Organizational Structure Of Multinational Enterprises

1882 Words Apr 9th, 2015 8 Pages
Organisational structure refers to the formal reporting relationships and systems within an organisation. Browaeys & Price described it as ‘the way an institution is organised to carry out its objectives and pursue its projects’. Back in 1979 Chandler stated organisational structures are a crucial tool for the integrated use of existing resources within the organisation.

Informal structures follow a set of unofficially prescribed, evolving relationships and patterns of interaction within an organisation and whilst commonplace in smaller businesses they are rarely suitable for complex multinational enterprises with worldwide operations. They can however develop naturally within the organisation’s smaller departments. The focus will be on alternative formal structures that Multinational Enterprises may adopt, and their implications. Initially a brief outline of each alternative structure will be provided, followed by a discussion on their relative advantages and disadvantages. There are a few characteristics that have to be present for a formal organisation to exist, these are: a deliberate division of power and labour, a written set of rules, policies and procedures and finally a system for replacing members.

Once a company is established as a multinational enterprise they must restructure operations accordingly to manage multinational activities and enforce their new strategies. Although more basic forms of formal structures have been identified and researched they are…
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