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Organizational Structure and the Multinational Strategy
Lawrence E. Fouraker and John M. Stopford
Administrative Science Quarterly
Vol. 13, No. 1 (Jun., 1968), pp. 47-64
Published by: Sage Publications, Inc. on behalf of the Johnson Graduate School of Management, Cornell University
Stable URL: http://www.jstor.org/stable/2391261
Page Count: 18
You can always find the topics here!Topics: Subsidiary companies, Extractive industries, Industrial machinery, Diversity indices, Research and development, Manufacturing industries, Product lines, Employment, Financial investments, Business management
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Organizations that have a single or a few related product lines and a high degree of vertical integration tend to be capital intensive, and to be organized in a centralized, functionally-departmentalized structure. Organizations that have a diversified product line tend to have a decentralized, divisional structure. This paper indicates that the first type tends to concentrate on domestic markets, while the second type accounts for most of U. S. direct investment abroad. Expansion abroad requires diversification, reorganization, and the training of general international managers. The evidence suggests that the organizations that have been most successful in meeting this new challenge have been those that had previously acquired the ability to develop general managers capable of controlling and guiding a heterogeneous, diverse enterprise.
Administrative Science Quarterly © 1968 Johnson Graduate School of Management, Cornell University