Geographic Organisational Structure

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  • Created by: ccorr
  • Created on: 06-05-20 13:36

Geographic Organisational Structure

Advantages

  • 1. Local Managers provide local consumers with products that satisfy their needs. This helps to increase customer loyalty.
  • 2. Friendly Competition- There is friendly competition between the geographic units. Each unit tries to outdo the others in terms of increasing sales and reducing costs. This helps to increase profits for the entire business.
  • 3. Promotion- Managers in geographic units make decisions on behalf of the business in their region. This helps them to prepare for future promotion opportunities.

Disadvantages

  • 1. Duplication of work- There may be duplicate departments working in different geographic areas, with employees doing the same job.This increases business costs.
  • 2. Conflict between management- Decisions made my senior management for the entire business can have a negative effect on local areas.
  • 3. Communication may poor between the different geographic areas. The development of new products/processes may not be shared, which can result in organisational inefficiency.

Evaluation

International IT firms such as Microsoft use a geographic organisation structure with sections of the business located in Africa, Europe, North & South America, Asia & the Middle East.

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