Geographic structure is a term that refers to organising an international company based on the area in which it operates; each area is responsible for operations in that area, while the corporate office directs global strategy.
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Under a global geographic structure, products are handled by regional divisions, which can adapt more readily to local cultures, regulations, economies and preferences. A geographic structure is essential in developing local contacts, according to "International Business" by Oded Shenkar and Yadong Luo.
At one time, a geographic structure was more effective for established businesses with more limited and stable product lines, but companies with a variety of faster changing products also benefit from a geographic structure.
Examples of companies that can benefit from a global structure are large manufacturers of electronic devices which are used worldwide but are subject to different regulations and consumer preferences. Food manufacturers must also tailor their products to cultural and regional preferences.
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