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Exhibit 7.3: A Basic Geographic Structure

Exhibit 7.3: A Basic Geographic Structure

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The Basic Product and

Geographic Structures

•• Managers

Managers choose

choose product

product structures

structures when:

when:

•• Product

Product or

or an

an area

area sufficiently

sufficiently unique

unique toto require

require

focused

focused functional

functional efforts

efforts on

on one

one type

type ofof product

product or

or

service

service

•• Hybrid

Hybrid structure:

structure: mixes

mixes functional,

functional, geographic,

geographic, and

and

product

product units

units



Copyright© 2005 South-Western/Thomson Learning All rights reserved



Organizational Structures to

Implement Multinational

Strategies

•• When

When company

company first

first goes

goes international,

international, itit seldom

seldom

changes

changes structure.

structure.

•• Passive

Passive exporter

exporter

•• Licensing

Licensing has

has little

little impact

impact on

on domestic

domestic structures.

structures.

•• However,

However, when

when international

international sales

sales become

become more

more

central,

central, structures

structures need

need toto be

be changed.

changed.



Copyright© 2005 South-Western/Thomson Learning All rights reserved



Export Department

•• Coordinates

Coordinates and

and controls

controls aa company’s

company’s export

export

operations

operations

•• Export

Export department

department

•• IsIs created

created when

when exports

exports become

become significant

significant

Deals

Deals with

with international

international sales

sales ofof all

all products

products



Copyrightâ 2005 South-Western/Thomson Learning All rights reserved



Exhibit 7.4: A Functional

Structure with an Export

Department



Copyright© 2005 South-Western/Thomson Learning All rights reserved



Foreign Subsidiaries

•• Subunit

Subunit ofof the

the multinational

multinational company

company that

that isis located

located inin

another

another country

country

•• Types

Types ofof foreign

foreign subsidiaries

subsidiaries

•• Minireplica

Minireplica subsidiary:

subsidiary: smaller

smaller version

version ofof the

the parent

parent

company

company

•• Uses

Uses the

the same

same technology

technology and

and producing

producing the

the

same

same products

products as

as the

the parent

parent company

company

•• Transnational

Transnational subsidiary:

subsidiary: has

has no

no companywide

companywide form

form

or

or function

function

•• Each

Each subsidiary

subsidiary contributes

contributes what

what itit does

does best

best

Copyright© 2005 South-Western/Thomson Learning All rights reserved



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Exhibit 7.3: A Basic Geographic Structure

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