Internationalization of Org
Internationalization of Indian Organizations – Organizational culture challenges
Global Arena : Motivation for expansion
The chief reasons why companies set foot on foreign soil are:- * Economies of scale * Economies of scope * Availability of production factors at a lower cost : cheap labor, cheap raw materials
Economies of scale imply, through expansion of operations the company can derive economies of scale, by getting access to a larger resource base like increased capacity of raw materials, labor force, etc. more number of suppliers, facilitating higher supply chain efficiency. Economies of scope means that using the variety in the goods and services being offered, the companies are able to use their facilities more efficiently with marketing and certain operations facilitated by its other international facilities.
Stages of International development: | Domestic | International | Multinational | Global | Strategic Orientation | Domestic orientation | Export=oriented, multi domestic | multinational | global | Stage of development | Initial foreign investment | Competitive positioning | explosion | global | Structure | Domestic structure with export department | Domestic structure with international division | Worldwide geographic and product structure | Matrix and transnational structure | Market potential | Domestic and moderate | Large and multi domestic | Very large and multinational | Whole world |
Source : Understanding the Theory & Design of Organizations by Richard L. Daft
In the international stage, the organization has independent operations in different countries, and a multi domestic strategy is used, meaning that the competition in each country is handled independently of competition in other countries. The product design, assembling and marketing is customized and tailor made for the specific needs of the customers of different countries.
High
High
Low
Low
High
High
Low
Low
Forces for
Global Arena : Motivation for expansion
The chief reasons why companies set foot on foreign soil are:- * Economies of scale * Economies of scope * Availability of production factors at a lower cost : cheap labor, cheap raw materials
Economies of scale imply, through expansion of operations the company can derive economies of scale, by getting access to a larger resource base like increased capacity of raw materials, labor force, etc. more number of suppliers, facilitating higher supply chain efficiency. Economies of scope means that using the variety in the goods and services being offered, the companies are able to use their facilities more efficiently with marketing and certain operations facilitated by its other international facilities.
Stages of International development: | Domestic | International | Multinational | Global | Strategic Orientation | Domestic orientation | Export=oriented, multi domestic | multinational | global | Stage of development | Initial foreign investment | Competitive positioning | explosion | global | Structure | Domestic structure with export department | Domestic structure with international division | Worldwide geographic and product structure | Matrix and transnational structure | Market potential | Domestic and moderate | Large and multi domestic | Very large and multinational | Whole world |
Source : Understanding the Theory & Design of Organizations by Richard L. Daft
In the international stage, the organization has independent operations in different countries, and a multi domestic strategy is used, meaning that the competition in each country is handled independently of competition in other countries. The product design, assembling and marketing is customized and tailor made for the specific needs of the customers of different countries.
High
High
Low
Low
High
High
Low
Low
Forces for