Page 53 - DMGT548_GLOBAL_HRM

Global HRM

Notes The structural response, at this stage of internationalisation, can be either a product – or service-
based global structure or an area-based structure.
1. Product/service based global division: In this structure; the company treats each of its
major products as distinct Strategic Business Units (SBUs). Divisions/functions at the
corporate office are given worldwide responsibility for production, finance, marketing
and management of supply chain for each product or product line. These product divisions
also have internal functional support.

Figure 3.5: Global Product Divisions

Chief Executive Officer

Headquarters
Corporate Human
Production Marketing Finance
Product Division Resource
Operating
Divisions
Product A Product B Product C Product D Product E

South America Africa Europe Australia Far East
Great Britain
France
Germany
Netherland

Production Marketing Finance Personnel

Source: Gupta S. C., International HRM (2006) p. 138

Figure 3.6: Global Area Divisions

Chief Executive Officer
Headquarters
departments
Production Marketing Finance Human Resource

Operating divisions

South America Africa Europe Australia Far East

Production Marketing Human Resource

2. Area based global division: In this structure; a multinational prefers to division its foreign
operations on the basis of geographical unit rather than on product basis. The corporate
structure at the HQ remains as in case of product-based division. The HQ is responsible for
transferring excess resources from one country to another as required and to establish
coordination between different countries to provide synergy and overall goal achievement.

48 LOVELY PROFESSIONAL UNIVERSITY