Exam 6: Designing Organizations for the International Environment

Correct Answer:

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The global product division structure and global matrix structure are two different organizational structures used by multinational companies to manage their global operations.

The global product division structure is organized around the company's products or product lines, with each division responsible for a specific product or product line. This structure allows for a high level of specialization and focus on the development and marketing of specific products. Each division operates as a separate entity with its own resources and functions, such as marketing, sales, and research and development. This structure is often used by companies with a diverse product portfolio and a need for strong product expertise.

On the other hand, the global matrix structure is organized around both product lines and geographic regions. In this structure, employees report to both a product manager and a regional manager, creating a dual reporting relationship. This allows for better coordination and communication between different parts of the organization, as well as the ability to leverage resources and expertise across different regions and product lines. This structure is often used by companies with a global presence and a need for strong coordination and collaboration across different parts of the organization.

Here are the diagrams for each structure:

Global Product Division Structure:
[Product Division 1]
- Marketing
- Sales
- R&D
[Product Division 2]
- Marketing
- Sales
- R&D
[Product Division 3]
- Marketing
- Sales
- R&D

Global Matrix Structure:
[Product Division 1] - [Region 1]
- Marketing
- Sales
- R&D
[Product Division 1] - [Region 2]
- Marketing
- Sales
- R&D
[Product Division 2] - [Region 1]
- Marketing
- Sales
- R&D
[Product Division 2] - [Region 2]
- Marketing
- Sales
- R&D
[Product Division 3] - [Region 1]
- Marketing
- Sales
- R&D
[Product Division 3] - [Region 2]
- Marketing
- Sales
- R&D

In conclusion, the global product division structure and global matrix structure each have their own advantages and disadvantages, and the choice between the two depends on the specific needs and goals of the multinational company.