ABSTRACT
This chapter describes the evolution of the organizational structures that United States (US) firms have developed during the course of their expansion abroad. All business enterprises have some form of hierarchy of authority and responsibility. This hierarchical attribute of structure is so widespread that it is generally accepted as an inevitable fact of business life. The chapter explores two types of organization: functional departments and quasi-autonomous divisions. A hierarchy of functional departments is normally used by firms that have a single product line in a single country. Quasi-autonomous divisions are generally established by firms as they begin to add new product lines or to enter new national markets. Expansion abroad adds complexities to the management task that are similar in some respects to the complexities introduced by the decision to enter a new product line. The initial autonomy of the first few foreign subsidiaries reflects the fact that most US manufacturing firms stumbled into manufacturing abroad without much design.
