2. Routes of Globalization
• Export Import
• Tourism
• Transportation
• Services
• Investment
• Use of Assets
3. Modes of International Business
1. Exporting
Indirect Exporting
Direct Exports
Intra Corporate Transfers
2. Licensing
3. Franchising
4. Difference between Licensing and Franchising
• is an arrangement in which
a company (licensor) sells
the right to use intellectual
property or produce a
company's product to the
licensee, for royalty.
• The licensor has control on
the use of intellectual
property by the licensee,
but has no control on the
licensee's business.
• Franchising is an
arrangement in which the
franchisor permits
franchisee to use business
model or brand name for a
fee, to conduct business,
as an independent branch
of the parent company
(franchisor).
• Franchisor exerts
considerable control over
franchisee's business and
process.
5. Modes of International Business
(Special Modes)
1. Contract Manufacturing
2. Management Contracts
3. Turnkey Projects
4. FDI
6. Organizing International Business
Types of Organizational Structure
• International Divisions Structure
• Functional Divisions Structure
• Product Division Structure
• Geographic Area Division Structure
• Matrix Division Structure
• Mixed Structure
7. Factors Influencing Choice of a Design
1.Internal Factors
Management Orientation ( Ethnocentric,
Polycentric, Geocentric)
Organization Size ( more departments, more staff
positions, more rules and regulations, more
decentralization)
Employee Strength
2. External Factors
Environmental Uncertainty
Differentiation and Integration
Technology
8. Issues in Organization Design
• Centralization vs Decentralization
• Using Subsidiary Board of Directors
• Non Traditional Organizational Arrangements
• Role of Information Technology
• Integrating Mechanisms
• Control System ( distance, diversity, Degree of
Uncertainty, Differences in approach)
• Culture in International Business
• Managing Change in International Business
9. Conflict Management
Sources of Conflict in International Business
1. Host Country Factors
(Size, Sovereignty, Information Disclosure,
Visibility, Regulation, Competition, Employment,
Technology, Taxation )
2. Home Country Factors ( Dumping, Export &
Import Control, Local Jobs, Local Industry)
3.Combined Factors ( Nationality, Business
Practices, Laws, Taxation)
10. Types of Conflict
1. Individual Level Conflict
a) Intra Individual Conflict
Conflict due to frustration
Goal Conflicts
Avoidance-Avoidance Conflict
Role Conflict
b) Inter Personal Conflict
Personal Differences
Information Deficiency
Environment Stress
11. Types of Conflict
2. Group Level Conflict
a) Intra Group - Within the group
b) Inter Group - Between group
1. Competition for resources
2. Status Struggle
12. Types of Conflict
3. Organizational Level Conflict
Intra Organizational
a) Horizontal Conflict
b) Vertical Conflict
Inadequate
communication between
levels
Differences of interest
Lack of shared
perceptions and attitude
Inter Organizational
1. Conflict between
organizations pursuing
similar objectives
2. Conflict between govt.
agency and
organization
3. Conflict between head
office and
manufacturing unit
13. Conflict Management Styles
• Avoidance (withdrawal)
• Accommodating: low in assertiveness, high in
cooperativeness
• Competing: High in assertiveness and low in
cooperativeness
• Compromise
• Collaboration : combination of both
assertiveness and cooperativeness
14. Conflict Resolution/Reconciliation
1. Adjudication
• Legal process by which judge or an arbiter
reviews evidence and argumentation,
• This includes legal reasoning set forth by
opposing parties
• To take decisions which determines rights and
obligations between the parties involved
• Act of pronouncing Judgement
15. Conflict Resolution/Reconciliation
2. Arbitration
• Alternative Dispute Resolution (ADR)
• It is a technique for the resolution of disputes
outside the courts.
• Parties agree to the arbitration decision (the
"award").
• Speedier process, less expensive
• Less formal, less rigid
16. Conflict Resolution/Reconciliation
3. Mediation
• Parties use a third party known as a mediator
to settle disputes
• It is a flexible process which is used to settle
disputes.
• Mediator tries to moderate and balance the
issue so that the parties reach a common
ground
• Non confrontational approach
17. Conflict Resolution/Reconciliation
4. Litigation
• Is a term used to describe proceedings initiated
between two opposing parties to enforce or
defend a legal right.
• It is typically settled by agreement between the
parties,
• May also be heard and decided by a jury or judge
in court.
• Parties go to host country courts, home country
courts or third country for resolution
18. Conflict Resolution/Reconciliation
5. Negotiation
• Discussion aimed at reaching an agreement
• It is aimed to resolve points of difference,
• To gain advantage for an individual
or collective,
• It is often conducted by putting forward a
position and making small concessions to
achieve an agreement.
19. United Nations
• Is an intergovernmental organization to promote international
co-operation.
• To ensure international peace and security
• Established 24 October 1945
• General Assembly (the main deliberative assembly)
• Security Council (for deciding certain resolutions for peace and
security)
• Economic and Social Council (ECOSOC) (for promoting
international economic and social co-operation and
development)
• Secretariat (for providing studies, information, and facilities
needed by the UN)
• International Court of Justice (the primary judicial organ
• United Nations Trusteeship Council
20. Organization of Security and Cooperation
in Europe (OSCE)
• Estb. 1995
• Early Warnings
• Conflict Prevention
• Crisis management
• Post Conflict Rehabilitation
1. Arms control
2. Promotion of human rights
3. Freedom of the press and
4. Fair elections
21. European Union (EU)
• Estb. 1993
• Is a politico-economic union of 28 member
states that are located primarily in Europe
• Support for Governance
• Rule of Law
• Economic Development
• Policies and Peace Building
