International Business 10e

How Does Organizational Structure Change over Time?

• Organizational structure is the formal design of managerial hierarchies within a company, setting forth both reporting relationships and information flows.
• Structure plays a large role in shaping organizational culture as well, and companies may find it necessary to change organizational structure to remain competitive or adapt to changes in the company, industry or marketplace.
• 1. Involve employees from all levels of your organization in the planning stage. Solicit feedback from key front-line managers and employees to gain deeper insight into practical operational issues.
• 2. Communicate planning progress across the organization regularly. Send company-wide updates via email or your company newsletter to keep the change fresh in employees' minds for some time before the implementation phase. Avoid making employees feel blindsided by the change, especially if they are a target for downsizing.
• 3. Explain thoroughly the reasons for the change, as well as the benefits that the change will afford to individual departments and employees. Hold at least two meetings to detail the change; one with departmental managers and one with your entire office or organization, if possible.
• 4. Lead by example in the change initiative and enlist your top-level managers to do the same. Publicly show your commitment to the change through your informal conversations and the time that you spend planning for and communicating the details of the change.
• 5. Roll out the change one department at a time, if possible, to identify and address logistical issues early. Alter your change implementation plans if necessary after the first department is reorganized.

What Is the Global Matrix Structure?

• The global matrix structure – tries to minimize the limitations of the worldwide area structure and the worldwide product divisional structure
• allows for differentiation along two dimensions - product division and geographic area
• has dual decision making - product division and geographic area have equal responsibility for operating decisions
• can be bureaucratic and slow
• can result in conflict between areas and product divisions
• can result in finger-pointing between divisions when something goes wrong