Global Organising normally follows planning because the organisation must implement the strategic plan. The planning process itself, because it encompasses an analysis of all the firm's activities, often discloses a need to alter the organisation.

In designing the organisational structure, management is faced with two concerns:

  1. finding the most effective way to departmentalise to take advantage of the efficiencies gained from the specialisation of labour and
  2. Co-ordinating the firm's activities to enable it to meet its overall objectives.

Organisational Structure: Organisational structure provides a route and locus for decision making. It also provides a system, or a basis, for reporting and communication networks. The basics of an organisation chart are similar for both domestic firms and international firms. But since international firms have to face complex problems, the form of the organisational structure is specific to them. The structure of an organisation becomes complex with the growing degree of internationalisation.

Co-ordination among the branches/units: The different branches/units need to be well co-ordinated in order to make the organisational structure effective. Proper co-ordination smoothens communication between one branch and another. It is true that there are impediments to effective co-ordination. Managers at different units may have varying orientation. The geographic distance may be too much to ensure effective coordination.

Formal co-ordination can be ensured through direct contact among the managers of different branches/units. It can also be ensured by giving a manager of a unit the responsibility for coordinating with his counterpart in another unit. A number of international firms have adapted the practice of direct reporting to headquarters by managers.

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Principles of Management and Organisational Behaviour Topics