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Chapter 4
Designing Organizations for the International Environment

This chapter talks about the organization for international environment; the chapter examines global strategic approaches and the application of various structural designs for global advantage. Today the world is becoming a unified global field, extraordinary advancements in communications, technology, and transportation have created a new, highly competitive landscape. Products can be made and sold anywhere in the world, communications are instant, and product-development and life cycles are growing shorter. No company is isolated from global influence.
MOTIVATIONS FOR GLOBAL EXPANSION Today being successful means succeeding on a global scale, the importance of the global environment is reflected in the shifting global economy.
There are three primary motivations for global expansions: * Economies of scales: being able to achieve the lowest possible cost per unit of production, and to obtain volume discounts from suppliers. * Economies of scope: by increasing a company’s market power as compared to competitors, because the company develops broad knowledge of the cultural, social, economic, and other factors that affect its customers in varied locations and can provide specialized products and services to meet those needs. * Low-cost factors of production such as labor, raw materials, or land: many companies look for centers in other countries to take advantage of tax breaks, find skilled workers, and be closer to major customers and suppliers.

STAGES OF INTERNATIONAL DEVELOPMENT Each managers should consciously adopt a strategy for global development in order to become a global giant overnight, So the shift from domestic to global occurs through stages of development.
There are four stages 1. Domestic Stage: the company is domestically oriented; market potential is limited and is primarily in the home