Central standards versus local interests

Aligning the structures and strategy in global companies

Summary

The case elaborates on the adaption of a company’s organizational structure to a new strategy as part of the strategy execution process. Specifically, the case deals with the introduction of central process standards to realize company-wide synergies. The challenges described in the case concentrate on aspects of the strategy implementation in the organization. Thereby, the strategy implementation needs to be considered as an integral part of the strategy formulation when evaluating advantages and disadvantages of organization’s centralization efforts and not as a separate process. The realized synergies that are derived through the co-ordination of the operative businesses are an essential part of the corporate strategy. In particular, the case describes an IT-project manager of an international pharmaceutical company who is in an awkward position within the company’s matrix structure. While the IT-manager is directly responsible to the national subsidiary in Austria, he works almost exclusively for the company’s headquarters with the strategic goal to reinforce the control and standardization of the national subsidiaries’ processes. This implies a reduction of the managers’ autonomy in the national subsidiaries and thus, encounters major resistance. As a result, the IT-manager is stuck in the middle since he has to balance the company’s headquarters interests from a global perspective, the national subsidiaries interests from a local perspective, as well as his own carrier perspective.

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Bibliographic Data

CENTRAL STANDARDS VERSUS LOCAL INTERESTS: ALIGNING THE STRUCTURES AND STRATEGY IN GLOBAL COMPANIES

Case – Reference no. D312-019-1

Authors: Staudacher, M. (General Customers – Rest of World); Mueller-Stewens, G. (University of St. Gallen); Juettner, F. (University of St. Gallen)
Published in: 2012
Length: 6 pages
Data source: Field research

Teaching note – Reference no. D312-019-8

Authors: Staudacher, M. (General Customers – Rest of World); Mueller-Stewens, G. (University of St. Gallen); Juettner, F. (University of St. Gallen)
Published in: 2012
Length: 10 pages
Data source: Field research

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