International Strategy and Organization (2)

International Strategy and Organization





Organizational structures

There are different types of organizational decision making structures. The major types of these structures include the independent, decentralized, centralized decision making structures. The advantage of independent decision making structures is that it has low communication requirements. The disadvantage of independent structure is that they can neither take the advantage of economies of scale nor pool resources in a simpler manner. In addition, the independent structures are characterized by relatively uninformed decisions as they do not know what takes place elsewhere due to failure to learn from people’s experience in different places (Malone & Team, 2013).

The advantage of centralized structures is that individuals can regularly make excellent decisions when more information is used. The managers can also share finest practices between stores, be able to recognize the best suppliers as well as capturing the economies of scale. In other circumstances, fresh technologies makes it is likely for the personalized, home-grown decisions to be carried out at national level. The disadvantage of this structure is that it has considerably higher requirements for communication hence costly. Another problem is that the stores for the individuals tend to vary greatly in terms of colors and sizes that are sold. Decentralized structures also have the advantage in that decisions can be made based on vast amount of remote information that exist via networks or electronic media. They at times cooperate with one another in addition to competing some other times thus resulting to quality results (Malone & Team, 2013).

The role played by a firm’s strategy in determining organizational structure

In this case, the firm’s strategy of fresh technology implementation which transforms the structure of the management process as well as enhancing the capacity to center on customer service. This implementation of fresh technology comes with relatively low cost and personal computers having sophisticated software and operating systems that are graphically based. This reduces the danger or risk of the change process for the firm (Yetton, Johnston & Craig, 2012).

Meaning of horizontal differentiation and its possible implications to how managers design the company structure

Horizontal differentiation is a situation where by the equilibrium prices goes up whenever the disparity of population goes down. This can help the managers to enhance the effectiveness of the design structure in addition to affecting the design of the hierarchy of the organizational structure (Gabszewicz & Wauthy, 2012).


Malone, T. W., & Team, L. Y. (2013). Is empowerment just a fad? Control, decision making, and IT. Sloan management review, 38(2).

Yetton, P. W., Johnston, K. D., & Craig, J. F. (2012). Computer-aided architects: a case study of IT and strategic change. Image.

Gabszewicz, J. J., & Wauthy, X. Y. (2012). Nesting horizontal and vertical differentiation. Regional Science and Urban Economics, 42(6), 998-1002.

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