INTERNATIONAL ORGANIZATIONAL MODELS

Four international organizational models have been identified by Bartlett and Goshal (1993):

1. Decentralized federation in which each national unit is managed as a separate entity that seeks to optimize its performance in the local environment. This is the traditional multinational corporation. 

2. Coordinated federation in which the centre develops sophisticated management systems enabling it to maintain overall control, although scope is given to local management to adopt practices that recognize local market conditions. 

3. Centralized hub in which the focus is on the global market rather than on local markets. Such organizations are truly global rather than multinational, which is the case when adopting a federated approach. 

4. Transnational in which the corporation develops multi-dimensional strategic capabilities directed towards competing globally but also allows local responsiveness to market requirements.

Perkins and Hendry (1999) argue that notwithstanding this fourfold model, international firms seem to be polarizing around two organizational approaches: 1) regionalization, where local customer service is important; and 2) global business streams, which involve setting up centrally controlled business segments that deal with a related range of products worldwide.