You are the CEO of a European auto maker group (Audi) that is planning to launch

Question

You are the CEO of a European auto maker group (Audi) that is planning to launch a subsidiary in Detroit Michigan (USA). The size of the European company is the equivalent of a fortune 500 company in the USA. You are asked to research the market and international management issues, including finding detailed data. You should consider the broad auto industry in the USA but you will also be asked to find detailed information about the major companies that operate in that industry.

6) Select a structure for your firm. Discuss why you selected that structure.

Explanation / Answer

As Audi is a European auto maker, which is planning a subsidiary in Detroit Michigan (USA) the structure of the firm selected is Matrix Organizational Structure.

To be part of a fortune 500 company in USA calls for some autonomy, decentralised decision making, quick responses, efficiency, effective use of resources among others and being too rigid of a structure won't work in that scenario. Here matrix structure allows that autonomy and decision making capacity for the subsidiary to function.As the auto industry in USA is nearing quite evolved with strong existing players like BMW, Porche, Volkswagen among others. A matrix structure also allows for flexible use of resources and efficient use of support systems. To operate in an industry like automobiles, where the sales, marketing, manufacturing, R&D have to work in tandem with each other, the structure can't be expected to be too rigid and formal and to build some bit of inter operability a matrix works well where the resources can flow from one department to other and decision making is decentralised.

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