing a priority for the rights of a country to impose tax on income earned within its country on a territorial basis, leaving merely residual rights to the country that asserts jurisdiction as to nationality (Kuntz and Peroni, 1991)
The greater the proportion of currency exchanges to total monetary transactions for a given market, the greater the exposure to changes in exchange rates. Commercial operations conducting international trade are exposed to exchange rate fluctuations in proportion to their total volume of transactions (Lymer and Hasseldine, 2002)
Common financial accounting practices require financial positions to be translated at current exchange rates from the operations currency into the reference currency. Despite the need to consolidate financial results on a consistent basis, direct translation at current exchange rates continues to obscure actual operating results when the relative currency values fluctuate from period to period (Morrison, 2002)
Moreover, the company's initial strategy to sell its products directly into China created a similarly inefficient tax structure. And in addition to tax issues, the company's method of establishing itself in multiple countries had complicated the financing of its various operations (Thruonyi, 2003)
This commitment to the low price has represented the "strategy [that] shaped Wal-Mart's culture and driven the company's growth" (Wilbert). A focus on cost efficiencies and operational efficiencies A sustained strategy of expansion in both the United States as well as outside it, through traditional stores, as well as new formats (Blanchard, ) Starting with 2010, the organization has also developed and implemented an electronic commerce strategy through which it hopes to gain three specific objectives: "1) Develop and execute a global eCommerce strategy; 2) Accelerate global online channel growth; and 3) Create technology platforms and applications for every Walmart market" (Wal-Mart 2011 Annual Report)
, in Germany the company does not seem to be able to offer customers any compelling value proposition in comparison with its local competitors. Wal-Mart Germany's future looks bleak indeed" (Knorr and Arndt, 2006)
The table below reveals the five-year financial summary of Wal-Mart. Source: Wal-Mart 2011 Annual Report At a strategic level, the Wal-Mart executives have developed and implemented a strategic course of action based on the following: A cost leadership strategy according to which Wal-Mart strives to offer the lowest possible price to its consumers (Ireland, Hoskisson and Hitt, 2008)
Source: Wal-Mart 2011 Annual Report At a strategic level, the Wal-Mart executives have developed and implemented a strategic course of action based on the following: A cost leadership strategy according to which Wal-Mart strives to offer the lowest possible price to its consumers (Ireland, Hoskisson and Hitt, 2008). This commitment to the low price has represented the "strategy [that] shaped Wal-Mart's culture and driven the company's growth" (Wilbert)
This focus drives everything we do at Walmart. And, for the millions of customers who shop in our stores around the world each week, it means they can trust that our brand means we have every day low prices" (Wal-Mart 2011 Annual Report)
This motto is still valid in today's Wal-Mart and the organizational slogan is "Save money. Live better" (Wal-Mart Website, 2011)
Multinationals have become the principal force behind globalization, reaping the benefits of the increased openness of domestic economies to incorporate their pursuits across national markets and societies. Given their high degree of mobility and visibility, it is not surprising that MNCs, as described by Texas A&M economist Loraine Eden and University of Minnesota business professor Stefanie Lenway, "have become a lightning rod for groups concerned about the various costs of globalization: social, cultural, political, and perhaps most importantly, the economic costs" (Eden and Lenway 383)
S., Western Europe, and Japan; they have the ability to shape global trade, production, and financial transactions (Eldridge)
Additionally, separating the 'environmentally-friendly' hype from the actual reality of firms' environmentalism is essential. Issues pertaining to environment can't all be win-win situations, no matter how much corporations attest that they are (Banerjee, 2007)
Though academicians as well as businessmen aim to bring together these apparently incompatible contexts of ethics, businessmen have, in practice, basically skirted the sustainability discussion by assuming an "ethically pragmatic, purged, and reassuring" sustainable development version (Milne & Byrch, 2011). The 3BL also indicates concerns for impartiality between generations and distributive justice for securing responsible, effective utilization of resources needed by businesses on a daily basis (In Aras, 2015)