Company- Parent Firm: Novo Nordisk

NOVO NORDISK
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Novo Nordisk
I will place the strategy of the parent firm in the transnational framework cell of the integration/responsiveness (I/R) theoretical framework. Multinational corporations in this cell exhibit high levels of integration and responsiveness by developing global efficiency, flexibility,
and worldwide learning. This feature is particularly important since the pharmaceutical company operates across various global boundaries and therefore requires a business structure that can aid it in achieving the required efficiency. With over 45,000 employees, 80 offices spread throughout the world, and marketing diabetes products in 169 countries, it is evident that Novo Nordisk requires an organizational structure that can ensure effective linkages between the different sectors and actors of the business, over and above, faster reaction times to local needs (Pratama et al., 2019). For instance, the company’s corporate governance must consider the applicable laws of each country while also allowing the company to function in a coordinated and efficient manner.
Novo Nordisk uses the matrix organizational structure to allow global assimilation and local responsiveness at the same time. The matrix structure is multidimensional and guarantees organized differentiation between divisions, businesses, and geographical areas. It is a two-tiered management structure involving a Board of Directors and Executive Management (Novo Nordisk, 2021a). The pharmaceutical company also employs dispersed, interdependent, and speculated resources and capabilities simultaneously (Kang and Hwang, 2018). Pharmaceutical companies require to simultaneously employ discrete but symbiotic factors of production and capacities to achieve low production costs and high production efficiencies. Since the company relies on R&D, production efficiencies, and other critical key performance indicators, it must coordinate all related activities in separate countries together in order to achieve operational and financial success.
The most appropriate organizational structure for the parent firm consistent with the transnational strategy identified previously is the matrix structure. Some of the matrix structure characteristics are: employees are typically accountable to several managers, and there are generally more than two disparate chains of command (Sytch, Wohlgezogen and Zajac, 2018). Besides, the matrix structure is meant to be moderately temporary. There are usually two kinds of managers: project managers and functional managers. The managerial roles tend to be fluid rather than fixed, and the balance of authority between project and functional managers is not always clearly separated (Sytch, Wohlgezogen and Zajac, 2018). A diagram of the firm’s organizational structure in business reality is shown below.
(Novo Nordisk, 2021b)
As is shown in the figure above, Novo Nordisk has a two-tier management structure entailing a Board of Directors and Executive Management. The Board of Directors is responsible for determining the company’s general strategy and supervises the e...