MGMT+650+-+Final+Exam+Question+8

CH 8

__Submitted by Arshad Abbas__

Describe the use of export management as a design structure to go international. When does it become necessary to use an international division? What are some of the problem associated with international divisions?

Answer.

When a company first goes international it seldom changes its basic organization structure. Most companies act first as passive importers. They simply fill orders using the same structures, procedure, people used in domestic sales. Even with greater involvement in exporting, companies often avoid fundamental organizational changes. Instead they use other companies to provide them with international expertise and to run their export operations, or license oversees companies to sell their product or services.

When exports become a significant percentage of company sales and a company wishes greater control managers often create a separate export department.

As companies increase the size of their international sales force and setup manufacturing operation in their countries, the export department often grows into an international division.

Responsibilities of International division:

· Manage Export · Manage international sales force · Overseas foreign subsidiaries

Problems:

· For multiproduct companies operating in many companies is not considered an effective multinational structure. · Too many products often overwhelm the capacity of international division. · It is difficult to for the international division to manage as the number of location in different countries grows. · The international division makes it more difficult to implement international strategies using worldwide products or location advantages.