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International Business Management > Chapter 5 - Implementing the internationalization of the company > Flashcards

Chapter 5 - Implementing the internationalization of the company Flashcards

1
Q

Organizational structure (pt. 1)

A

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

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2
Q

Organizational structure (pt. 2)

A

determines the degree of centralization/decentralization in the decision making and the value chain activities in the firm

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3
Q

A centralized approach gives

A

HQ authority & control over activities worldwide

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4
Q

a decentralized approach gives

A

subsidiaries autonomy & decision making power

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5
Q

HQ should promote collaborative, open minded and positive relationships with country managers

A
  • 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
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6
Q

EXPORT DEPARTMENT

A

unit within the firm in charge of the exporting operations

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7
Q

INTERNATIONAL DIVISION STRUCTURE

A

all international activities are centralized within one division in the firm different from domestic units

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8
Q

GEOGRAPHIC AREA STRUCTURE

A

management & control are decentralized to individual geographic regions, whose managers are responsible for operations within the region

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9
Q

PRODUCT STRUCTURE

A

managing of international operations is organized by major product line

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10
Q

characteristics product structure

A
  • 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
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11
Q

FUNCTIONAL STRUCTURE

A

the management of the firm’s international operations is managed by functional activities such as production, marketing…

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12
Q

GLOBAL MATRIX STRUCTURE

A

combination of the geographic area, product & functional structures seeking to leverage the benefits of global strategy & responsiveness to local needs

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13
Q

Differences between domestic & international HRM (IHRM)

A
  • 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.)
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14
Q

key tasks of IHRM

A
  • international staffing policy: recruiting, selection and placement
  • preparation and training
  • international performance appraisal
  • compensation
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15
Q

INTERNATIONAL STAFFING POLICY

A
  • 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
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16
Q

expatriate assignment failure is the unintended premature return of an employee from an international assignment. around

A

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

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17
Q

TRAINING METHODS

A 
role playing and simulations
critical incident analysis
long term immersion in the country 
case studies
web based instructions
18
Q

INTERNATIONAL PERFORMANCE APPRAISAL challenges

A
  • 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
19
Q

On compensation

A
  • packages vary across nations

- expatriates expect to be compensated at a level that allows them to maintain the living standard they enjoy at home

20
Q

On diversity in the international workforce

A
  • 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
21
Q

INTERNATIONAL MARKETING

A

is concerned with identifying, measuring and pursuing customer needs and market opportunities abroad

22
Q

THE GLOBAL MARKETING STRATEGY

A

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
23
Q

with ADAPTATION the firm

A

modifies one or more elements of its international marketing program to accomodate specific customer requirements in a particular market

24
Q

STANDARDIZATION (pt.1)

A

makes the marketing program elements uniform, with the goal of the targeting entire regions, or even the global marketplace, with the same product

25
Q

STANDARDIZATION (pt.2)

A

a tendency toward global integration,

more common in global industries such as aircraft manufacturing

26
Q

favorable outcomes of standardization

A
  1. COST REDUCTION: reduced cost through economies of scale
  2. IMPROVED PLANNING AND CONTROL: improved planning and control of value-adding activities
  3. ABILITY TO PORTRAY A CONSISTENT IMAGE AND BUILD GLOBAL BRANDS: a brand is a name, sign, symbol or design intended to identify the firm’s product
27
Q

Managers consider several (4) different rationales when adapting marketing program elements:

A
  1. Differences in preferences
  2. Differences in living standards and economic conditions
  3. Differences in laws and regulations
  4. Differences in infrastructure
28
Q

International marketing program poses unique issues for managers in the following areas:

A
  1. Global branding and product development
  2. International pricing
  3. International marketing and communication
  4. International distribution
29
Q

on global product development

A
  • a basic product will incorporate only core features into which the firm can inexpensively implement variations for individual markets
30
Q

factors that influence international pricing:

A
  1. Economic conditions: in emerging or developing economies prices must be set lower
  2. Type of product: high added value products give companies price flexibility
  3. Type of distribution system: exporting firms rely on distributors based abroad
  4. Location of the production facility: facilities located in low cost labor countries contribute to cut costs
31
Q

On Transfer pricing/Intracorporate pricing

A
  • it is the practice of pricing intermediate or finished products exchange inside the company among its units located in different countries
  • managing transfer prices is relevant because it contributes to optimize earnings
32
Q

on gray market activity/parallel importation

A

Consider a manufacturer that produces in country A & exports in country B. If the going price in country B is lower, gray market brokers can exploit that & buy the product for a lower price in country B, then sell it at a higher price in country A

33
Q

Managers worry about gray market activity because it can lead to

A
  • a tarnished brand image
  • strained producer-distributor relations
  • disruptions in company planning
34
Q

Managers can pursue at least 4 actions to cope with gray market imports:

A
  1. Aggressively cut prices
  2. Hinder the flow of products into markets with grey brokers
  3. Design products with exclusive features strongly appealing to customers
  4. Communicate the limitations of grey markets
35
Q

INTERNATIONAL DISTRIBUTION: it is differently performed depending on the mode of entry in foreign countries

A
  • exporting firms: ship goods to intermediaries which move product through customs & foreign distribution channels
  • companies with marketing & subsidiaries do it directly. firms will lease, acquire or set a sales office
36
Q

GAM (global account management)

A

refers to serving a key global customer in a consistent and standardised manner, regardless of where in the world it operates

37
Q

International logistics

A

the process of planning & managing the flow of goods & products in the company’s supply chain from acquisition to customer purchase

38
Q

Sourcing

A

involves a coordinated approach to the selection of suppliers located across the world and the procurement of goods and services to be filled in the global value chain

39
Q

Electronic sourcing

A
  • development of IT has enhanced the ability of companies to source globally
  • EDI is a software linking corporations to suppliers, making it possible to exchange information & automatic tracking/ordering of orders
40
Q

E procurement

A

makes it easier for global companies to widen their reach to a larger number and type of suppliers

41
Q

INCOTERMS (pt.1)

A

a set of rules which define the responsibilities of sellers and buyers for the delivery of goods under sales contracts

42
Q

INCOTERMS (pt.2)

A

should be analyzed from the point of view of the exporter/seller

International Business Management (6 decks)

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