Question

Normally when a firm first expands overseas, it may use an international division and later use a different organizational structure. Under what circumstances might such a firm wish to shift back to the use of an international division?

Answer 1

For every business, it is important to have a proper organizational structure. This helps the firm to understand the need of the employees of the organization and helps in communicating information to the subordinates and also for better control. When a business is growing and when it finds the potential for international operation it may change its organizational structure to control the operations of a business in a more systematic and orderly manner. Therefore it creates a division to handle all the international operations. And this type of organizational structure is known as the International Division.

This type of organizational structure is maintained by firms that are in the developmental stage of international operations. This structure is built to handle international operations by the firm for control.

The main advantage of organizational division is that top-level management gets the main attention on international attitude and there will be a centralized approach for international operations. Therefore with this structure, the firms in their development phases of international operation create an idea about the international market with more controlled environment.