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Abstract
One of the most enduring ideas of organization theory is that an organization''s structure and management process must ''fit'' its environment, in the same way that a particular horse might be more suited to one course than another. Ghoshal and Nohria show the continued relevance of this classic insight for the organization of multinational corporations. They offer a simple scheme to classify the environment and structure of MNCs. Then, based on data on forty-one large MNCs, they show how some combinations of environment and structure fir better than others. What drives fit is the principle of requisite complexity - the complexity of a firm''s structure must match the complexity of its environment. Though developed for MNCs, their argument can also apply to multidivisional firms that operate in different markets or business segments.
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Abstract
One of the most enduring ideas of organization theory is that an organization''s structure and management process must ''fit'' its environment, in the same way that a particular horse might be more suited to one course than another. Ghoshal and Nohria show the continued relevance of this classic insight for the organization of multinational corporations. They offer a simple scheme to classify the environment and structure of MNCs. Then, based on data on forty-one large MNCs, they show how some combinations of environment and structure fir better than others. What drives fit is the principle of requisite complexity - the complexity of a firm''s structure must match the complexity of its environment. Though developed for MNCs, their argument can also apply to multidivisional firms that operate in different markets or business segments.