Global Organization Designs : Global Product Design

There are 5 most common forms of global organization design namely product, area,functional,customer and matrix. As for this discussion i will explained on Global Product Design.

Global Product Design

• It was the common form adopted by most MNC today.
• It assign worldwide responsibility for specific products or product group to separate operating division within a firm.
• This design work best when the firm has diverse product lines.
• If the product are unrelated, the firm takes on M-form design - Multidivisional - the various divisions of the firm usually self-contained operations with interrelated activities.
• If the product are unrelated, the firm takes on H-form design - Holding - various unrelated business function with autonomy

Advantages :

• Manager gain expertise in all aspects of the product
• Facilitates efficiencies in production because manager are free to manufacture the product
• Allow manager to coordinate production at their various facilities
• Manager able to incorporate new technologies into their product and respond quickly to technological changes
• Facilitates geocentric corporate philosophies - to develop greater international skills internally

Disadvantages  :

• Encourage expensive duplication because each product need its own functional area skills such as marketing and finance
• Coordination and corporate learning across product groups also becomes more difficult.