The Organization of International Business

A set of flashcards covering key concepts related to the organization of international business.

Organizational Architecture

The totality of a firm’s organization, including its structure, control systems, incentives, culture, processes, and people.

Vertical Differentiation

The centralization and decentralization of decision-making responsibilities within an organization.

Horizontal Differentiation

The division of the firm into subunits to facilitate specialization and coordination.

Integrating Mechanisms

Tools used to achieve coordination between subunits in an organization.

Localization Strategy

A business strategy that focuses on local responsiveness and decentralizes decision-making to country subsidiaries.

Global Standardization Strategy

A strategy emphasizing the realization of location and experience curve economies with centralized control over most operational decisions.

Transnational Strategy

A strategy that seeks simultaneous attainment of location and experience curve economies, local responsiveness, and global learning.

Cultural Controls

Control that relies on employees adopting the firm's norms and values, thus regulating their own behavior.

Control Systems

Mechanisms used to monitor and evaluate the performance of organizational units.

Performance Ambiguity

A situation where the causes of good or bad performance are not clearly identifiable, impacting management decisions and control.