1. Making It Work: Effective International Operations
Chapter 10
Making It Work: Effective International Operations

2. Overview Managing strategic alliances Factors affecting entry choice
Structuring operations
Approaches to coordination
Managing technology
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3. Key Issues in Managing Strategic Alliances

4. Getting Out if Necessary
Alliance Agreements Should Include:
Conditions to dissolve alliance
How assets will be liquidated
Handling of liabilities after termination
Mechanism for resolution of disputes
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5. Factors Affecting Entry Choice
Degree of control
Amount of “say”
Resource commitment
Capital and human assets required
Dissemination risk
Risk of proprietary knowledge getting out
Systemic risk
Economic and political risk
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6. Factors Affecting Choice of International Entry Mode
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7. Culture & Entry Choice Culture and national origin
Perception of cultural distance
Double-layered acculturation
Success less likely when dealing with different national and corporate cultures
Can interact with other variables to affect choice
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8. Establishing an International Structure
No one best way
Changes with expansion or entry method
Should match competitive environment
Matching structure & process can be challenging
Combination structures are sometimes necessary
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9. International Structures
Export
International Division
By area or product
Global
Product
Area
Matrix
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10. Export Structure
Often first step toward accommodating international business in the structure
Export Department
Narrow vs. broad product line
Can be more complex than it appears
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11. Typical Structures for Firms With a Primary Focus on International Exports
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12. International Division Structure
Splitting domestic and international operations
Concentrates managerial expertise and know-how
Umbrella for all international activities
By product or region
Challenge of coordinating both domestic and international
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13. Examples of an International Division Structure
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14. Global Structures
International operations critical part of overall operation
Area structure-Few products, high degree of local responsiveness, functional autonomy within each area
Product structure-Diversified products, separate divisions for each line, minimal local responsiveness, some duplication
Matrix structure-Global integration and local responsiveness needed, overlapping geographic and product divisions, confusion and ambiguity
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15. The Global Area Structure

16. The Global Product Structure
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17. The Global Matrix Structure
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18. Structure and Strategy
Locus of decision making
Centralized, decentralized
Structure matches desired control over decisions
Culture and perception of control often linked to structure
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19. The Relationship between Structural Components & Strategy

20. Formal vs. Informal Coordination
mechanisms
Lateral communication network
Formal coordination
mechanisms
Established team
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21. Lateral Communication Networks
Facilitate information flow needed to spread expertise throughout organization
Large global structure can impede information flow
Difficult to organize
Patchwork of relationships doesn’t always cover each area
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22. Managing Technology Facilitate coordination, both formal and informal
Better decision making
Keeping up essential to maintain firm’s competitive advantage
Integrate into strategic initiatives
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23. Getting and Keeping a Technological Edge
Develop In-house
Depends on technology intensity of industry
Expensive
Ability to guard within
Shared development
Cost savings
Through acquisition
Rapid
Expensive but cheaper than in-house development
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24. Transferring Technology
Intercompany transfer
Sales
Source of revenue
Risk of competition
Methods
Franchising
Licensing
Joint ventures
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25. Maintaining Technological Edge
Intellectual Property Protection--Reward for investment in R & D
Patents—monopoly rights for a period of time
Trademark—protection from use of distinctive designs, features, or logos
Variations across countries
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