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GSM Lecture 7Management > Global Strategic Management > Organising > Determinants of structure > Attributes of structure > International structure > International detail > Global detail Global structures - detailFunctionally-based This structure allocates foreign operations to functional line managers at the centre. Subsidiaries report to functional executives at the centre (production, finance, marketing). This enables greater control over operations within each activity, but inhibits co-ordination across activities. There is also a danger of duplication, and thus inefficiency, as many subsidiaries make multiple reports to the centre. Product-based Responsibility for foreign operations is deferred to the product divisions as HQ. This is suited to firms with diverse product lines and enables a quick response to competitors. However, there is a potential lack of international knowledge, hindering localised co-ordination of activities. Geographically-based Area executives deal with foreign operations, where subsidiaries report to a geographical division usually based abroad. This concentrates local knowledge and the proximity to local operations increases control. However, this reduces the number of reports to the centre, potentially inhibiting overall control of the business and a loss of strategic direction. Matrix Foreign operations are divided between product and geographical divisions, which although gaining the "best of both worlds", can cause conflicts of interest and confuses the hierarchy of the organisation. This type of global structure is for what a firm can aim after evolving through the previously mentioned structures.
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