Types of International Types of International OrganizationOrganization

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The company’s approach to global The company’s approach to global expansion needs to fit in to its expansion needs to fit in to its

corporate agenda, and be in tune with corporate agenda, and be in tune with the industry and time. Cross national the industry and time. Cross national business have been labeled into tour business have been labeled into tour

types in terms of organizational types in terms of organizational structure buy researchers.structure buy researchers.

Multi-domestic Organization:Multi-domestic Organization:

It is one that exports to/imports It is one that exports to/imports from organizations in other from organizations in other countries with primarily domestic countries with primarily domestic production. The subsidiaries production. The subsidiaries develop into decentralized decision-develop into decentralized decision-making units, make use of local making units, make use of local resources to create a self-sufficient resources to create a self-sufficient entity. entity.

Ex: GM, is a firm with Ex: GM, is a firm with subsidiaries extending subsidiaries extending over Europe that stand over Europe that stand along as self-contained along as self-contained units.units.

International Organization:International Organization:

It has its assets centralized at its It has its assets centralized at its headquarters. The knowledge base is headquarters. The knowledge base is developed at the center, and from developed at the center, and from there it is dispersed to overseas there it is dispersed to overseas locations. Subsidiary units are locations. Subsidiary units are expected to leverage their local expected to leverage their local capabilities. Here core competencies capabilities. Here core competencies are central, parent company are central, parent company capabilities are used, and knowledge capabilities are used, and knowledge disseminates from center outwards.disseminates from center outwards.

Ex: Microsoft, Core product is Ex: Microsoft, Core product is developed at center, and the developed at center, and the subsidiaries take care of subsidiaries take care of localizing the product to fit localizing the product to fit the customer requirements the customer requirements that are regional or local.that are regional or local.

Global Organization:Global Organization: It is one that is centralized but scaled It is one that is centralized but scaled

globally, with knowledge retained at globally, with knowledge retained at the center. Control is retained at the the center. Control is retained at the center. The subsidiary units have to center. The subsidiary units have to furnish information to the center and furnish information to the center and comply with the headquarters comply with the headquarters control. Subsidiary units must draw control. Subsidiary units must draw from the best practices and from the best practices and experiences of all the subsidiary units experiences of all the subsidiary units and adopt the most efficient and adopt the most efficient strategies from the entire company.strategies from the entire company.

Ex: Intel, keeping performance up to global standards and taking advantage of the learning, drawn from experience to show in terms of low costs and location advantages.

Transnational:Transnational: Refers to an enterprise where national Refers to an enterprise where national

boundaries get blurred. Both boundaries get blurred. Both centralized and decentralized methods centralized and decentralized methods are adopted in this model. While units are adopted in this model. While units are specialized, interdependence of are specialized, interdependence of units is also a characteristic feature. units is also a characteristic feature. The subsidiary units abroad play an The subsidiary units abroad play an active role in the development of the active role in the development of the firm’s capabilities and share knowledge firm’s capabilities and share knowledge with worldwide locations. This model with worldwide locations. This model enables a firm to “think globally and Act enables a firm to “think globally and Act locally”.locally”.

Ex: Caterpillar Inc., has set up Ex: Caterpillar Inc., has set up manufacturing units in certain manufacturing units in certain locations for many identical locations for many identical components. It however has components. It however has assembly units in each of its assembly units in each of its major markets, so that the major markets, so that the product can be made to suit product can be made to suit local needs.local needs.