Introduction
Companies are diversely affected by the cultural setting of a people. There is also global influence in the operations and productions of both domestic companies and multinational companies. As pertaining to cultural and global influence, we shall discuss the differences in the organizational structures available to a U.S domestic company, a Japanese domestic company and a multinational company.
It is foremost important to understand that organizational structure is defined as an arrangement of groups of jobs within an organization that consists of the reporting and operational relationships in hierarchical levels.
Organizational structures whether in American domestic companies, Japanese domestic companies or multinational corporations, must portray levels of permanence and should have personal structures that contain components such as departments, procedures and goals (Gibson, 2006).
It is to be noted that it is impossible for the three types of organizations to be studied to carry out their operations independent of each other, and thus their need for each other (Gibson, 2006).
However, the three kinds of organizations apply different organizational management that is heavily influenced by cultural setting. In the U.S. one strategy used by domestic companies is the laying off of workers in order to enhance decision making and cut down on costs.
However, this is almost an almost impossible strategy for the Japan companies to utilize since its culture is rooted on the belief in life employment and loyalty of its employees (Gibson, 2006).
However, it is good to note as per the words of Graubner (2006) that the rise of technology has made the U.S. companies, the Japanese companies and the multinational corporations similar in that they have created virtual organizations where managers, employees and customers connect digitally rather than physically.
He further states that U.S domestic companies opt for an organizational structure called nested circles to ensure that they are successful. At the center of this nested circle is the production cell, called a Work Unit which makes most of the decisions that affect the team members (Graubner, 2006).
There is a similarity in the insurance companies in the U.S. and in Japan. In both cases, the insurance companies have two common organizational forms namely the mutual and stock. However, unlike in Japan, the U.S. insurance industry is controlled by the state. It is also good to note that the Japanese insurance industry provide savings type of policies unlike in the United States.
The work culture in Japan dictates that a person’s place in the organizational hierarchy determines the degree of respect one is to be shown by those underneath him. According to their culture, it is strongly believed that one is not to undertake tasks not suited to his societal standing.
However, in the U.S, everyone sees themselves as equals with each other regardless of their status in the society. It is also good to note that during meetings, the Japanese do not argue or openly express their feelings in the same manner the Americans do.
Instead, decisions are made in a quiet manner outside offices through discussions that lead to general agreement between employees and managers. Such discussions are held outside in social places, a practice the Americans see as impractical (Graubner 2006).
Since multinational corporations operate in more than one country, there is a need for each department found in each country to operate individually in line with the culture of the residing country while still serving the interest and policies of the whole corporation. Thus, they cannot be wholly assimilated into the cultural practices of a country.
They thus have a greater effect of global influence upon their structures and organization. This is unlike the domestic companies in the U.S and Japan which enjoy a centralized form of organizational structure based on their internal structures and the cultural and social practices of the two countries and thus have less global influence upon them than the multinational corporations (Gibson, 2006).
Multinational corporations have organizational structures entailing basic business functions like finance and marketing, and consider means through which success can be obtained in foreign markets.
Also, their organizational structures are determined by various factors such as the global strategy of the firm and the size of international operations unlike the U.S and Japanese firms which only place into consideration their domestic operations. This is not possible in domestic companies that operate in small scale levels in various countries (Gibson, 2006).
There exist four basic organizational structures in multinational corporations namely: the global area, the global product division, the matrix and the International Division (Newman, 2009).
There is also the diversification of multinational corporations’ activities due to the complication of processes in the dynamic and global world these corporations operate in. The international divisional structure has traces of autonomy in its production units that creates room for issues such as scientific research, leadership strategy development, and investment policies (Newman, 2009).
The Coca-Cola Company, which is a good example of a multinational corporation, has an international division type of organizational structure. This structure actually represents an evolved form of organizational system due to its combination of special divisions that play a role on foreign markets thus can easily operate in other countries.
Other multinational companies have Global Product Division Structure that ensures the presence of a global planning strategy. However, this strategy is considered to be less responsive to domestic markets in different countries (Newman 2009).
In Japan, the business world consists of its set of values and behavioral patterns which must be taken into account when talking about organizational structure of Japanese companies. The amae concept is a concept in the Japanese corporate world stating that managers should protect the employee and look into the employees’ welfare either directly or indirectly.
This concept is a highly valued form of relationship between the organizational structures of the Japanese domestic companies. However, in the U.S domestic companies, the relationship between employees and employers is strictly official. Also, in the Japanese organizations, there exists protection of employees by the employer.
This protection is in the form of increment in salary and benefits. In return, the employee’s loyalty is guaranteed. The longer the period in which an employee has served an organization the higher the salary of the said employee (Newman 2009).
However, in the U.S domestic companies, appraisals are not based on loyalty and time durations which an employee has served an organization but on performance evaluation processes. However, multinational corporations consider the practices and cultures of the operational countries and use these practices to carry out appraisal.
In Japanese organizational setting, the act of employees socializing with their superiors after working hours is seen as a normal business practice. Through this, they establish friendship and trust through the organizational structures thus leading to increased profitability.
Top executives of companies often have a lifetime employment with one company without the change of jobs though other employees often change work in search of better pay and working conditions. In Japan, organizations hire employees straight from school depending on the education levels and the school the potential employee attended so as to develop loyalty in upcoming workers.
Such practices are unheard of in the domestic U.S companies where relationship between workers remains official and socialization is seen as a hindrance to performance (Graubner 2006).
According to Graubner (2006), Japanese companies allow socialization within them because they believe that through this practice they can develop and nurture the organizational culture in the young employees. Japanese workers do not view organizational hierarchies in a favorable manner.
For this reason, managers in Japan use medium size companies which have limited number of employees and controlled operations unlike in multinational corporations and domestic U.S companies. Japanese companies are also known to practice collective decision-making; an example can be illustrated in the practice carried out of circulating consultative memorandums around a company for the purposes of attaining a consensus.
In Japan, workers freely air their suggestions and grievances to managers and are also allowed to propose improvements in the company though most companies in both Japan and the U.S and also in the Multinational Corporations are still using the top-down hierarchy management system and an individual manager is responsible for the final decision (Newman 2009).
Conclusion
There are similarities and differences between U.S domestic, Japanese domestic companies and multinational corporations. The similarities mostly come in because of the technical structure of companies, while the differences are human based because of cultural conditions.
In conclusion it can be stated that an effective organizational structure must ensure that there is a smooth working relationship between the various branches of the organization, and should improve efficiency within an organization’s units regardless of whether it is a multinational or a domestic organization.
The structure should allow for the use of the skills of employees so as to encourage creativity. Organizational structures must be changed from time to time to ensure that the organization is always profitable, and is aligned to the changes that occur in their targeted segment.
References
Gibson, J. L. (2006) Organizations: behavior; structure; processes (12th ed.). Chicago, IL: Irwin ISBN: 9780072987171
Graubner , M. (2006), Task, firm size, and organizational structure in management consulting: an empirical analysis from a contingency perspective; European Business School oestrich-Winkel.
Newman, M. (2009), ‘Organizational Structure of Multinational Companies.’ Web.