SC 405 GSM Unit 4

Designing a Global Organisation

Global Organisational Structure
Under the global geographic structure, a
firm's global operations are organized on the
basis of geographic regions, The global structure
has to coordinate and provide synergy to
achieve company's overall strategic goals
between subsidiaries based in different
countries.
The Hybrid Structure
• You can adopt a structure that meets your business needs, even using a hybrid structure that
combines two or more given models. For example, your business can have one division based on
geography and another based on products Etc
The Transnational Structure
A Transnational organizational structure, you generally organize your business along several
dimensions, such as geographic, product and functional levels. This means you achieve integration
either within various product categories or within geographic areas or functions. Such an
organizational structure helps you coordinate across all related business activities simultaneously
The major issue facing organizations that use a transnational structure is complexity, which is likely
to interfere with your efforts to achieve integration and coordination at various levels.
You might find it extremely difficult to balance the needs of different functional, geographical and
product stakeholders.
The command structure used by transnational organizations can create ambiguity and conflict.
Furthermore, the complex structure also seriously hinders decision-making processes because of the
involvement of various people. These delays in decisions eventually can increase your administrative
cost and outweigh the benefits of coordination.
Importance of Organisational Cuture in Global Business
• Business leaders throughout the world know the difficulties in creating a culture
in the workplace. These difficulties are amplified when businesses expand from
their home markets to the global economy. Culture building in a global company
means gaining familiarity with local traditions in new locations and balancing
staff autonomy with corporate goals.
• The most successful companies in the world are capable of developing culture in
business operations that evolve over time. As a company moves abroad, the
resiliency of its culture and values can be tested when dealing with regional
cultures. These challenges range from locally observed holidays that are highly
valued by employees to language barriers that can create embarrassing gaffes.
• Expanding businesses don’t have the luxury of tracking every move made by
employees throughout the world. This limitation should be viewed as an
opportunity to encourage employee ownership of ideas as a cultural component.