Organizational structures must change to accommodate a firm's evolving internationalization in response to worldwide competition. Considerable research has shown that a firm's structure must be conducive to the implementation of its - strategy. In other words, the structure must “fit” the strategy, or it will not work. Managers are faced with how best to attain that fit in organizing the cornpany's systems and tasks.
The design of an organization, as with any other management function, should be contingency based, taking into account the variables of that particular system at that specific point in time. Major variables include the firm's strategy, size, and appropriate technology as well as the environment in those parts of the world in which the firm operates. Given the increased complexity of the variables involved in the international context, it is no easy task to design the most suitable organizational structure and subsystems. In fact, research shows that most international managers find that it is easier to determine what to do to compete globally (strategy) than to decide how to develop the organizational capability (structure) to do it. Additional variables affecting structural choices - geographic dispersion as well as differences in time, language, cultural attitudes, and business practices - introduce further layers of complication. We will show how organizational structures need to, and typically do, change to accommodate strategies of increasing internationalization.
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