Organizational Change Essay Example for Free

Organizational Change Essay Structure for Multinational Corporations: Converting a business into a Multinational organization is a complex task as it involves controlling of multiple variables with the internal and external environment of the corporation growing considerably. In order to make the task of structuring the organization easier, many multinationals simply opt to organize their business according to their geographic location and the placement of their international operations. This form of an organizational structure is simply known as the geographic based structure. However other forms of organizational structuring are also possible like â€Å"worldwide functional, worldwide product, international division, area, and matrix structures. † (Daniels, Pitts, Tretter, 1984) It is also possible for a multinational organization to have a mixed type of organizational structure which is a combination of the above mentioned structure types. The reason for this is because no organization has a finite environment and as a result it experiences different personnel dynamics. Some of the complications which come about due to these personnel dynamics are that â€Å"there may be uncertainty about who has the authority over certain decisions, especially if dual relationships exist with line and staff personnel. Managers may continue to use old labels even though the organization has changed; or a structural type may be referred to before it is completely in place. † (Daniels, Pitts, Tretter, 1984) Problem Statement: The problem that has been identified for the multinational corporation in this case is the lack of a proper chain of command for authority and delegation, which is required. This means that the organization now needs to be structured in order to have a systematic flow for operations and reporting both in the international locations and well as the local ones. Factors Effecting Multinational Corporations: The factors that are affecting this organization particularly relate to the diversity in its international locations which is going to influence the organizational design. The changes in organizational parameters such as size, diversity, foreign activity, and personnel deployment patterns often lead to shifts in multinational structure. † (Daniels, Pitts, Tretter, 1984) Other factors that influence the structure of the organization include the culture of the personnel in the working at the international locations, their work ethics, the training provided to the locals in the international locations, the kind of operations being carried out in the international location and the priority of these operations relative to the worldwide operations of the business. The Stopford and Wells model helped in identifying that multinationals with a low percentage of foreign sales and product diversity usually have structures based on the international division while those having higher degree of product diversity and low percentage of foreign sales are based on worldwide product division structures. â€Å"The international strategies involve relatively high percentages of foreign sales and the supporting structures tend to be high integration structures† (Egelhoff, 1980). Organizational Structure for the Organization: The symptoms of the problem mentioned above show that the staff of the organization at the international location is demoralized and has no sense of belonging to the organization. This is true due to the undefined nature of the corporation. By specifically identifying the chain of command and authority levels, a link between the international branches and the head office will be created which will help in encouraging a sense of belonging and purpose in the personnel. The structure of this organization will be such that the center of command and operations would be the head office in the U. S. There would be regional division based on the geographic location with a regional head office in every region. These regional head offices will be monitoring the operations in countries which come under their jurisdiction. In this manner, the reporting in the organization will be hierarchical, with the international operations reporting to their regional head quarters and the regional headquarters reporting to the head quarters in the U. S. Using this hierarchy, their would be localized operations in each country with a code of conduct dictated by the headquarters in the US. This will allow for cultural diversity in the international operations and help satisfy the personnel that they are not second class to those in the U. S. office. As the regional head office will be monitoring and controlling operations in the countries which come under it, the complaints and conflicts between the international operations will be handled by the regional head quarters whose decision would be much more acceptable to the personnel in the international offices. This kind of organizational structure will be matrix in nature where is will be dependent on the geographic location of the operations as well as the functionality of the operation divisions. â€Å"Organizing as a matrix helps bridge the gap between the international division’s inherent weakness and the commitment for fully integrated operations. †(Herbert, 1984)