368 Part 3: Strategic Actions: Strategy Implementation
The global matrix design brings together both local market and product expertise
into teams that develop and respond to the global marketplace. The global matrix design
promotes flexibility in designing products in response to customer needs. However, it has
severe limitations in that it places employees in a position of being accountable to more
than one manager. At any given time, an employee may be a member of several functional
or product group teams. Relationships that evolve from multiple memberships can make
it difficult for employees to be simultaneously loyal to all of them. Although the matrix
places authority in the hands of the managers who are most able to use it, it creates prob-
lems in regard to corporate reporting relationships that are so complex and vague that it
is difficult and time-consuming to receive approval for major decisions.
We illustrate the hybrid structure in Figure 11.10. In this design, some divisions are
oriented toward products while others are oriented toward market areas. Thus, in cases
when the geographic area is more important, the division managers are area-oriented.
In other divisions where worldwide product coordination and efficiencies are more
important, the division manager is more product-oriented.
The fit between the multidomestic strategy and the worldwide geographic area struc-
ture and between the global strategy and the worldwide product divisional structure
is apparent. However, when a firm wants to implement the multidomestic and global
strategies simultaneously through a combination structure, the appropriate integrating
mechanisms are less obvious. The structure used to implement the transnational strat-
egy must be simultaneously centralized and decentralized, integrated and nonintegrated,
formalized and nonformalized. Sometimes the structure becomes extremely complex, a
reality that challenges managers to remain vigilant in efforts to verify that the hybrid
structure is effectively supporting use of their firm’s transnational strategy.
When Panasonic Corporation (a Japanese company formally named Matsushita)
started selling home appliances in the Chinese market several decades ago, its only attempt
at localization was to offer less expensive versions of its developed market standard offer-
ings. Japanese firms often sold standard products across the world, implementing the global
strategy using the worldwide product divisional structure. However, they found that local
competitors such as Haier were quickly outpacing their appliance sales in China, Haier’s
home market. Through this experience, Panasonic learned to engage more deeply within
a country or regional market to adapt its appliances more closely to the local customer’s
demands.^92 As a result, the firm is using the transnational strategy and may be using the
hybrid form of the combination structure to implement it.^93 (Recently Panasonic’s portfolioFigure 11.10 Hybrid Form of the Combination Structure for Implementing a Transnational StrategyHeadquartersProduct
Division AArea 1 Area 2 Area 1 Area 2Product
Division BProduct A Product B Product A Product BGeographic
Area
Division 1Geographic
Area
Division 2