Note of International Marketing

Organizational Structure

1. The basic functions of an organization are to provide:

i. A route and locus of decision making and coordination

ii. A system for reporting and communication

2. Organizational designs

i. The types of structures that companies use to manage foreign activities are divided into three categories

ii. Little or no formal organizational recognition of international activities of the firm

iii. International division

iv. Global organizations

3. Little or no formal organization

i. Ranges from domestic operations handling an occasional international transaction on an ad hoc basis to separate export departments

ii. In the early stages of international involvement, the share of international operations in the sales and profits of the corporation is minor

1. Hence no organizational adjustment takes place

4. Transactions are conducted on a case-by-case basis either by the resident expert or with the help of facilitating agents

5. International division

i. Centralizes in one entity the total responsibility for international activity

1. With or without separate incorporation

ii. Eliminates possible bias against international operations that exist if domestic divisions are allowed to independently serve international customers

iii. Concentrates international expertise, information flows concerning foreign market opportunities, and authority over international activities

iv. Best serves firms:

1. With few products that do not vary significantly in terms of their environmental sensitivity

2. When international sales and profits are still quite insignificant compared with those of the domestic divisions

6. Global organizational structures

i. Six basic types of global structures are available:

1. Product structure

2. Area structure

3. Functional structure

4. Customer structure

5. Mixed or hybrid structure

6. Matrix structure

7. Product structure

i. Gives worldwide responsibility to business units for marketing of their product...