How Organizations Go Global

Chapter 2
Business Management
Ms. Stewart
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Different Types of International
Organizations
Multinational Corporation
A firm that operates in multiple
countries but manages from the
home country
Multidomestic Corporation
A firm that operates in several
countries but decentralizes
management to the local country
Global Company
An international company that
centralizes management in the home
country

Chapter 2, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 2-3
Copyright 2011 Pearson Canada Inc.
Different Types of International
Organizations (contd)
Transnational or Borderless Organization
An international company that eliminates
artificial geographical barriers
Born Global
A company that chooses to go global
from inception

Chapter 2, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 2-4
Copyright 2011 Pearson Canada Inc.
Chapter 2, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 2-5
Copyright 2011 Pearson Canada Inc.
How Organizations Go Global (contd)
Global Sourcing
Purchasing materials or labour from
around the world, wherever it is cheapest
Exporting
Making products at home and selling
them abroad
Importing
Selling products at home that are made
abroad


Chapter 2, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 2-6
Copyright 2011 Pearson Canada Inc.
How Organizations Go Global (contd)
Licensing and Franchising
Giving another organization the right
to use its name, technology, or
product specifications
Licensing is used by manufacturing
organizations that make or sell
another companys products
Franchising is used by service
organizations to use another firms
name and operating methods
Chapter 2, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 2-7
Copyright 2011 Pearson Canada Inc.
How Organizations Go Global (contd)
Strategic Alliance
Partnership between a domestic and
foreign company to share resources in
developing new products or building
production facilities
Joint Venture is a type of strategic
alliance in which partners form an
independent organization for a
business purpose
Is a faster and less expensive way to
compete globally
Chapter 2, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 2-8
Copyright 2011 Pearson Canada Inc.
How Organizations Go Global
(contd)
Foreign Subsidiary
A direct investment by an
organization in a foreign country
by creating a separate and
independent production facility or
office
This involves the greatest amount
of resources and highest risk