Question

A well-established global firm has over 60 percent of its sales outside of the home market and has a very broad product line that extends across almost all major world markets. It competes on global efficiencies as well as local responsiveness. The best organizational structure is likely to be a(n):

(a) Matrix structure
(b) International department
(c) Geographic structure

Answer 1

Answer) A. Matrix Structure because of this structure simultaneously deals with competing pressures of global integration and local responsiveness. It overlaps among functional and divisional forms and gives common focus to the product, functional and geographic groups. It makes each group share responsibility for foreign operations and enables each group exchange information and resources more willingly.

While in the geographic structure there is the potential of duplication of work among areas as the company locates similar value activities in several places rather than consolidating them in the most efficient place. And also the International division structure often struggles to get resources from domestic divisions and frustrates its ability to exploit economies of scale. Therefore, the answer is Matrix Structure.

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