Organizational Structure and Multinational Strategy: An Overview

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Essay synopsis:
L. E. Fouraker & J. M. Stopford - Organizational Structure and the Multinational Strategy (p. 47 – 54)

Organizations constitute an important part of society. Parsons (1960) said that with organizations it is possible to “get things done”, and “achieve goals beyond the reach of the individual”. However, organizations may face continuous structural change, as A. D. Chandler’s “Strategy and Structure” (1966) suggest. Lawrence E. Fouraker, a Business Administration lecturer, and John M. Stopford, a research associate at the Harvard Graduate School of Business Administration analyze this work in their paper titled “Organizational Structure and the Multinational Strategy”. The following is a brief synopsis of the same.

To begin with, a historical outline is given of how company resources were acquired and used. According to Chandler, there was an “initial expansion and accumulation of resources” (qtd. in Fouraker and Stopford 1968: 48), then followed by a reduction of these utilized resources, an opening out into new markets, and eventually the development of an entirely new structure. These four stages in time, according to Fouraker and Stopford lead to distinctive organizational structures. The so called Type I – organization is a basic organization that is seen to be the extension of the head of the company, and hence reflects the same “interests, abilities, and limitations” (qtd. in Fouraker and Stopford 1968: 48) of the chief and/or founder. It is characterized by its focus on the production of a single product only, and furthermore, stresses a single task, leaving little or no flexibility in terms of adaptation to new market developments. The problem solving or decision-making always leads to one individual who carries all burdens. This might also be explained by the philosophy or mind-set of the management (“command and control”). Having a very basic organizational design, the marketing orientation (as per Kotler and Armstrong 2006) that...
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