summary daft chap.6
TRANSCRIPT
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Stages of International EvolutionStages of International Evolution
1. DOMESTIC
Initial entryinto foreign marketsthrough exporting
2. INTERNATIONAL
Companyhasa departmentor division forinternationalsales
Itis doing businessin morethanone country.
3. MULTINATIONAL
Well established overseas withsubsidiaries & facilities
Structureis probablyahybrid
4. GLOBAL
Corporate culturenotoriented toanyone country
Operationsaregeographically dispersed worldwide.
Extremelylargeand complexstructures
1. DOMESTIC
Initial entryinto foreign marketsthrough exporting
2. INTERNATIONAL
Companyhasa departmentor division forinternationalsales
Itis doing businessin morethanone country.
3. MULTINATIONAL
Well established overseas withsubsidiaries & facilities
Structureisprobablyahybrid
4. GLOBAL
Corporate culturenotoriented toanyone country
Operationsaregeographically dispersed worldwide.
Extremelylargeand complexstructures
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Common Ways to Go InternationalCommon Ways to Go International
Licensing
Joint Ventures Partnerships
Outsourcing
Acquisitions Mergers
Join theArmy
Licensing
Joint Ventures Partnerships
Outsourcing
Acquisitions Mergers
Join theArmy
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Organizational Designsfor Global AdvantageOrganizational Designsfor Global Advantage
Three major factors determine structure. ..
1. SCOPE (Extent of foreign operations) How many countries
What % of market share in each
What % of sales is foreign sales
2. SIZE of the organization. In terms of sales
Relative to the competition
3. NATUREOF PRODUCTS and or services Are they global(Coke)
Are they culturally tailored
Three major factors determine structure. ..
1. SCOPE (Extent of foreign operations) How many countries
What % of market share in each
What % of sales is foreign sales
2. SIZE of the organization. In terms of sales
Relative to the competition
3. NATUREOF PRODUCTS and or services Are they global(Coke)
Are they culturally tailored
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Global GeographicDivision StructureGlobal GeographicDivision Structure
CEO
Pacific
Division
European
Division
Latin
American
Division
Canadian
Division
Corporate
Staff
Long-term
Planning
Product
CoordinatorsGeographic divisions enable
Multi-domestic strategies
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DomesticHybrid Structurewith
International Division
DomesticHybrid Structurewith
International Division
ScientificProducts
Division
Research &
Development
Human
Resources
MedicalProducts
Division
Europe
(Sales)
Electrical
Products
Division
Corporate
Finance
International
Division
Brazil
(Subsidiary)
Mid East
(Sales)
Staff (Legal,
Licensing)
CEO
Some global product divisions
and some multi-domestic
products that require cultural
tailoring.
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Global Matrix StructureGlobal Matrix Structure
International
Executive
Committee
Power
Transformers
Germany NorwayArgentina/
Brazil
Spain/
Portugal
Transportation
Industry
Business
Areas
Country Managers
Local
Companies
Balances product interests of both product standardization and
geographical localization.
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Transnational ModelTransnational Model
Nohierarchy to speak of except withinsubsidiaries
No one subsidiary canhave an impact
without coordination and integration amongother subsidiary managers.
Alliances are established to facilitate change.
Gives autonomy to the subsidiaries
Makes subsidiaries more flexible andresponsive to local/regional needs.
Nohierarchy to speak of except withinsubsidiaries
No one subsidiary canhave an impact
without coordination and integration amongother subsidiary managers.
Alliances are established to facilitate change.
Gives autonomy to the subsidiaries
Makes subsidiaries more flexible andresponsive to local/regional needs.
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Transnational Model of
Organizations
Transnational Model of
Organizations Assets and resources are dispersed worldwide into
highly specialized operations that are linkedtogether through interdependent relationships.
Structures are flexible and ever-changing.
Subsidiary managers initiate strategies andinnovations that become strategy for thecorporation as a whole.
Unification and coordination are achievedprimarily through corporate culture (sharedvisions and values), and management style ratherthan through formal structures and systems
Assets and resources are dispersed worldwide intohighly specialized operations that are linkedtogether through interdependent relationships.
Structures are flexible and ever-changing.
Subsidiary managers initiate strategies andinnovations that become strategy for thecorporation as a whole.
Unification and coordination are achievedprimarily through corporate culture (sharedvisions and values), and management style ratherthan through formal structures and systems
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MatchingOrganizational Structure toInternational Advantage
MatchingOrganizational Structure toInternational Advantage
Global Geographic
StructureMulti-domesticHighLow
Global Matrix
Structure
Globalization and
Multi-domesticHighHigh
Global Product
StructureGlobalizationLowHigh
International
DivisionExportLowLow
StructureStrategy
And Forces forNational
Responsivenessare . . .
When Forcesfor GlobalIntegration
are . .
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Doing Business InternationallyDoing Business Internationally
Saksplanned to open a store inChina in timefor the BeijingOlympics but, due to the
bureaucratic red tape,permits, and otherlegal issues, the games were over beforeconstruction could even begin.
Bertlesmann,Europes largest magazine
publisher, tried for decades to extend theirsuccess into the U.S., but eventually sold offtheir U.S. assets as a billion dollarexperiment gonehorribly wrong.
Saksplanned to open a store inChina in timefor the BeijingOlympics but, due to the
bureaucratic red tape,permits, and otherlegal issues, the games were over beforeconstruction could even begin.
Bertlesmann,Europes largest magazine
publisher, tried for decades to extend theirsuccess into the U.S., but eventually sold offtheir U.S. assets as a billion dollarexperiment gonehorribly wrong.