Chapter 5 - Implementing the internationalization of the company Flashcards
Organizational structure (pt. 1)
refers to the relationship inside the firm:
set of links between workers, functions & processes that allows the firm to implement its vision & strategies & carry out its operations
Organizational structure (pt. 2)
determines the degree of centralization/decentralization in the decision making and the value chain activities in the firm
A centralized approach gives
HQ authority & control over activities worldwide
a decentralized approach gives
subsidiaries autonomy & decision making power
HQ should promote collaborative, open minded and positive relationships with country managers
- encouraging country managers to identify with corporative objectives
- nurturing a sense of belonging across the organization
- visiting subsidiaries periodically
- encouraging country managers to share knowledge and experience with each other
EXPORT DEPARTMENT
unit within the firm in charge of the exporting operations
INTERNATIONAL DIVISION STRUCTURE
all international activities are centralized within one division in the firm different from domestic units
GEOGRAPHIC AREA STRUCTURE
management & control are decentralized to individual geographic regions, whose managers are responsible for operations within the region
PRODUCT STRUCTURE
managing of international operations is organized by major product line
characteristics product structure
- each international product division operates as a profit center with autonomy
- coordination facilitates economies of scale and sharing of technology
- highly centralized and associated with global strategy
FUNCTIONAL STRUCTURE
the management of the firm’s international operations is managed by functional activities such as production, marketing…
GLOBAL MATRIX STRUCTURE
combination of the geographic area, product & functional structures seeking to leverage the benefits of global strategy & responsiveness to local needs
Differences between domestic & international HRM (IHRM)
- new responsibilities: managing expatriates
- need for an international perspective in compensation policy
- greater involvement in employees’ personal lives
- greater risk exposure for the firm (political risk, terrorism, pollution, etc.)
key tasks of IHRM
- international staffing policy: recruiting, selection and placement
- preparation and training
- international performance appraisal
- compensation
INTERNATIONAL STAFFING POLICY
- one critical step is choosing the right mix of employees in the firm’s foreign units
- firms usually choose parent country nationals abroad to maintain strong control over subsidiary operations
- firms choose host country nationals when due to complexity, their specialized knowledge or connections are required
expatriate assignment failure is the unintended premature return of an employee from an international assignment. around
1/3 of assignments abroad end up in failure
causes: employee does not perform well, family’s adaptation issues or culture shock that results in inability to cope with differences in a foreign environment
TRAINING METHODS
role playing and simulations critical incident analysis long term immersion in the country case studies web based instructions
INTERNATIONAL PERFORMANCE APPRAISAL challenges
- DIFFICULTY TO COMPARE some outcomes due to differences in economic, political, legal or cultural issues
- INCOMPLETE INFORMATION due to cultural, geographic or time distances
- PERFORMANCE OUTCOMES MAY BE AFFECTED by the quality of foreign operations
On compensation
- packages vary across nations
- expatriates expect to be compensated at a level that allows them to maintain the living standard they enjoy at home
On diversity in the international workforce
- including people from diverse backgrounds, nationalities and gender to bring experience, knowledge and diverse points of view
- FEMALE EXPATRIATES are still uncommon but the number will continue growing in the future
INTERNATIONAL MARKETING
is concerned with identifying, measuring and pursuing customer needs and market opportunities abroad
THE GLOBAL MARKETING STRATEGY
is a plan of action developed for foreign markets that guides the firm decision making on:
- how to position itself and its offerings
- which customer segments to target
- to what degree it should standardize or adapt its marketing program elements
with ADAPTATION the firm
modifies one or more elements of its international marketing program to accomodate specific customer requirements in a particular market
STANDARDIZATION (pt.1)
makes the marketing program elements uniform, with the goal of the targeting entire regions, or even the global marketplace, with the same product
