ORGANIZATIONAL STRUCTURE

International Marketing Approach: Organizational Structure

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International Marketing Approach: Organizational Structure

Introduction

Organizational structure refers to those set of activities that are associated with are targeted towards achieving organizational objectives. These activities may also include coordination, task allocations and supervision. Organizational structure may also be considered as a perspective through which employees idealize the organization performance. The structure of an organization can affect its action in two different ways. First, it establishes a platform over which standard operating procedures are settled. Second, it identifies the individuals that should be involved in the decision making process in order to shape the functions in the organization. In this paper, we will discuss the same concept with a global perspective and identifies different types of the organizational structure in an international setting with examples.

International organizational structure

Organizational theory dominates the structural issues in international marketing, and requires that the structure should reflect the developed strategy of the organization. Structure is generally concerned in answering the question like, who does what? The answer is largely dependent on the strategy that the organization is pursuing. While strategy is concerned with questions like, what should be done? The answer of which is associated with environment essentials. Thus, there is a linear relation in the causation from the environment to strategy to structure. In order to deal with international business activities, there are a number of ways in which an organization can shape its structure. There are four ways in which international organizations can shape their structures, which are, functional structure, product structure, area structure and customer structure. We will discuss these categories and derive example of organizations pursuing each structure, separately (John, Gillies, 1996).

International Functional Structure

When work is, categorized on the basis if difference and commenced in a different department, an organization shapes its structure on the basis of its functions. For example, when all the marketers in a company work, in marketing and all the accountants of the company, works in accounts. Then in case of an international organization all the standardized business units, geographical, business concerns and product lines refer these centralized units as different companies all together, and not as various departments of the same entity. This helps the organization in developing standardized process for each of its various functions and maintaining economies of scale, for example, placing a centralized order for a commonly used doohickey that can be distributed worldwide. However, it may be difficult at times to effectively guide a single product or commodity through all the processes and departments. Theses organization should focus on specializing job skills to its employees and control a centralized authority of command. We can take an example of an organization where recruiting function is done in the United States, finances are administered form Italy, while marketing department is based on Thailand, and this structure will be termed as international functional structure (Miyamoto, 2008).

Royal Dutch-Shell, for example, is one of those organizations that adopt international functional structure. The production and refinement of crude oil depends ...