Profile the causes and likely benefits that prompt companies to consider adopting a neoclassical structure

What will be an ideal response?

Some MNEs, notably IBM and GE, find that the traditional structures, such as an area or product division, provide an inadequate format to respond to the demands of their dynamic environments and complex strategies. More precisely, managers note a rich set of triggers, including increasing international activities, expanding internal relationships, rising expectations of foreign customers, and growing power of knowledge-based strategies. Capturing these opportunities pushes managers to look beyond the range of traditional structures and consider contemporary formats that are better equipped to help them achieve outcomes such as keeping international and domestic personnel in closer proximity to each other in order to improve idea exchange and knowledge transfer. Successfully done, these sorts of actions help managers reset the roles and responsibilities dictated by the company's structure to let more employees, particularly those on the front line who deal more directly with resources and markets, have greater authority.

Several environmental trends further spur managers to engage contemporary formats. Specifically, lower trade barriers and cheaper telecommunications and computing capabilities enable a globally dispersed labor force to collaborate more easily. Both individually and collectively managers note that these developments encourage them to move from the classic structure of separate businesses organized in different countries to a worldwide company that can divide and parcel out work to the most efficient locations.