Ch.6 - Designing Organizations for the International Environment

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Business Administration
BUS 304
Liz Wiebe

Chapter 6 Designing Organizations for the International EnvironmentEntering the Global ArenaMotivations for Global ExpansionoEconomic technological and competitive forces push a domestic force to a global oneoEconomies of ScaleGlobal presence expands operations so it can realize economics of scaleNew technology and production methodsincrease largevolume production reducing cost per unit large volume demand comes from beyond the domestic borders as well as volume discounts from suppliersoEconomies of ScopeScore number and variety of products and services a company offers as well as the variety of regions countries markets it servesHaving presence in multiple countries give marketing power synergy be global for your global customersMarket power knowledge of cultural social economic of different customers allowing more specialized products and services to meet those needsoLowcost ProductionOpportunity to obtain raw materials and other resources for a low costOther countries offer cheaper land electricity and water or be closer to major customers and suppliersStages of International DevelopmentoDomesticDomestically oriented but aware of global environment with initial foreign involvementDomestic structure functional or divisional with export departmentModerate market potential mostly domesticoInternationalExportoriented with multidomestic company deals with each country individually attitude
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