What is the global area division structure?

| March 16, 2014

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A structure that involves growth through geographical expansion. The MNE strives to adapt its HRM activities to each host country’s specific requirements. It is a more decentralized structure. As the MNE grows it moves to a more “think global, act local” paradox. In this structure the headquarters divides up the organization based on geographic area, instead of product or service. For example, you may have divisions for North America, Latin America, Middle East, etc.
Country of origin influences the firm’s approach to organization structure. As MNEs from China and India internationalize, to what extent are they likely to differ from that observed for Japanese, European, and US MNEs?
The Chinese like to maintain family control of their businesses. This will become more and more difficult as their international activities continue to expand. Shen’s 2001 study of ten Chinese firms, mostly state owned enterprises from various industries, reports an incremental approach. They would start by moving into neighboring East and South East Asia before expanding into North America. Global area divisional or global functional structures were utilized. There is little information on both Chinese and Indian MNEs. It is yet to be determined exactly what will happen when they do internationalize.
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Choice of Human Resources as a Project Manager
Which society, Gupta India or Han China, was more successful?

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Category: Human Resource Management

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