This paper investigates the fit between strategy and structure for a decentralized global firm that may organize along product and geography dimensions. Organization serves two purposes. First, it provides for the management of spillovers across product lines and across geographies. Second, it structures the incentives of local managers as they compete against other firms. With respect to management, a matrix is the optimal organization for the management of conflicting spillovers, and either a product or a geography organization is optimal when spillovers are complementary. A matrix organization thus does not fit a globalization strategy based on the two principal drivers of globalization, economies of scale and scope, since those spillovers are complementary. When spillovers are conflicting, however, and a matrix organization is optimal, the decentralized firm achieves the optimal performance of a centralized, Stackelberg leader. The theory is compared with the organization of two global firms, ABB and Unilever.
-
Faculty
- Academic Areas
- Awards & Honors
- Seminars
-
Conferences
- Accounting Summer Camp
- California Econometrics Conference
- California Quantitative Marketing PhD Conference
- California School Conference
- China India Insights Conference
- Homo economicus, Evolving
-
Initiative on Business and Environmental Sustainability
- Political Economics (2023–24)
- Scaling Geologic Storage of CO2 (2023–24)
- A Resilient Pacific: Building Connections, Envisioning Solutions
- Adaptation and Innovation
- Changing Climate
- Civil Society
- Climate Impact Summit
- Climate Science
- Corporate Carbon Disclosures
- Earth’s Seafloor
- Environmental Justice
- Finance
- Marketing
- Operations and Information Technology
- Organizations
- Sustainability Reporting and Control
- Taking the Pulse of the Planet
- Urban Infrastructure
- Watershed Restoration
- Junior Faculty Workshop on Financial Regulation and Banking
- Ken Singleton Celebration
- Marketing Camp
- Quantitative Marketing PhD Alumni Conference
- Rising Scholars Conference
- Theory and Inference in Accounting Research
- Voices
- Publications
- Books
- Working Papers
- Case Studies
-
Research Labs & Initiatives
- Cities, Housing & Society Lab
- Corporate Governance Research Initiative
- Corporations and Society Initiative
- Golub Capital Social Impact Lab
- Policy and Innovation Initiative
- Rapid Decarbonization Initiative
- Stanford Latino Entrepreneurship Initiative
- Value Chain Innovation Initiative
- Venture Capital Initiative
- Behavioral Lab
- Data, Analytics & Research Computing