BU398 Chapter Notes -Gender Role, Market Power, Organizational Culture
Document Summary
Motivations for global expansion: economic, technological and competitive forces have combined to push many companies from a domestic to a global focus. Economies of scale building a global presence expands an organization"s scale of operations, enabling it to realize economies of scale. Economies of scale also enable companies to obtain volume discounts from suppliers, lowering the organization"s cost of production. Low-cost production factors the opportunity to obtain raw materials and other resources (cheap labour) at the lowest possible cost. Companies have gone international in search of lower costs of capital, sources of cheap energy, reduced government restrictions, or other factors that lower the company"s total production costs. Global companies are considered as stateless corporations whose businesses transcend any single country: domestic stage. Joint venture is a separate entity created with two or more active firms as sponsors; strategy is used to lower costs, share strengths and risks, take advantage of partner"s knowledge.
