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In this chapter, we present the various organizational structures of MNCs, and we will learn about the many factors that influence an MNC’s selection of the proper organizational structure. Some of these factors are external forces and demands, such as economic conditions at home and abroad, host government policies, product-market characteristics, and information technology. Factors related to the firm itself are the history of the company, top management philosophy, nationality, corporate strategy, and degree of internationalization. We first discuss the development of an organizational structure designed to deal with the export of products to foreign markets. The subsequent major structural designs for MNCs, including the autonomous foreign subsidiary, the international division, the geographic and product divisions, and the matrix structure, are explained in this chapter. Finally, we describe the newer forms of organization, such as market-based and strategic business unit organizations, virtual corporations, and networks.
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