Which structure alleviates the disadvantages associated with both geographic area and global product structures?

Which structure alleviates the disadvantages associated with both geographic area and global product structures?

• A. Global product division structure
• B. Global matrix
• C. Geographic area structure
• D. National product structure

Answer: (B)

The global matrix structure effectively addresses the disadvantages inherent in both geographic area and global product structures by combining elements of both. This type of organizational framework allows for greater flexibility and responsiveness to different markets while still maintaining a focus on product specialization. In a global matrix structure, employees may report to both product managers and geographic managers, facilitating enhanced communication and collaboration across different areas of the company. As a result, this structure can reduce potential conflicts that arise from either a strict product-centric or a solely region-centric approach. Businesses can tailor their strategies according to local market needs while simultaneously leveraging global efficiencies and innovations across product lines. This dual reporting system encourages resource sharing, improves decision-making speed, and better aligns with diverse market demands, helping firms to achieve competitive advantage in an increasingly interconnected global landscape. The other structures mentioned do not provide the same balance and adaptability that a matrix structure offers. For instance, a global product division structure primarily emphasizes product lines over geographical considerations, which can lead to challenges in local responsiveness. A geographic area structure focuses on regional markets, but may overlook the strengths that can arise from product specialization on a global scale. Meanwhile, a national product structure is more localized and may not effectively support global operations, limiting its flexibility and responsiveness.

The global matrix structure effectively addresses the disadvantages inherent in both geographic area and global product structures by combining elements of both. This type of organizational framework allows for greater flexibility and responsiveness to different markets while still maintaining a focus on product specialization. In a global matrix structure, employees may report to both product managers and geographic managers, facilitating enhanced communication and collaboration across different areas of the company.

As a result, this structure can reduce potential conflicts that arise from either a strict product-centric or a solely region-centric approach. Businesses can tailor their strategies according to local market needs while simultaneously leveraging global efficiencies and innovations across product lines. This dual reporting system encourages resource sharing, improves decision-making speed, and better aligns with diverse market demands, helping firms to achieve competitive advantage in an increasingly interconnected global landscape.

The other structures mentioned do not provide the same balance and adaptability that a matrix structure offers. For instance, a global product division structure primarily emphasizes product lines over geographical considerations, which can lead to challenges in local responsiveness. A geographic area structure focuses on regional markets, but may overlook the strengths that can arise from product specialization on a global scale. Meanwhile, a national product structure is more localized and may not effectively support global operations, limiting its flexibility and responsiveness.