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Mid-term Review Chapter 6 Definitions-6-10

Mid-term Review Chapter 6 Definitions-6-10 - Chapter 6...

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Chapter 6 Definitions: Economies of Scale: Achieving lower costs through large volume production often made possible by global expansion. Economies of Scope: Achieving economies by having a presence in many product lines, technologies or geographic areas. Factors of Production: Supplies necessary for production, such as land, raw materials and labour. Domestic stage: The first stage of international development in which a company is domestically oriented while managers are aware of the global environment. International stage: The second stage of international development, in which the company takes exports seriously and begins to think multidomestically. Multidomestic: Means competitive issues in each country are independent of other countries; the company deals with each country individually. Multinational stage: The stage of international development in which a company has marketing and production facilities in many countries and more than one-third of its sales outside its home country. Global stage: The stage of international development in which the company transcends any one country. The business in not merely a collection of domestic industries, rather, subsidiaries are interlinked to the point where competitive position in one country significantly influences activities in other countries. Global companies: (AKA stateless corporations.) Companies that no longer think of themselves as having a home country. Consortia: Groups of firms that venture into new products and technologies. Standardization: A policy that ensures all branches of the company at all locations operate in the same way. Globalization strategy: The standardization of product design and advertising strategy throughout the world. Multidomestic strategy: Competition in each country is handled independently of competition in other countries. International division: A division that is equal in status to other major departments within a company and has its own hierarchy to handle business in various countries (organized according to geographical interests.) Global Product Structure: A form in which product divisions take responsibility for global operations in their specific product areas. Global geographical structure: A form in which an organization divides its operations into world regions each of which reports to the CEO.
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Global matrix structure: A form of horizontal linkage in an international organization in which both product and geographical structures are implemented simultaneously to achieve a balance between standardization and globalization. Global Teams: (AKA transnational teams) are cross border work groups made up of multiskilled, multinational members whose activities span multiple countries. Power distance:
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Mid-term Review Chapter 6 Definitions-6-10 - Chapter 6...

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