1. How Organizations Go Global
Chapter 2
Business Management
Ms. Stewart

2. 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 2

3. Different Types of International Organizations (cont’d)
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
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4. Chapter 2, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition
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5. How Organizations Go Global (cont’d)
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
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6. How Organizations Go Global (cont’d)
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 company’s products
Franchising is used by service organizations to use another firm’s name and operating methods
Chapter 2, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition
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7. How Organizations Go Global (cont’d)
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
Copyright © 2011 Pearson Canada Inc. 7

8. How Organizations Go Global (cont’d)
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
Chapter 2, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition
Copyright © 2011 Pearson Canada Inc. 8