2. Companies Go International
for Two Basic Reasons
1. Proactive motives include the search for new customers, new
markets, increased market share, increased return on investments,
needed raw materials, and other resources.
2. Reactive motives include the desire to escape from trade barriers
and other government regulations, to better serve a customer or
group of customers, and to remain competitive.
MultiMedia by 2001 South-
3. International Management
Managing resources (people, information, funds,
Managing resources (people, information, funds,
inventories, and technologies) across national
inventories, and technologies) across national
boundaries.
boundaries.
Adapting management principles and functions to the
Adapting management principles and functions to the
demands of foreign competition and environments.
demands of foreign competition and environments.
MultiMedia by 2001 South-
4. Two Kinds of Multinational
Companies
Those that market their Those that modify their
product lines in products and services
relatively unaltered along with the marketing
states throughout the of them to appeal to
world (standardization). specific groups of
consumers in specific
geographical areas
(customization).
MultiMedia by 2001 South-
5. Three Staffing Strategies
The first is to decide to adopt a “high
skills strategy.”
The second is to “dumb down jobs” and
shift the work to cheap-labor countries.
The third is to mix the preceding two
strategies.
MultiMedia by 2001 South-
6. Five Basic Environments
2. Political 4. Legal
1. Economic
3. Sociocultural 5. Technological
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7. Laws that Have an Impact
on Commerce
Quotas limit the import of a product to a specified
amount per year.
Tariffs are taxes placed on goods in order to make
them more expensive and less competitive.
Embargoes keep a product out of a country for a time
or entirely.
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8. Sociocultural Environment for
International Managers
People’s traditions Values
Languages Religion
Customs Levels of education
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9. Planning for International
Operations Assumptions
Assessing Developing
the assumption
environment s
Forecasting
based on
those
assumptions
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10. Four Ways to Get Involved in
Overseas Trade
Export your product or service
License others to act on your behalf
Enter into joint ventures
Build or purchase facilities
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11. Assessing the External Variables
Political Instability and Risk
Currency Instability
Competition from National Governments
Pressures from National Governments
Nationalism
Patent and Trademark Protection
Intense Competition
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12. Effectiveness of the Assessment
Efforts Depends on
(1) Apportion responsibility for gathering and analyzing information between
line and staff managers and between in-house personnel and outside
consultants.
(2) Build credibility and effectiveness into the analysis so that the organization
takes it seriously.
(3) Bring an understanding of the importance of analysis into corporate
operations, particularly capital budgeting and long-term planning.
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13. International Organization and
Traditional Issues
Achieving operational efficiencies.
Creating flexibility to respond to national and global changes.
Allowing units to share information and technology quickly.
Coordinating activities from various cultures.
Responding swiftly to changes in consumer needs and
demands.
Differentiating operations by function, product, customers, or
geography.
Developing management teams with common goals and
shared visions.
MultiMedia by 2001 South-
14. Becoming Multinational
Three Phases
1. Pre-international
1. Pre-international
division phase
division phase
2. International
2. International 3. Global structure
3. Global structure
division phase
division phase phase
phase
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15. Moving Away from an
International Division Phase
The international market is as important to it as the
domestic market.
Senior officials in the company have both foreign and
domestic experience.
International sales represent 25 to 35 percent of total
sales.
The technology used in the domestic division has far
outstripped that of the international division.
MultiMedia by 2001 South-
17. Doing Versus Being
A doing orientation is an A being orientation “finds
action orientation. people, events, and ideas
Western culture fosters flowing spontaneously; the
this orientation; citizens people stress release,
like to be rewarded for indulgence of existing
individual actions and desires, and working for
behaviors. the moment . . . they will
not work strictly for future
rewards.”
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18. Repatriation Program
Its Purposes
Reverse culture shock.
Help to adjust to new assignment.
Facilitate the sharing of expatriate's knowledge.
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19. Controls Fall Into Two Groups
2. Indirect controls include the various kinds of reports
2. Indirect controls include the various kinds of reports
sent daily, weekly, monthly, and by fax and by computer
sent daily, weekly, monthly, and by fax and by computer
linkups.
linkups.
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20. International Controlling Methods
1 Regular reporting procedures and communications
between affiliates and their headquarters.
2 Progress reports toward goals established with
local input by strategic planners.
3 Regular screening of reported data by area and
functional experts.
4 Regular on-site inspections by a variety of
corporate personnel, both staff and line.
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