MIXED STRUCTURE:

In order to manage the growth of diverse

operations, some firms have opted for
mixed forms of structures.
In a survey conducted by Dowling, more
than one third of the respondents
indicated that they had mixed forms and
18 percent had product or matrix
structures.
Beyond the matrix
Early studies of headquarter – subsidiary
relationships stresses the need for flow
of resources from head quarter to
subsidiaries.
However, in the large , mature,
multinational, these flows are multi-
directional, from headquarter to
subsidiaries or from subsidiary to
subsidiary and between subsidiaries.
As a result, the form of structure turns
into one of following three complex
networks of interrelated activities and
relationships:
• The hierarchy.
• The transnational.
• The network firm.
Each of the forms recognizes that when
firms go international
1.the need for matching superior structure
and strategy diminishes,
2.multinational at each stage is less
hierarchical,
3.the pyramidal form of structure is turned
to an integrated network.
The hierarchy
This structural form recognizes that a
multinational may have a number of
centers apart form the headquarters.
According to Hedlund, competitive
advantage does not necessarily reside in
any one country. Rather it may reside
any subsidiaries located in other parts of
the world.
Each subsidiary with competency may be
simultaneously a center and a global
coordinator of discrete activities.
As a result such subsidiary performs a
strategic role not only for itself, but also
for the MNE as a whole.
For example, some MNE may centralize
R&D activities in a particular subsidiary.
In a hierarchical MNE, control is less reliant
on the top-to-bottom mechanisms of
previous hierarchical MNE, and more on
normative mechanisms, such as the
corporate culture and widely shared
awareness of central goals and
strategies.
Its success appears to rest on the ability of
the multinational to formulate,
implement, reinforce the required HR
elements.
Hedlund argued that a new structural
form is required to allow for knowledge
management.
This form takes away divisions, allows for
temporary constellation and the use of
project teams and stresses on lateral
communication and dialogue.
The top management works as a catalyst
rather than resource allocator.
The use of mechanisms such as cross-
functional teams and empowerment of
lower level employees was also
advocated.
The Transnational
It is a form of organization characterized
by an interdependence of resources and
responsibilities across all business units
regardless of national boundaries.
It is a particular type of multinational
trying to cope with the large flows of
components, products, resources,
people and information among its
subsidiaries.
As a result it demands a complex process
of coordination and cooperation
involving strong cross-unit integrating
devices, a strong corporate identity, and
a well-developed world-wide
management perspective.
The multinational as a network:
An intricate crisscrossing of relationships
with one subsidiary act as a nodal unit
linked to a cluster satellite organizations.
Thus, one center can assume responsibility
for other units in its country or origin.
It is comprised of a network of exchange
relationships among different
organizational units including
headquarters and national subsidiaries.
The other organizational units include host
governments, customers, suppliers, and
competitors with which the organization
interacts.
The management of multi-centered networked
organization is complex.
Apart from the intra-organizational network
(comprising HQ and numerous subsidiaries),
each subsidiary has a range of external
relationships, such as local suppliers,
customers, host Govts, alliances, & so on.
Therefore, the management of both the
inter-organizational and intra-
organizational spheres and the total
integrated network is crucial to global
corporate performance.
It involves less hierarchical structure with
the following five features:
• Delegation of decision making authority
to appropriate units and level.
• Geographical dispersal of key functions
across units in different countries.
• Delayering of organizational levels.
• De-bureaucratization of formal
procedures and
• Differentiation of work, responsibilities,
and authorities across the networked
subsidiaries.
The place of HR Function in structural
forms:
There has been a few number of works on
how the HR functions develops in
response to structural changes as a
consequence of international changes.
A study on the changing role of HR
functions in 30 UK companies by
Scullion and Starkey found three distinct
groups as follows :
• Centralized HR companies, characterized
by large, well resourced HR departments
responsible for a wide range of
functions. The key role for corporate HR
was to establish and maintain control
over world wide top level management
positions (divisional and subsidiary
managers ) so that strategic staffing was
under central control.
• Decentralized HR companies,
characterized by devolving the HR
responsibilities to a small group who
confined their role to senior
management at corporate HQ.
Companies within this group operated
within product or regional based
structures, with only one reporting using
a matrix.
• Transition companies, characterized by
medium-sized corporate HR departments
staffed by a relatively small group at
corporate HQ. They operated in a
decentralized, product-based structure,
although again one company reported
using a matrix structure.
Different countries take different paths:
- European firms tended to take a different
structural response than their US
counterparts.
- Franko’s study on 70 European
multinational reveals that European firms
moved directly from a functional “mother
daughter ” structure to global structure
with worldwide product or area divisions
or to a matrix organizations.
- Hedlund studied the Swedish
multinationals and Swedish firms were
adopting a mixture of elements of the
mother-daughter structure and product
division.
- US firms that have experimented with
the matrix form appear to have met with
limited success.
- Japanese multinationals are evolving
along similar lines to their US
counterparts.
 US
European
Matrix Less hierarchical
Japanese

Global Division
Complexity of structure

International
Division

Mother-daughter

Dispersal of foreign units