October 9, 2014
University of Phoenix
Tangelia Frazier This paper will explore and analyze the most appropriate organizational structures for three forms of work environments in MNCs, which are the traditional single-location organizations, network-based organizations and organizations with telecommuting relationships. Through discussing the advantages and disadvantages of each structure, the rationales will be demonstrated and a recommendation will be provide in conclusion.
Traditional single-location organizations While most traditional MNCs were national companies with foreign subsidiaries, facilities and other assets, the traditional single-location MNCs were the corporations who was located in one marketplace. They were MNCs at the initial stage of globalization and usually small or medium in size (Balogun 2007). The products of traditional single-location organization may reach the customers outside national boundaries through trading with foreign companies, and wholesalers. (Ozman 2010). Under functional structure, the management and employees within company were divided by their function, such as human resource, marketing, engineering, production. Each functional department, as a team, had staffs, supervisors and manager, who were overseen by top directors.
Employees within the functional divisions tended to perform a specialized set of skills, for example the finance department would be staffed only with accountants (Buhler 2011). An advantage of a functional organizational structure is that it offers a high level of specialization.
Each unit operates as a type of self-contained mini-company, charged with carrying out its specific role. The experts within the function divisions could share experience, improve coordination, solve problem in high quality as well as having better career path (Daft 2008, p90).
Secondly, the high level of centralization and coordination was another significant strength.
Staffs were subordinated to their functional manager, and these functional managers directly reported to their department directors who were overseen by the top director. This hierarchy management method enforced the efficiency of management and shortened the decision making progress, which made the organization a more professionally managed system (Daft 2008, p90). On the other hand, the weakness of functional structure could not be neglected. First of all, the most significant drawback was the poor coordination and communication cross different function groups, which made the organization slow and inflexible. Due to group awareness, different departments may see each other as competitors within in the organization and unwilling to share information and corporate each other (Carillo & Kopelman 1991). Additionally, lack of well-defined responsibilities between different departments may also occur due to the characteristics of this kind of structure. The reason for selecting functional structure for traditional single-location MNCs is based on the company size and degree of globalization. The corporations were based in domestic market place and served for the local market as privilege and then engaging in international business through trading with foreign operations. They were at the initial stage of globalization (Ozman 2010).
Network-based organizations Network-based organization was one kind of new corporation, which used social internet mechanisms for coordination and control (Fong 2005, p32). Lots of MNCs are network-based organizations, such as Cisco Systems Inc, Amazon.com and LogMeIn Inc, of which the products could be delivered via electronic channels, such as software and webpage design. According to the special characteristics of network-based organization, virtual structures could be the optimal structure to employ. The virtual