Exam Technique Advice

Choice of a Regional Structure Over a Functional Structure (AQA Paper 2 2019, Q3.2)


Last updated 29 Oct 2020

Here is a suggested answer to a past exam question on why a multinational business may have chosen a regional rather than a functional organisational structure.

Regional Versus Functional Structures | AQA A Level Business | 2019 P2 Q3.2

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Possible response

The need for Galin to be able to respond to what the case study describes as “significant differences in market conditions and external environment” in each region is a key reason why it chose a regional organisational structure. For example, Galin will probably face strong domestic competitors in each region who have a detailed understanding of customer needs and wants in Galin’s household product markets - and are able to adapt their marketing mix to make it effective. A regional structure is much more likely to allow Galin to employ management who have similar deep expertise about market conditions in each region, thereby allowing Galin to ensure its products are responsive to local needs (for example in terms of pricing, branding or distribution). This is particularly important for the consumer product markets in which Galin operates where, if it had a functional structure, management might develop inappropriate brand names or products that do not comply with local regulations.

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