Problems With International Organizational Structure
Organizational design is meant to enhance business functions, designate the reporting structure between management and employee layers and facilitate communications. When a company expands internationally, the existing organizational structure can be stretched and may be inappropriate to the long-distance management and communication needs of international partners and employees. Modifications can offer temporary solutions for international support, but an overall organizational design shift may be needed for long-term management oversight.
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Communication
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Geographic distances inherently cause some communication difficulties. Managers on a different continent many need to adjust their communication methods based on time-zone differences and variations in work schedule. Standard communication channels established by the organizational design need to be adjusted to accommodate language differences and the need for real-time responses. In the short term, opting for emails, off-hour meetings and delegated communication authorization can help bridge gaps. Long term, the organization structure should allow local communications for employees, partners and customers.
Managerial Control
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Managing international operations can be difficult without immediate visibility and onsite reviews. Companies that have high managerial control needs may need to adjust their organizational structure to place managers at the local level rather than at a centralized headquarters. At a minimum, most companies need to delegate more responsibility and authority to local market employees. Companies with a distribution-only international presence can use a centralized management structure more effectively than a company with manufacturing, retail sales or heavy local customer support needs in other countries.
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Employee Reviews
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Accurately assessing employee performance can be difficult when direct managers are in a different country. Phone calls, emails and infrequent in-person meetings do not provide enough insight into a worker's daily behavior and work quality to create an objective performance review. Additionally, differences in culture, business climate and work duties can make comparing employee successes and deficits difficult between regions. Organizational structures that allow for performance evaluations on a local level are often a necessity for growing multinational businesses.
Decision Making
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A complex organizational structure can make decision making difficult even in single-location facilities. Adding an international component to the mix can delay decisions, impact potential sales and makes supporting employees and customers difficult. An international structure should focus on a streamlined decision-making process that shifts some of the responsibility for decisions to the local or regional level.
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