Which structure organizes multinational enterprises according to different geographic areas?

Which structure organizes multinational enterprises according to different geographic areas?

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

Answer: (B)

The geographic area structure is specifically designed to manage multinational enterprises by organizing operations and decision-making according to various geographic regions. This approach allows a company to tailor its strategies, marketing, and operational practices to the unique economic, cultural, and regulatory environments of different areas. By focusing on geographic divisions, businesses can be more responsive to local market conditions and consumer preferences, enabling them to achieve greater effectiveness in those specific regions. This structure contrasts with other organizational forms, such as the global matrix or global product division, which might focus more on product lines or a balanced approach combining both product and geography but do not strictly prioritize geographic organization. The international division typically serves companies that are just starting to expand internationally rather than fully integrated multinationals that have distinct operations across multiple regions. Hence, the geographic area structure is the most suitable choice for managing enterprises based on geographic considerations.

The geographic area structure is specifically designed to manage multinational enterprises by organizing operations and decision-making according to various geographic regions. This approach allows a company to tailor its strategies, marketing, and operational practices to the unique economic, cultural, and regulatory environments of different areas. By focusing on geographic divisions, businesses can be more responsive to local market conditions and consumer preferences, enabling them to achieve greater effectiveness in those specific regions.

This structure contrasts with other organizational forms, such as the global matrix or global product division, which might focus more on product lines or a balanced approach combining both product and geography but do not strictly prioritize geographic organization. The international division typically serves companies that are just starting to expand internationally rather than fully integrated multinationals that have distinct operations across multiple regions. Hence, the geographic area structure is the most suitable choice for managing enterprises based on geographic considerations.