FESTOOL: International Management Report on Organizational Structure

This report examines the organizational structure of FESTOOL, a handheld tool manufacturer expanding into the European market. It begins by identifying the divisional organizational structure as suitable for initial international expansion, emphasizing the need for active employees and regional management. The report then recommends a tall organizational structure for improved operations, including roles such as CEO, managers, and functional heads. Furthermore, it suggests transitioning to a global functional division structure after three years to facilitate centralized control and functional expertise, aligning with the company's growth and international presence. The report concludes by highlighting the importance of these structures for FESTOOL's business activities and market expansion.

Running head: INTERNATIONAL MANAGEMENT
INTERNATIONAL MANAGEMENT

INTERNATIONAL MANAGEMENT
Table of Contents
Introduction......................................................................................................................................3
The type of organizational structure selected for the firm...............................................................3
Recommendations for change in the organizational structure.........................................................3
Suggestion for the organizational structure in the future.................................................................5
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

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Introduction
The main motive and the objective of the study have been to identify and describe the
correct organizational structure for the firm, which is going to expand in the European market for
further opportunities. In this study, an office manager will be appointed for giving suggestions
and recommendations for choosing the correct organizational structure for the firm. In this study,
the choosing of the organizational structure and the recommendations for the transformations in
the structure of the business entity after it has expanded in Asia has been described along with
some of the suggestions for the future time frame. In this study, FESTOOL has been selected as
the organization, which is one of the prominent companies of the handheld tools operating in the
market of the United Kingdom.
The type of organizational structure selected for the firm
It can be observed that a small business organization known as FESTOOL approached
and has been trying to identify and set up their business in the handheld market tools that are
manufactured for the local market. The FESTOOL is existent in the European market and now it
is trying to expand internationally. As per the expansion in the global market phenomenon, the
firm has selected the divisional organizational structure, where the roles and the functions of the
employees are divided and segregated into different segments (Nekovee & Pinto, 2019). At the
time of the expansion stage of the organization, the employees need to be much active and they
should perform their work in the most dedicated manner. The office manager who has been
selected will also select regional heads for monitoring the activities of the organization in the
regional marketplace (Johnson McPhail, 2016).
On the contrary, the divisional organizational structure of the FESTOOL also helps the
employees to be more competitive towards their work and thus finishing it within the restricted
timeframe.

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Recommendations for change in the organizational structure
It can be assessed that this business organization will ascertain the important business
markets in the European continent they will manage to enlarge their business in the international
market. They will also find a better market in the handheld tools in the Asian market and there
are some recommendations that the consulting firm will like to deliver for the change in the
organizational structure. The recommendations have been described below
As per the operations in the global marketplace, the tall organizational structure of the firm can
be suggested. With the help of more employment in the business organization, the tall
management or the organizational structure can be created.
Figure 1: Tall organizational Structure
(Source: Kaufmann, Borry & DeHart‐Davis, 2019)

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Within the tall organizational structure, the business entity must include one chairman,
Chief Executive Officer, General Manager and below him there will be various managerial posts
for each of the departments. It will include the post of the Operation Manager, Financial
Manager, Marketing manager, accounting manager, IT manager and the Human Resource
Manager. Each of the managers will handle and manage their team, which will help the
organization in expanding in the Asian market within the strict time period (Kaufmann, Borry &
DeHart‐Davis, 2019).
Suggestion for the organizational structure in the future
It can be assessed that after three years of international efforts; there should be some
changes in the organizational structure of the FESTOOL. After three years, it can be realized that
the firm will sell 50 percent of its output in the overseas. The suggestions for the change in the
organizational structure have been elaborated below
The FESTOOL should adopt the global functional division structure in that time frame.
Within the global functional division structure of the company, the functional department or the
divisions are much existent within the channel. It can be further noted that within this kind of
structure, the office manager controls all the operational departments and thus monitoring all the
production activities at the same point of time.
Figure 2: Global functional division structure
(Source: Albers, Wohlgezogen & Zajac, 2016)

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In the global functional division structure, the upper hierarchical members of the firm
control all the functional divisions and the members of the FESTOOL will also facilitate the
centralized controlling system over the department. On the other hand, the managers of the firm
will also establish narrow integrated product lines for adopting diverse strategies in order to meet
the objectives of the global functional division structure.
The FESTOOL should adopt this organizational structure after three years of the business
processes because the office manager can give and exert greater emphasis on the functional
expertise and thus employing the lean managerial workers for the organization (Fürstenberg,
2019).

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Conclusion
It can be concluded that the organizational structures are very important for the proper
formulation of the business activities of FESTOOL and also for enlarging the organizational
market to the other continents of the world. In the case of this small manufacturing firm, the
divisional, tall and global functional division structure is very appropriate and important that
should be applied in the different stages.

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References
Albers, S., Wohlgezogen, F., & Zajac, E. J. (2016). Strategic alliance structures: An organization
design perspective. Journal of Management, 42(3), 582-614.
Fürstenberg, F. (2019). Division of Labor. In The Bonn Handbook of Globality (pp. 571-580).
Springer, Cham.
Johnson McPhail, C. (2016). From tall to matrix: Redefining organizational structures. Change:
The Magazine of Higher Learning, 48(4), 55-62.
Kaufmann, W., Borry, E. L., & DeHart‐Davis, L. (2019). More than pathological formalization:
Understanding organizational structure and red tape. Public Administration
Review, 79(2), 236-245.
Nekovee, M., & Pinto, J. (2019). Modeling the impact of organization structure and whistle-
blowers on intra-organizational corruption contagion. Physica A: Statistical Mechanics
and its Applications, 522, 339-349.