Globalization and Organization Strategy: Compliance Inc.

This case study analyzes the strategic choices of Compliance Inc. (CI) concerning globalization and organizational structure. The analysis begins by identifying the divisional structure as the likely organizational form under CI's multidomestic strategy, emphasizing product differentiation and cost competitiveness. The study then explores the organizational structure needed for a transnational strategy, recommending a matrix structure to balance global competitiveness with local responsiveness. The impact of organizational structure on value chain activities is discussed, highlighting the matrix structure's ability to standardize while adapting to market conditions. Finally, the study addresses potential obstacles CI might face in transitioning to a transnational strategy, including administrative confusion, cost implications, and the impact on customer preferences and competitive advantage. The analysis draws on various strategic management theories and frameworks to provide a comprehensive understanding of CI's strategic challenges and opportunities.

Running head: GLOBALIZATION AND ORGANIZATION STRATEGY 1
Compliance Inc. Strategy Case Analysis
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GLOBALIZATION AND ORGANIZATION STRATEGY 2
Compliance Inc. Strategy Case Analysis
Type of organizational structure that was likely to have been in place under CI multi-
domestic strategy
The main organization structure that the Compliance Inc. (CI) likely used was the
divisional structure. The main approach of this structure is to redistribute the responsibilities of
the company to match the specification requirement of the respective locations. Through the
divisional structure, the main approach would be to align the integration of products and cost i.e.
aligning the structure with the use of “Integrated Low-Cost/Differentiation Strategy. Also, the
approach of the strategy is to gain each market differential product focus and with the ability to
also maintain competitive advantage in cost (Hitt, Ireland, & Hoskisson, 2012).
According to the case study, the approach of the CI is to identify the pharmaceuticals
needs of each market region with needed product trial. This can be mainly characterized by the
different challenges and advantages that are accounted in the various location regions (Wheelen
& Hunger, 2011). The strategy of the company is to focus on maintaining product differential
where customer needs are able to meet with the required standards and requirements. The aim of
the strategy is to allow the company to be able to have different environmental change
adaptability (Lasserre, 2017).
Also, another major factor of the organizational structure approach is the maintenance of
a competitive advantage in the product cost. Through different economic locations of the
company, one of the main basic features in its strategy is to create differentiated products at
lower costs. With this, the customers are able to recognize the approach of the company to offer
product feature satisfaction and with low prices (Hitt et al., 2012). The company is also able to

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understand the specifications required for different customer segments and in line in maintaining
various competitive forces.
What type of Organizational structure will likely to be needed for the transnational
strategy
Generally, the transnational strategy is designed to create a more specific shared vision
and mission in an organization. The strategy emphasis is to also establish organization local
balance and most importantly maintain high degree in global competitiveness (Nadkarni & Barr,
2008). Through the application of transnational strategy, Compliance Inc. management should
focus on developing the Matrix organization structure. The structure ’s a hybrid of both the
functional and divisional structure. The combinational of the two allows the organization to be
able to focus on the product line requirements and in line reducing the internal complexity of the
company (Kapferer, 2012). Like in the multi-domestic strategy, the company will also be able to
have more environmental monitoring with a more increased utilization of resources. This will
increasingly help the company to be able to have strategic change in goal orientation emphasis
and thus also increasing its competitive advantage.
Impact of the organizational structure on the location of the particular value chain
activities
With the different locations set up of Compliance Inc. structure, matrix structure ensures
the standardization of the entire organization structure while it also focuses on the adaptation of
the various market conditions. The effectiveness of the structure can be considered extremely
high through the company exposure to vast learning outcomes. The conflicts in the value chain
are also decreased significantly through the adaptability of local branches which is aligned with

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the organizational culture. Also, as stated earlier, through the matrix structure the company will
increase the utilization of resources in functional structure thus also reducing cost in activities
such as inventory, production, quality control, and others (Nadkarni & Barr, 2008).
Obstacles that Compliance Inc. is likely to encounter in its attempt to change its
structure to support the transnational strategy
Through the change of the organization structure, the company will face various
challenges, especially in administration confusion and cost. The main branches will have to start
to strategize in its basic policies and plans that will be able to generate the required results in the
entire market. This is directly related to the change in authority projection where market
segmentation will also be affected due to the change in product differential (Kapferer, 2012).
Through the transition and change of the strategy, the performance and sales of the company
various locations will also be highly affected.
Normally, customers from the respective market segments are approached with different
characteristics wants and needs which are attributed through also different factors. In the
development of critical variables relationship in customer base, there will be a highly likely
chance of conflict in the product (Lasserre, 2017). On the same note, the company will also incur
a significant decrease in its competitive advantage due to also the decrease or change in customer
preference and majorly satisfaction. The change will also attract vast problems which will cause
major issues due to the poor reaction in the structure. This will also highly affect the entire staff
and employee performance where its also directly reflected on the company performance (Hill,
Jones, & Schilling, 2014).

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References
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2012). Strategic management cases:
competitiveness and globalization. Cengage Learning.
Kapferer, J. N. (2012). The new strategic brand management: Advanced insights and strategic
thinking. Kogan page publishers.
Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.
Nadkarni, S., & Barr, P. S. (2008). Environmental context, managerial cognition, and strategic
action: An integrated view. Strategic management journal, 29(13), 1395-1427.
Wheelen, T. L., & Hunger, J. D. (2011). Concepts in strategic management and business policy.
Pearson Education India.