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A multinational firm’s organizational structure that reflects the “global” philosophy that the world is basically one homogeneous market is called a “global structure.” For example, by this philosophy, many large electronics and consulting firms, while allowing for minor local adjustments to containers and language, basically project the same kinds of products and services around the world. However, there are any differences in terminology and philosophy in this field.

First, a “global” philosophy is characterized by finding the world as one more-or-less monolithic market with similar tastes and preferences. In modern parlance this is opposite to a “multidomestic” (or multinational or multilocal) philosophy by which one sees the world as made up of many more-orless unique markets, each with its distinct tastes and preferences. A position between these two extremes is called regionalism, whereby one sees the world as being made up of a small estimate of quite homogenous regions. These constructs can be applied to industries, firms, and organizational structures, and it is informative to understand how global thinking at manufactures and strategic levels apply.

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For example, George Yip sees globalization as a function of the degrees to which the global marketplace is fragmented, local customer needs are distinct, local sourcing imperatives exist, costs are heterogeneous, and trade barriers are primary to cross-border commerce. Thus Randall Schuler, Peter Dowling, and Helen De Cieri and other scholars refer to some industries-like market aircraft, copiers, generic drugs, most electronics and computer hardware-as global industries; while retail, the food industry, and most services are determined substantially multidomestic.

Multinationals-and other large firms, for that matter-generally are divided into any parts, units, or divisions that reflect some aspect of their strategy. This link between structure and strategy was made supreme in the superior book Strategy and structure by Alfred DuPont Chandler. For example, a firm with five stock categories may have been structured into five divisions, each agency mandated to conduct one of the stock categories. Chris Bartlett and Sumantra Ghoshal build on this logic as they focus on organizational responses to global and local forces; and they impart four organizational types (or mentalities) for the global society that represent organizational and strategic responses to assorted manufactures contingencies. For example, they impart the global firm that views the world as its market, assumes that national tastes are more similar than different, and that believes in standardized products; and these strategic approaches wish structural integrative mechanisms that are to coordinate worldwide activities, production, marketing, research and improvement (R&D), and planning.

Thus, it is these structural processes that are implied by the term global structure. Mechanisms All large organizations need some structures that coordinate and join to some degree. However, the global strategy relies on these structures for implementation There are three major aspects to this kind of structure. The first is the locus of strategic responsibility. Second, the way the structure separates reporting relationships and dictates how the firm is divided. This aspect of structure may be called structuring. The final aspect is the kinds of coordination and integration systems-these may be called processes.

Locus of strategic responsibility: A crucial aspect of society structure is the extent to which decision- development autonomy is delegated from corporate headquarters to parts of the business. In the global firm there is a strategic imperative to centralize prominent strategic decisions. For example, decisions on stock range, research and development, branding, and human reserved supply administration tend to be made at corporate rather than subsidiary level. Even customer service, which is the function most likely to be placed closer to the customer, may have its major policies and standards set at corporate level. Structuring: A characteristic of the global structure is that it is relatively blind to geographic length and instead focuses on one or more other strategic dimensions-like products or markets-that it considers more prominent (than geography) to its success at implementing a global strategy.

Thus a global structure generally has a major top-level agency into stock categories (generally called a global stock structure), markets (global market structure), or some matrix (global matrix structure). As an example of a global stock structure, Procter & Gamble (P&G) has three global stock divisions, namely Global Beauty, Global Household Care, and Global health & Well-being. However, the unlikeness between stock and market structures is likely to be blurred-for example, Boeing’s company units seem like dissimilar stock divisions (commercial airplanes, integrated defense systems, and Boeing capital corporation), but in supervene all three have the aim of marketing assorted aircraft and aerospace products and services to dissimilar market groups-in this case market airlines, governments, and financial intermediaries.

The global matrix structure attempts to make activities by two (or more) managerial dimensions-like product, geography, and/or market. For example H. J. Heinz has simultaneously geographic divisions in North America, Europe, Australia/New Zealand, and emerging markets (selected countries in Asia and eastern Europe); any stock categories, namely ketchup/condiments/sauces, meals and snacks (including icy foods), soups/beans and pasta, and child feeding; and detach operations for sell and food service channels. In a global structure these assorted departmental and company divisions may have primary aspects of local focus, but essentially they work together for implementing the firm’s global strategy.

Processes: Finally, and very importantly, structure implies processes such as coordination, integration, and data systems. These processes tend to be pronounced in the global structure, and generally very coarse in modern organizations. Kwangsoo Kim and Jong-Hun Park recognize four generic integrating mechanisms: (1) people-based integrating mechanisms that use population to coordinate company operations over borders, piquant the transfer of managers, meetings, teams, committees, and integrators; (2) information-based integrating mechanisms use data systems such as databases, electronic mail, Internet, intranet, and electronic data interchanges to join company operations over borders; (3) formalization-based integrating mechanisms rely on the use of standardized or coarse work procedures, rules, policies, and manuals over units; and (4) centralization-based integrating mechanisms sustain decision-making authority at the corporate headquarters-a similar opinion to that in the “locus of strategic responsibility” section above.

The more global the firm, the more it uses these processes. Intel, for example, uses relatively few formal structural mechanisms, but any cross functional teams-including data technology (It), knowledge management, human resources, finance, legal, convert control, data warehousing, coarse directory data management, and cost discount teams-as integrating processes that allow them rapid adaptation to changing conditions. Integrating mechanisms can also have negative effects-perhaps tying the hands of local managers, imposing compliancy costs (both time and other resources), and creating unintended bureaucratic barriers to productive decision making. A study by David Brock and Ilene Siscovick, for example, found effects of integrative factors at subsidiary level were often negative.

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