Organizational Structure and the Global Marketing

Organizational structures for international operation

An organization requires a suitable organizational structure for its effective functional operation. A well-designed organizational structure includes a series of central functional departments such as finance, marketing, R&D, production, etc. The system of an organization is determined by the size of the domestic market and the area of the international market in which the firm operates. International division, product division, Global area, and Matrix are the main basic organizational structures.

1. International division: It is the basic organizational structure, including the CEO and other functional departments of an organization. Under this structure, all the powers related to the product and areas of operations are concentrated in the hands of the CEO.
2. Global product division: The entire organization is divided into different departments in this structure. There exists a lack of coordination between various departments of the company. So it is a difficult task to provide information among its departments.
3. This structure breaks the firm into different divisions. As a result, it isn’t easy to transfer knowledge between departments because there is little coordination between the same company’s products.
4. Global area structure: It is challenging to send knowledge and best practices from one department to another under this structure.
5. Matrix structure: In this organizational structure, the CEO has to take responsibility for both products and areas of an international operation. (6 organizational structure of an MNC, n.d.).

Global Market Entry Strategies

Exporting is used as an initial step for international entry. A company has two basic options for carrying out its export operations. They are:

Indirect Exporting

It means trading through export companies of foreign agents, merchants, or distributors. Several types of intermediaries positioned in the domestic market are ready to aid a manufacturer in contacting international markets or buyers. In addition, this method provides the exporter with readily available expertise.

Direct Exporting

Here a separate department is created for selling and dealing with international customers. In this method, an exporter must deal with many foreign contacts, possibly one or more for every country the company plans to penetrate. This method provides the company with greater control over its distribution channels. The exporter might select from chief intermediaries like agents and merchants.

Licensing

Here the foreign licensee needs provisions for manufacturing homemade products for which the licensor gets a fixed amount of money. In addition, licensing may present the foreign organization’s right to brands, trademarks, trade secrets, or patents connected with the final product. Here the company gets a certain amount of money by entrusting the right to trademark or patent to another company.

Franchising

Franchising is a method of licensing which enables the franchiser to create an entire marketing program for a product.

References

Akkaya, F M. (n.d.). Global marketing strategies. Web.

6 organizational structure of a MNC. (n.d.). Endurance Trading. Web.