Discuss the three-tiered ideal organizational structure of a multinational e-corporation. What are some of the essential functions served by the headquarters of the multinational e-corporation? Why should company headquarters not be responsible for local strategies?
Organization structure is that system of the organization/company which defines the role and duties of the employee in the organization. It describes the hierarchy of power and authority within the organization, and it also differentiate the top level executive to managers and executives from the workers staff.
Answer and Explanation:
There are many types of organizational structure like:
- Tall organization structure.
- Flat organization structure.
- Three tired organizational structure.
In the present scenario, organizations are minimizing the hierarchy level in the organization so that effective control can be maintained in the organization. Companies are trying to make the organizational structure flat, but it has some control related issues. That?s why a new type of organization structure is emerging in the modern times called three-tiered organizational structure. Basically, it is a type of flat organizational structure. Nowadays, many multinational e-corporations are adopting this organizational structure.
Three-tiered organizational structure is well suited for the multinational e-corporations, which has a widespread and global presence. In the three-tiered organizational structure, companies have three tires of management level
1) Top-level management - Board of directors, Chief executive officer and chairman
2) Middle-level executive - Regional, Divisional, and Subsidiary managers.
3) Bottom-level staff - Workers
Some of the essential functions served by the headquarters of the multinational e-corporation
- Headquarters provide guidance and assistance to other branches of the organization.
- Headquarters provide vision and mission to the organization.
- Headquarters is the permanent place of the organization, which earns the consumer trust for the organization.
- Headquarter integrates the different branches of the organization and provide effective leadership to expand and grow in the market.
Why should company headquarters not be responsible for local strategies?
Because, the headquarters cannot define the accurate conditions of the local market.
Headquarter of Multinational companies are located at a different place and perform the function at a different place. The change in culture and consumer preference and pattern are closely associated with the geographical location, and it may vary from place to place.
So if Headquarter of organization design local strategies, then it might not be effective because headquarter is lacking the essential information which might be important for expanding business at different place and location.
Learn more about this topic:
fromChapter 9 / Lesson 32
The organizational structure of management determines how the work within an organization flows. Learn what an organizational structure's function is and explore the different types of organizational structures through some examples.