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International Business

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Executives who envision their organization as a geocentric multinational enterprise must understand the potential differences in how culture impacts organizational structure. The organization must recognize key differences that could impact their operations when expanding overseas. The main issue is the tendency of individuals to embrace the models of foreign organizations. Recognition that a business model developed in the United States of America may not be what is “best for business” in a country that already has an established business structure. The organization must be flexible during the expansion in order to fully understand the corporate culture that is already in place in a new region. The management team must be able to anticipate any potential problems that may arise when transferring practice from one country to another. A good example is in regards to acceptance of a matrix organizational structure. France and Germany were both resistant to this structure, however, for different reasons. The Germans felt they needed a more formal straight forward chain of management that clearly defined the roles and responsibilities within the organization. The French on the other hand did not like the structure because they felt there was a potential to disrupt loyalties and cause unwelcome conflict. In order to effectively establish the organization and become geocentric the organization must take into account the many potential problems that can arise from trying to only implement a structure that is familiar to their current culture. The inability to show flexibility during this phase will likely lead to a potential downfall of the organization within the new country. The ability to effectively identify and implement best practices from the new country and within the organization will in turn lead to a higher chance that the transition will be

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