Class 8 - BU398

Vocabulary flashcards summarizing the main concepts, structures, strategies, and models related to global expansion and organization design from Chapter 7.

Economies of Scale

Cost advantages gained by increasing production volume, allowing the average unit cost to fall.

Economies of Scope

Cost advantages achieved by expanding the variety of products, services, markets, or countries served.

Factors of Production (International Context)

Lower-cost resources and fewer governmental restrictions that motivate firms to operate globally.

Domestic Stage

Early phase of international evolution in which a firm is primarily focused on its domestic market with a domestic structure + export department and initial foreign investment

International Stage

Phase where a firm makes its initial foreign involvement, usually through domestic structure with a international division and competitive positioning

Multinational Stage

Stage in which a company has significant assets and operations in multiple countries, often using a multidomestic approach.

Global Stage

Mature phase where the entire world is viewed as a single market and operations are fully worldwide with a matrix structure and transnational approach

Export Department

Organizational unit added to a domestic structure to handle growing export activities.

International Division

Separate division responsible for all international operations, common in firms pursuing an export strategy.

Worldwide Geographic Structure

Organization grouped by regions or countries to support high national responsiveness.

Worldwide Product Structure

Global structure grouped by product lines, emphasizing global integration and standardization.

Global Matrix Structure

Dual-authority design combining product and geographic dimensions to balance global integration and local responsiveness.

Transnational (Matrix) Structure

Highly complex, interdependent worldwide network that seeks simultaneous efficiency, responsiveness, and learning.

Strategic Alliance

Cooperative arrangement between independent firms to pursue mutual international objectives.

Joint Venture

A separate legal entity created and owned by two or more parent companies to share risk and resources globally.

Consortia

Groups of independent companies that pool skills and resources to enter new international markets together.

Export Strategy

Approach focused on selling domestic products abroad with minimal adaptation or overseas investment.

Globalization Strategy

Standardized worldwide offering aimed at achieving maximum efficiency through global integration.

Multidomestic Strategy

Approach that customizes products and practices to each national market to maximize local responsiveness.

Forces for Global Integration

Pressures that push firms toward worldwide standardization, such as demand for uniform products or global competitors.

Forces for National Responsiveness

Pressures that require adaptation to local needs, regulations, and cultural differences.

Transnational Model (MNC)

Organization characterized by dispersed specialized resources, flexible structure, subsidiary-initiated strategy, and culture-based coordination.

Efficiency (Transnational Goal)

Achieving cost advantages and resource optimization across global operations.

Responsiveness (Transnational Goal)

Ability to adapt quickly to local markets and changing environmental demands.

Learning (Transnational Goal)

Continuous transfer and creation of knowledge across worldwide units to sustain competitive advantage.