Structuring the Global Organization
To implement their strategies on a global scale, global organizations must design appropriate structures that take into account the demands and complexities of their changing environments, such as the diversity of offerings/businesses as a function of the geographical region in which the firm operates. The strategic role of subsidiaries and how they integrate into the overall system have changed and should be considered in the design of the firm—especially the kind of flexibility needed in managing vertical and lateral flows of information as well as integration of various functions. This chapter discusses three different types of design: decentralized federation, coordinated federation, and centralized hub in terms of their significance in accomplishing flexibility, national responsiveness, and the need for global integration. One significant development is the use of global networks and international teams composed of technically competent people who are dispersed across spatial, temporal, cultural, and organizational boundaries.