Custom «Multinational Internet Retailer: Organizational Structure and Culture» Sample Essay
Designing an organizational structure is a challenging process for multinational internet retailer. As one of the main characteristics of the enterprise, the organizational structure has undergone significant changes, evolving from simple linear forms to more complex multi-dimensional ones. As a specific form of organization of activities, multinational company, on the one hand, requires hierarchical control methods to manage all its divisions efficiently. On the other hand, it needs decentralization for a successful operation in a complex and multifaceted relationships that involve a variety of different, often opposing cultures. Thus, the question of choosing and developing an organizational structure that would be adequate to the environment and allow implementing the company’s strategy becomes critical for multinational internet retailers (Navaretti & Venables, 2004).
Therefore, considering the mentioned peculiarities of work of multinational internet retailers, it is possible to assume that matrix organizational structure is the best choice. Matrix organizational structure is based on the principle of dual subordination when the decision-making is partially performed at the level of the relevant functional and linear units, without turning to the top management (i.e. differentiation of the management). However, it is imperative that the governing powers of the linear and functional guidance centers do not overlap, which is important in the case of multinational internet retailers. The potential of the matrix structure is unlikely to be used if the management of the organization does not take the necessary steps to resolve conflicts and to avoid the disruption of authority and responsibility, particularly due to the cultural differences (Mills, Bratton, Helms Mills, & Forshaw, 2006).
Thus, despite the possible drop in manageability, the selection of matrix organizational structure is justified by the fact that in contrast to the basic one-dimensional structures (functional and divisional), formed based on a single principle for differentiation, matrix structures are multidimensional. They include several elementary structures and, respectively, have multiple principles of differentiation. As a result, matrix structure can satisfy the dual needs of the multinational internet retailer (the needs for hierarchical control and decentralization) (Mills et al., 2006).
As it was mentioned before, conflicts are unacceptable in the matrix organizational structure. Therefore, a multinational internet retailer needs a corresponding organizational culture that addresses the problem of cultural diversity within the company. The best option is to create a multicultural organization, which does not only uphold cultural diversity but also uses the capabilities of other cultures. As a result, this allows reducing the costs associated with staff turnover and attracting new specialists, receiving qualified national personnel, increasing the level of creativity, and ensuring organizational flexibility. In general, multinational internet retailer will acquire the ability to operate in countries with different cultures with maximum efficiency, through flexibility and consideration of other values and beliefs. It will also gain intercultural communication, cultural sensitivity (the desire to understand another culture), and cultural adaptation (the ability to take up the specific cultural contexts) (Schein, 2010).
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Thus, the organizational culture of multinational internet retailer must not be monolithic. Nevertheless, there must be a dominant organizational culture that expresses the core values shared by the majority of the personnel. It should include the components of the global perception of organizational culture that distinguish one organization from another. Without a dominant culture, the importance of corporate culture as an independent component of the organization would be considerably less because there would not be a single view of a behavioral norm. However, emphasizing the role of the dominant culture, the value of the sub-cultures that are no less affected by the behavior of members of the organization must not be neglected (Schein, 2010).
After the development and implementation of the organizational structure and culture, it is imperative to assess them in order to measure their success. Culture is based on the fundamental values and assumptions that are often not realized. Thus, the characteristics of the culture can be identified and described only by a deep understanding of quality artifacts, myths, and legends prevailing in the organization. Therefore, it is possible to use qualitative methods for its assessment. When measuring the success of the organizational culture, one can use the following approaches (Schein, 2010):
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- “Immersing” into the culture, taking the role of an observer, and trying to assess the culture from the inside;
- Using samples of documents, statements, stories, and conversations prevailing in the organization in an effort to identify and assess the elements of culture;
- Using questionnaires and conducting interviews for the assessment of specific manifestations of culture.
As for the organizational structure, the results from its implementation include the improvement of financial performance, increase in manageability, and growth in the productivity of the organization. Therefore, it is desirable to assess it using quantitative methods and dividing all of its indicators into the following groups (Mills et al., 2006):
- Indicators characterizing the efficiency of the control system that are expressed in terms of the end results of the organization and management costs: an increase in output, profits, cost reduction, savings in capital investment, quality of products and services, and the timing of the introduction of new technology;
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- Indicators that characterize the organization of the management process, including direct benefits and costs of administrative work. These are current expenditure on the maintenance of management, operation, hardware, maintenance of buildings and facilities, training and retraining of the personnel as well as the torque costs for research and design work for the development and improvement of control systems, and purchase of computers and other equipment.
Therefore, by utilizing the proposed methods, not only it is possible to measure the success of the organizational design in structure and culture, but also define the main ways of their improvement in the future.
In conclusion, it can be said that for a multinational internet retailer, the problem of selection and implementation of the corresponding organizational structure and culture becomes of paramount importance as these concepts are intertwined. Any organizational structure is formed by the people who are the carriers of the basic cultural values of a particular society.
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