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Cases Essay

4239 words - 17 pages

Gg
General Electric screen matrix (the General Electric (GE) business screen)
The GE screen matrix is essentially a derivation of the Boston Consulting Group’s Boston growth matrix. It was developed by McKinsey and Co. for General Electric as it had been recognized that the Boston Consulting Group matrix was not flexible enough to take broader issues into account. The GE matrix cross-references market attractiveness and business position using three criteria for each – high, medium and low. The market attractiveness considers variables relating to the market itself, including the rate of market growth, market size, potential barriers to entering the market, the number and size of ...view middle of the document...

The slowest moving are the economic and the socio-cultural.

Geographical structure
The organizational structure of a major business could be based purely on geographical regions. This could reflect the following possibilities:

• • •

that the market is sufficiently remote to warrant a replication of the organizational structure in its geographical region; that the factors of production are sufficiently attractive to set up a geographically-based structure; that the market requires specific support that can only be delivered in the geographical region and not from the remote central headquarters of the organization.

Global area structure
A global area structure configures the organization along the main areas (geographically) in which it operates. Typically, the globe would be split up into a series of general areas such that the business can assume that all functions can be carried out by a centralized headquarters within each region. The configuration may take the form depicted in Figure 23.

Corporate HQ (in home country and serving home country

Northern Europe

Southern Europe and Near East

Pacific region

G

Figure 23

A global area structure

Global learning
Global learning is a process by which a multinational organization ensures that skills and knowledge flow freely between the different parts of the business across the world, regardless of national boundaries. Global learning can take the following routes:

100

Key Concepts in Strategic Management

• • •

from the home country to an overseas division or subsidiary; from an overseas division or subsidiary to another overseas division or subsidiary; from an overseas division or subsidiary to the home country.

Global matrix structure
A global matrix structure is essentially a horizontal differentiation along product divisions and geographical divisions. In other words, to visualize the organization structure, product groups are placed on a vertical axis and the foreign divisions are placed on a horizontal axis. It allows businesses to reduce costs by increasing efficiency, and to differentiate their activities with innovation and responsiveness. The feature of the global matrix structure is that there is dual decisionmaking responsibility, as there is both a divisional and an area hierarchy. The system is not without its problems, as many organizations consider this form of structure to be rather clumsy and bureaucratic. There is also the question of slow decision making and a lack of flexibility. Several international businesses have sought to overcome the problems by basing their organizational structure on wide networks with a shared culture and vision, and stressing that the informal structures are more important than the formal structure itself. These forms of organizational structure are known as flexible matrix structures.
Egelhoff, W. G., ‘Strategy and Structure in Multinational Corporations: a Revision of the Stopford and Wells...

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