- Organizational structure or organizational space: .
- Organizational architecture or organization design: involves the creation of roles, processes, and formal reporting relationships in an organization.
3. Explain how an organization can be matched to strategy to improve the performance of an international business.
The strategy and architecture of the firm must be consistent with competitive conditions prevailing in the market place.
Organizational structure of UPP. (Photo credit: Wikipedia)
Multinational giant Philips NV’s organizational arcitecture has evolved over time. The Dutch company, which was internationally oriented almost from the start, moved to a national organization approach during World War II. This allowed the company to tailor its product line and marketing to each national market.
By the 1970s, Philips shifted toward a product division structure that established international production centers. In the mid-1990s, a new CEO implemented significant changes replacing Philips’ 21 product divisions with just seven global business divisions. This new structure was further refined in 2008 to establish three global divisions responsible for product strategy, global marketing, and production decisions.
What factors prompted Philips to change its strategy and structure in the 1990s? What challenges did the company face with its new approach?
3. Consider Philips’ current approach. What type of strategy is the firm following today? Does its structure fit this new strategy?
To explore Philips’ operations in more depth, go to the company’s web site at {http://www.usa.philips.com/}.
Philips recently made some changes to its international operations. Go to {http://www.businessweek.com/news/2011-10-17/philips-to-cut-4-500-jobs-globally-seeks-eu800-million-savings.html}
