The organization structure of the business environment can be an methodology that helps and courses in managing the employees of the organization into a organized and organized design for better coordination and communication. The framework in a multinational company defines the architecture of the business enterprise competence, functional romantic relationship and management function. It can help in reducing dilemma available environment and also facilitates in undertaking the business enterprise function smoothly and efficiently. The business structure is affected by various inside and external factors which are also known as the organizational environment since firm works around these factors and the surroundings (Baumueller, 2007).
The organizational environment includes all those factors that influences the organizational working and thus can also impact the organizational structure since in each country and physical areas the organizational environment would change. The exterior organizational environment that could effect the organizational framework is the economic, politics and legal, socio-economic, technological and natural factors. Each one of these factors of organizational exterior environment affects the selection of organizational composition since organizational structure which the corporation chooses immediately or indirectly would be damaged by the changes in these factors (Baumueller, 2007).
The exterior factors that influence the organization framework are the economic factor which gives information about the market size and the rivals strategy and the manner in which the group should be organized to meet the companys goals. The demand and offer for the product or service combined with the wages and salary composition impact on the organizational structure of the company. The organization structure is also influenced by various political and legal factors and really should maintain accordance with the norms and plans of the government. The company should plan the organizational composition in accordance with the rules and guidelines of the country and should not avoid the guidelines as it might create consequences in the future.
The company also has to pay credited importance to the many socio-economic factors and the psychographic and demographic factors as all the factors have direct effect on the organizational composition. The business should keep into consideration the culture, ideals and values of the society and accordingly arrange for the structure in order to meet out the goals. Technological factor is again one of the influential factors while selecting the organizational structure for a multinational company.
Technology has quickened the communication circulation from one degree of organizational structure to some other which has inspired the organizational structure in a big way. Technology has also reduced the individuals resource requirements in multinational companies which has thus, directly affected the organizational composition since how many amounts of employees required or hierarchy required is based on the quantity of work and the task that might be performed by those employees. Technology has increased the efficiency of the organization by helping the business to more accurately and easily (Jeannet & Hennessey, 2005).
The environment where the multinational companies encompass also affect their organizational framework since multinational companies performs at different geographical locations that have differences in the timings, whether conditions and does not match with the subsidiary working in another country which thus, becomes a crucial point at the time of selection of organizational composition (Baumueller, 2007).
The employees culture, environment, vocabulary, values, etc is highly recommended, so as to avoid the impact on the organizational composition. The organizational composition is further afflicted by the scale and the type of the company. The internal factors also play a very important role and have an impact on the organizational framework (Moran, Harris & Moran, 2007).
The interior factors like how big is the company have a great impact on choosing and selecting the organizational composition. The size of the business can be identified by the geographic and product selection of the company. The business size can be explained as the area of operation this is the region covered by the company. The scale helps the business in choosing the optimum organizational structure in order to conduct the business enterprise procedures effectively and proficiently. The company needs to go for a powerful organizational structure to attain its desired goals and goals (Moran, Harris & Moran, 2007).
The companys product range and services also has a direct effect on the organizational structure of the business. The company has to choose the best organizational composition to handle the procedures related to the merchandise and its own range as well as the assistance properly. The company has to arrange for various departments and devices in order to carry out the business procedures within an appropriate manner and must choose the best organizational framework for proper coordination and communication among the various branches (Moran, Harris & Moran, 2007).
Apart from these factors one of the factors that impact the selection of organizational composition by Multinational Companies will there be strategy. The strategy that the company is using should be an sign which organizational structure to adopt since with each of different strategies there's a specific organizational framework that needs to be followed to accomplish the task with an increase of efficiency. There will vary types of strategies that multinational companies can take up while launching the merchandise in the new or the old market that includes the differentiation strategy, cost management strategy, concentration strategy etc. It is quite a truth that each of these strategies could impact the organizational framework of the business since the implementation of the strategies would be done in various manner. As per their programs, company could use the ways of achieve its goals (Baumueller, 2007).
