The organization structure is an approach that helps and guides in organizing the employees of the organization into a structured and organized pattern for better coordination and communication. The structure in a multinational company defines the architecture of the business competence, functional relationship and management function. It helps in reducing confusion in the business environment and also supports in carrying out the business function smoothly and efficiently. The organization structure is affected by various internal and external factors which are also known as the organizational environment since organization works around these factors and the environment. The organizational environment consists of all those factors that influences the organizational working and thus can also influence the organizational structure since in each country and geographical areas the organizational environment would change. The external organizational environment that would influence the organizational structure is the economic, political and legal, socio-economic, technological and natural factors. All Continue reading
International Business Strategies
Technology Transfer in International Business
Technology is a new variable in the equation of economic relations. Traditional theories of international business assumes that all nations have equal access to technology and, therefore, that there is no need to transfer technology from one county to another. Recent research findings have invalidated this assumption. In addition, they point to technology differences as primary cause of international inequalities in economic achievements. To reduce the inequalities, technology capabilities of the backward nations must be strengthened. The quickest way to do so is to transfer technology from the developed to the developing nations. Technology is any device or process used for productive purposes. In its broadest sense, it is the sum of the ways in which a given group provides itself with good and services, the group being a nation, an industry, or a single firm. There is a fundamental characteristic of technology that demands clear recognition. Q unites unlike Continue reading
Transnational Strategy in International Business
Over the years, several companies have decided to carry out their business activities in overseas markets and hence, have expanded as international or global businesses in efforts to be known as multinational enterprises (MNEs) and enjoy the perks of being a global business. In order to come up with strategies for entering and sustaining in international markets, companies invest a lot of time, effort, and money, and yet many do not succeed in their international business planning and/or execution. We can come across several big names that have been unable to prove themselves successful in the international market such as Walmart, Starbuck’s initial launch in Australia, and Amazon in China. These examples depict that managing international operations is a challenging task for any business and therefore, not every business has the capability or the resources for it and some just do not have enough knowledge. Companies can benefit from global Continue reading
Modes of Entry into International Business with Advantages and Disadvantages
The different types of entry modes, to penetrate a foreign market, arise due to globalization. The latter has drastically changed the way business conduct at international level. Owing to advances in transportation, technology and communications, nowadays practically every business of any size can supply or distribute goods, services, or intellectual property. However, when companies deal with international markets, it is complicated as the companies must be prepared to surmount differences in currency issues, language problems, cultural norms, and legal and regulatory regimes. Only the largest companies have the capital and knowledge to overcome these complications on their own. Many other businesses simply do not have the means to efficiently and affordably deal with all those variables in foreign jurisdictions, without a partner in the host country. Foreign market entry mode has been defined as an institutional arrangement that makes possible the entry of a company’s products, technology, human skills, management, Continue reading
Make-or-Buy Decisions in International Business
International businesses invariably face decisions about whether they make all or just some of the components used in their final product and therefore buy in from other sources (outsourcing) those components they decide not to make. This make-or-buy decision is related to the degree to which a firm is vertically integrated: that is, the extent to which a firm is its own supplier and market. At one extreme a firm can make all of its own inputs and be its own supplier; at the other extreme, it can buy all its inputs and rely on external suppliers. Partial integration implies that some components are made and others bought. A major benefit of making inputs (backward or upstream integration) is the degree of control maintained over cost, quality and timeliness of delivery. Major drawbacks are the cost of investment and expertise needed to provide these inputs. A benefit of buying is Continue reading
Ansoff Matrix Analysis of Toyota
Toyota is the most leading Japanese automobile company. By creating more innovative car design and spending billions dollars in advertisement a year, Toyota has appeared in the eyes of many auto consumers worldwide. By producing high quality vehicles at affordable prices, Toyota has built its reputation globally. Toyota has reduced their prices as compared to other automobile makers. Toyota believes that the role of purchasing should be long term at the lowest price and no compromise on the production of quality products. Normally, companies do not want to cut their targeted return and they follow the strategy which is formulated in to the cost + profit = selling price. But Toyota takes a slightly different strategy which is formulated in to the price-cost=profit. Strategic management has a direct impact on its business in all organizations. That’s why Toyota has become leading company in auto industry because of the attractive strategic Continue reading