In a multinational structure, production, sales, and marketing are decentralized and financial management remains the parent company’s responsibility. So the company’s subsidiaries operate autonomously but regularly report to the parent company. Another company that has a multinational structure is Nestlé, which uses 140 different financial systems at its subsidiaries around the world. The company’s multinational structure is an advantage because it reduces the need for communication between subsidiaries and headquarters, allowing subsidiaries to make many decisions on their own. Local hardware and software vendors influence which applications a multinational company chooses. Inevitably, each subsidiary operates on a different platform, and uniform connections are economically impractical.
An organization with a global structure, some-times called a “franchiser,” uses highly centralized information systems. Subsidiaries have little autonomy and rely on headquarters for all process and control decisions as well as system design and implementation. Consequently, an extensive communication network is necessary to manage this type of organization, and a GIS fits well into this structure.
Unfortunately, the integration needed to manage production, marketing, and human resources is difficult to achieve with a global structure because of the heavy reliance on headquarters. To achieve organizational efficiency, duplicate information systems have to be developed. Products are usually created, financed, and produced in the headquarters’ country, and subsidiaries have the responsibility of selling, marketing, and tailoring the products to their countries’ requirements and tastes.
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