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ORGANISATION

STRUCTURES FOLLOWED

BY MNCs

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1.Why The MNCs followed byOrganization Structure?

2.What types of structure can be adoptby the MNCs?

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1.Why The MNCs followed by Organization

Structure?Organizational structure refers to the way tasksare divided up and the patterns of coordination,

communication, power distribution andworkflow associate.

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2.What types of structure can be adoptby the MNCs?

The best structure is influenced by manyfactors including company size, technology,and environment.

There are 7 fundamental structure can befollow by the MNCs.

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1.International division structure

In the International division structure, the abroadbranch of the company is the attachment of the parentcompany. The international unit is responsible for

controlling all of the international activities of thecompany. The division can be based on geography,product or function. There is an international divisionhead which is responsible for controlling all of the

activities of these units. This division structure allowsthe multinational companies to freely exploreresources internationally. If there are changes ininternal business environment, the companies which

have this structure undergo some changes.

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International Division Structure

CEO

Production Marketing Finance Personnel

VP internationalOperation

France Japan Egypt Australia Argentina

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Worldwide Functional StructureCCEO

Manufacturing Marketing Finance Other Function

Plant-AGermany

Plant-BBrazil US Africa Europe Locations Locations

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3 .Geographic Area Structure

It is the most common form of organizing foreign operationsdivisions are created to cover geographic regions. Each regionalmanager is then responsible for the operations and performanceof the countries within a given region. In this way, country andregional needs and relative market knowledge take precedenceover product expertise. Local managers are familiar with thecultural environment, government regulations, and businesstransactions. In addition, their language skills and local contactsfacilitate daily transactions and responsiveness to the marketand the customer. While this is a good structure forconsolidating regional expertise, problems of coordinationacross regions may arise. With the geographic structure, thefocus is on marketing, since products can be adapted to local

requirements.

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Geographic Area Structure

CEO

Europe and LatinAmerica Division N.America andPacific Division

UK Venezuela Italy US Japan Canada

Manufacturing Marketing Finance

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4 .Product Organization

In the product Organization structure , a singleproduct (or product line) is represented by aseparate division. Each division is headed byits own general manager, and each isresponsible for its own production and salesfunctions.

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Product OrganizationCEO

Product

Division-A

Product

Division-B

Product

Division-C

S.America Africa Europe Australia Far East

UK Germany Spain Portugal France

Manufacturing Marketing Finance

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5 .Mixed Structure

Most firms follow a hybrid design which bestsuit their purpose as dictated by size,strategy,technology,environment and culture.A company s managers start with the basicprototype(copy) discussed till now, mergethem, eliminate some pieces, and create new

elements unique to their firm as they respondto change in the organization's strategy andcompetitive environment.

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6 .Matrix Structure

The matrix design emerges when one design issuperimposed on top of an existing, butdifferent from. The result design, is quite fluid,with new matrix dimensions being created,escalated or reduced, and eliminated asneeded.

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Matrix StructureCEO

Globalmarketing

GlobalFinance

GlobalOperations

GlobalHR

GlobalProductManager-A

GlobalProduct

Manager-B

GlobalProduct

Manager-C

Global

ProductManager-D

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7.Networked Structure

The organizational structure of a company is the formaland informal framework of organizational policies, suchas hierarchical levels, lines of communication andreporting, and the rights and responsibilities of employees.A network organizational structure is morecomplicated and complex than any other structurebecause it is consists of multiple organizations thatwork together to produce goods or provide services

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Networked Structure