Though global organizational structures tend to depict certain kind of rigidity, structure tends to change and new trends emerge. Mixed Nature of Structures Because of growth dynamics, companies change their organizational structures. Simplified organizational structures get replaced by complex or mixed structures. Until organizational re-structuring is made, new acquisitions might report to headquarters. Circumstances prevailing in a particular country, product, or function might necessitate separate handling until a re-structuring is effected, apart from the overall structure. The structure of 100% subsidiaries is different from that of JVs. 100% subsidiaries enable a deeper network of communications. Overall structure may be incomplete and less revealing. PepsiCo is organized by product lines, namely soft drinks and snacks. This would seem to imply that each product line is integrated globally. However, each line has its own global division, which separates it from domestic operations. Structures Evolve to Suit Growth and Need A company that Continue reading
International Business Management
Effect of Portfolio Capital Flows in an Economy
The notion that one can make inferences about the characteristics of financial flows by just observing their label is not new in economic. There is much convention wisdom that show capital flows reflect speculative, unstable behavior while flows reflect evaluations of long run profitability and are based on fundamental economic condition. The flows of funds approach used by many central banks and others for a analysis of the domestic economy developments is based on labels which are deemed meaningful. This view has also been an important part of the traditional analysis of international finance for many years. In fact, the structure of balance of payments accounts reflects an implicit theory that different types of capital flows have different economic implications. For example, the distinction between short-term “hot money” and long-term capital flows undoubtedly reflects the view that short-term capital movements are speculative and reversible while long-term capital flows are based Continue reading
The Potential Impact of Multilateral Framework on Investments (MFIs)
The development of an Multilateral Framework on Investment (MFI), if such a framework were to be negotiated, would represent a change in the policy-framework cluster of determinants. Although such a framework might also affect some elements of business facilitation (such as investment incentives), it would not involve significant and direct changes in the principal economic determinants. Indeed, by making Foreign Direct Investment (FDI) policies potentially more similar, an MFI would underline the importance of economic (and business facilitation) factors in determining FDI flows. The precise effect of an MFI on the policy-framework cluster of determinants would depend on its content, including definitions, scope and safeguards. Because an MFI is only a hypothesis, three scenarios, based on differing assumptions, are discussed below for purely analytical purposes. The specific implications of each scenario would vary from country to country in accordance with specific economic and developmental conditions and specific national stances vis-a-vis Continue reading
Global Supply Chain Management – Drivers and Activities of Global Supply Chain
Nowadays with globalization, global supply chain management is becoming a very important issue for most of businesses. The main reasons of this trend are procurement cost reduction, purchasing risks control, revenues increasing and etc. For instance, companies may set up overseas factories to benefit from tariff and trade concessions, lower labor cost, capital subsidies, and reduced logistics costs in foreign markets. Moreover, easy access to abroad markets and close proximity to customers result better organizational learning. On the other hand, improved reliability can be obtained as a consequence of closer relationship with suppliers. There are some issues that should be considered in managing a global supply chain. First of all, the company should decide about its general outsourcing plan. For whatever reason, businesses may prefer to keep some aspects of supply chain nearer to home. The second issue that must be incorporated into a global supply chain management strategy is Continue reading
Advantages and Disadvantages of Mergers and Acquisitions
In 21st century businesses are the game of growth. Every business want the optimum market share (growth) over their competitors, so companies are trying to get optimum growth by using the most common shortcut i.e. Merger and Acquisition (M&A). The growth main motive is financial stability of a business and also the shareholders wealth maximization and main coalition’s personal motivations. Mergers and acquisitions (M&A) provides a business with a potentially bigger market share and it opens the business up to a more diversified market. In these days it is the most commonly use methods for the growth of companies. Merger and Acquisition (M&A) basically makes a business bigger, increase its production and gives it more financial strength to become stronger against their competitor on the same market. Mergers and acquisitions have obtained quality throughout the world within the current economic conditions attributable to globalization, advancements of new technology and augmented Continue reading
Multinational Marketing Information System (MMIS)
In general, marketing research is the process wherein vital information pertaining to the market is gathered thru data acquisition and is analysed in order to help the senior management reduce the risk associated with decision-making thru the means of an effective information dissemination system. Because of this, the marketing research tool plays a vital role in the overall process of management information systems. With the expansion of countries into the global market, multinational marketing research has taken flight. Multinational marketing research is the systematic and objective acquisition of data pertaining to the market in which the company wishes to penetrate. It is a support tool for the decision makers in order to reach a sound decision that involves the proper identification and implementation of their multinational marketing strategies and programs targeting the identified market. Marketing research as part of the multinational marketing information system should be able to be utilized Continue reading