Question

When would an MNE use a global area structure? When would the firm reject this structural arrangement in favor of a different structure?

Answer 1

Ans.

Multi National Enterprises (MNE) when they expand their operations from home country to global level , initially they will restrict to the same model and global area structure even for the global operations as it use in the domestic market.
As and when their foreign operations expand they will try to rejects this structural arrangement in favor of a different structure. They will move to a structure that suits the foreing operations to grow and meet the local cultural requirements and ways of doing business in the global countries.
Take the example of IBM, HP, Microsoft etc., when they expanded to global countries initialy they retained the structure as in the home market and as they evolved they adopted to different structures depending on the geography and target markets.