Organizational Structure, Which Best Suits Your Company in a Global Market

There are five types of organizational structures: International Division Structure, International Area Structure, Global Product Structure, Global Matrix Structure, and Global Functional Design Structure. (CTU, 2005) The one that would be optimal for a company that is just expanding is the International Area Structure. The reason this would be optimal is because a company is new to selling internationally. "In this organizational structure, the company is organized into countries or geographic regions." (CTU, 2005) This would be a benefit to have the organizational in this manner because it would allow a company to focus on the region of the world we are selling to and tailor the needs of mobility products to that area. As a company grows internationally we can expect to see a companies organization grow as well.

Using the International Area Structure will allow a company to hire managers who specialize in understanding the cultural, commercial, social and economic conditions we wish to expand to. (Griffin and Pustay, 2005, pg 394)

By using the International Area Structure, this is going to allow the company to adapt additional marketing strategies, without disrupting the ones company managers have worked so hard for. In addition, "an international firm must address its coordination needs" (Griffin and Pustay, 2005, pg 404) Meaning, a company must link and integrate functions and activities of different divisions of the company. (Griffin and Pustay, 2005, pg 404)

Over time, we can expect to see a company grow into a Global Matrix Structure. "In this organizational structure, the chain of command is split between product managers and area managers." (CTU, 2005) As we develop the sales in areas of the world, we can expect to see the chain of command split between product managers and area managers.

References:

Griffin, Ricky W. and Pustay, Michael W., 2005, "International Business", by Pearson Education, Inc, Upper Saddle River, NJ

CTU, retrieved on December 15, 2005 from https://campus.ctuonline.edu/MainFrame.aspx Phase 3 Course Material T