What is the global matrix structure?
The global matrix structure is a management structure that blends geographical area, product as well as the structures to take a maximum advantage of benefits of global business strategy while at the same time enabling the firm to respond to the local consumer as well as company needs. This structure is a combination of geographical area, product, and the organization’s functional structures and is closely associated with the transitional organization’s strategy. To make this strategy work, headquarter’s management should coordinate and control overseas operations while on the other hand responding to needs of each country separately. In this type of organizational structure, a foreign subsidiary reports project, structure and geographical area to the mother company which is responsible for managing its operations (Cavusgil, 2014) .
What are the advantages and disadvantages of this approach?
Global matrix structure has several advantages. First, it facilitates the use of well-trained workforce and equipment in operations of the company. Instead of redundancy of workforce and duties as in the case of a simple product department structure, global matrix structure allows sharing of resources needed. Further, highly specialized staff can divide time among many projects, therefore, promoting their functional expertise and exchange of ideas hence the growth of staffers. This strategy is best for global industries and firms that are growing rapidly due to its ability to share resources and avoid redundancy. Another key advantage of the global matrix is the ability of the managers to share decision making among themselves wherever they are. This enables best practices in firms operations and growth is realized as a result. It allows optimization of operational efficiency and competitiveness as well (FRANCIS, 2017) .
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References
Cavusgil, S. T. (2014). International business. Pearson Australia.
FRANCIS, A. (2017, 2 14). global-matrix-structure-of-mnes . Retrieved from www.mbaknol.com: http://www.mbaknol.com/international-business/global-matrix-structure-of-mnes/
