Question

Do you think that having an international division is the best structure for managing Wal Mart's foreign operations?

• What problems might arise with this structure? What other structure might work.

Answer 1

Answer: I don’t feel that international division structure will work well for Wal-Mart. This structure is best suited for the organizations that are a startup or sell expertise and have small scale operations for example law firms, export firms and so on. Secondly it creates two separate camps within the organization which is not a good thing for organizations like Wal-Mart that require control over its operations at the international level. This also hampers the ability of the organization to take advantage of the economies of scale that it enjoys because of centralized purchases. This structure may also make it difficult for the organization to act strategically and allocate resources at the global level. In fact the global area division structure may work better for the firm as it allows the international and domestic operations to run simultaneously and create a focus on a geographic area which is required for developing local responsiveness. This will also help the organization to develop economies of scale at the area/regional level.