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

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Presentation on theme: "How Organizations Go Global Chapter 2 Business Management Ms. Stewart."— Presentation transcript:

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

3 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 (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

4 Chapter 2, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 2-4 Copyright © 2011 Pearson Canada Inc.

5 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 (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

6 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 (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

7 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 (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

8 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 (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


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