How Do Global Differences Affect Organizational Structure?

Are there global differences in organizational structures? Are Australian organizations structured like those in the United States? Are German organizations structured like those in France or Mexico? Given the global nature of today’s business environment, this is an issue with which managers need to be familiar. Researchers have concluded that the structures and strategies of organizations worldwide are similar, “while the behavior within them is maintaining its cultural uniqueness.”48 What does this mean for designing effective and efficient structures? When designing or changing structure, managers may need to think about the cultural implications of certain design elements. For instance, one study showed that formalization—rules and bureaucratic mechanisms—may be more important in less economically developed countries and less important in more economically developed countries where employees may have higher levels of professional education and skills.49 Other structural design elements may be affected by cultural differences as well.

Photo of Zhang Ruimin.

Zhang Ruimin is the chairman and CEO of Haier Group, a Chinese maker of home appliances. After taking over a failing refrigerator plant, Ruimin reorganized the company into project teams comprised of members from different divisions that focused on producing quality products based on customer needs. The new structure helped Haier return to profitability, compete globally, and become the world leader of major appliances by sales volume.

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