International Management 8th Edition by Fred Luthans,Jonathan Doh

Exercise 7

Every MNC tries to drive down costs by getting its goods and services to the market in the most efficient way.Good examples include auto firms such as Ford Motor and Volkswagen, which have worldwide operations.In recent years Ford has begun expanding into Europe and VW has begun setting up operations in Latin America.By building cars closer to the market, these companies hope to reduce their costs and be more responsive to local needs.At the same time this strategy requires a great deal of organization and coordination.Visit the websites of both firms and examine the scope of their operations.The Web address for Ford Motor is www.ford.com, and for Volkswagen it is www.vw.com.Then, based on your findings, answer these questions: What type of organizational arrangement(s) do you see the two firms using in coordinating their worldwide operations? Which of the two companies has the more modern arrangement? Do you think this increases that firm's efficiency, or does it hamper the company's efforts to contain costs and be more competitive? Why?