Globalization and Change in Organizational Structure

In the beginning, it should be stressed that Mr. Jones decided to follow the directional growth strategy, neglecting the benefits that he could get from the stability one. In particular, the entrepreneur now adheres to the vertical integration approach, given the opening of some shops in other locations on the industry’s value chain. It seems apparent that the business will face a number of changes.

There will be shifts within the organizational structure – the company is now involved in the process of corporate development. It will be necessary to implement a functional structure when the entrepreneur is replaced by a team of managers. This more difficult governance approach – despite the related complexities in the organizational structure – may result in rational decision-making and suitable business solutions. Then, within the scope of geographic dispersion, there will be a notable advantage of the economy of scale, given a broader territory and customer segment coverage. However, it will be important to develop an appropriate market location strategy in order to better define where the company will implement its business strategy.

Given the reasoning above, changes in the business’s complexity are expected as well. It will be important to advance the company’s supply chain and establish productive relations with multiple suppliers, given the occurrence of new shops. It is also essential to adequately evaluate the competitive rivalry at the new locations, which should be done consistently and carefully, applying the recognized Porter’s Five Forces Model. If to compare the described changes, the ones in the business’s complexity contain the most issues to consider and deal with. Meanwhile, shifts in organizational structure and geographic dispersion are likely to bring considerable benefits.

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