Question

1. Do you think that a MNE's strategy and organizational architecture are directly or indirectly related? Please explain.

2. Would you license or franchise? Please explain your selection. From your selection, name an entity that you would be a franchisee or licensee to and explain why you chose that particular entity.

Answer 1

1. In simple words, organizational architecture refers to the structure of the organization i.e. the way organizational processes, teams, systems, etc. are organized. I think that the strategy and the architecture of an MNE are related to each other. It is a widely-held management notion that structure follows strategy. MNEs are not exceptions to this. MNEs first develop a particular corporate strategy and puts an organizational architecture in place to execute the strategies. For example, if an MNE follows a single global strategy for all countries it operates, the MNE is most-likely to have a centralized structure in which strategic instructions come from the hearduarter and implemented in respective markets. On the other hand, if the MNE has customized strategies for different markets, the MNE is likely to have a more decentrilized architecture in which strategies are develped locally.