FINALEXAMINATIONREVIEWOFCHAPTER14STRATEGYANDORGANIZATIONINTHEINTERNATIONALFIRMFROMCHAPTER11 OFPROFESSORSCAVANAUGH, KNIGHTANDRIESENBERGERINTERNATIONALBUSINESS: THENEWREALITIES, 4THED(2018)PREPAREDFORSTUDENTSOFIBUS 330 -- FALLSEMESTER2019LEARNING OBJECTIVES 11.1 Describe strategy in international business.11.2 Understand building the global firm.11.3 Describe the integration-responsiveness framework.11.4 Learn to identify strategies based on the integration-responsiveness framework.11.5 Understand organizational structure in international business.11.6 Understand foreign market entry strategies. I again recommend reviewing the interactive lectures in Mylab since they are based on thelearning objectives above. To undertake an international venture, managers have to think,analyze and plan. This involves considering what industry the firm is in and what resources thefirm has – both of which are huge determinants of how the firm will operate and compete in aninternational venture. Strategy in international business.The firm that aspires to become globally competitive mustsimultaneously seek three key strategic objectives—efficiency, flexibility, and learning.Building the global firm: Managers who exhibit visionary leadershippossess an internationalmind-set, cosmopolitan values, and a globally strategic vision.The integration-responsiveness framework: The integration-responsiveness (IR) frameworkdescribes how internationalizing firms simultaneously seek global integration and localresponsiveness.The IR framework presents four alternative strategies: home replicationstrategy, multidomesticstrategy, global strategyand transnational strategy.Organizational structure in international business: Organizational structuredetermineswhere key decisions are made, the relationship between headquarters and subsidiaries, and thenature of international staffing. Six organizational structures are discussed: the exportdepartment,the international division structure, the geographic area structure, the productstructure, the functional structureand the global matrix structure.Foreign market entry strategies: Market entry strategies consist of exporting, sourcing, andforeign direct investmentas well as licensing, franchising, and nonequity alliances. Eachstrategy has advantages and disadvantages. To select a strategy, managers must consider thefirm’s resources and capabilities, conditions in the target country, risks inherent in each venture,competition from existing and potential rivals, and the characteristics of the product or service tobe offered in the market. Global sourcing (importing)is the procurement of products and services from worldwidesources for use at home.
The Opening Vignette: IKEA’s STRATEGIES FOR GLOBAL SUCCESS Key message: This vignette reveals that IKEA successfully combines global operationalefficiencies in production and training with local responsiveness by delegating autonomy anddecision-making regarding product markets to local managers.