Wk7: Organisation Structure in MNEs

Question 1

Describe organisational structure (15marks)

Answer 1

Org Structure should be aligned with the strategy of the business and has two main elements. Vertical differentiation (control and decision making power) a Horizontal differentiation (company structure divided along product area or function). The functional structure contains all the departments required to produce a good or service.

Question 2

Outline divisional structures

Answer 2

The divisional structure composed of separate business units within which are the functions that work together to produce a specific product for a specific customer. Divisional management improves resource use and efficiency. The Two types of divisional structures include Global Product structure (each product line or business is handled by a self-contained division) and GLOBAL GEOGRAPHIC STRUCTURE. Allows managers to specialize in one product area. Organizational structure can also be referred to as the hierarchy Flat (3 levels) or Tall (7 levels)

Question 3

Types of Organization structures (7)

Answer 3

Initial division structure
International division structure

Global structural arrangments
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Global product division
Global functional division
Global area division

Mixed matrix structure
Transnational network structure