Perhaps the simplest start for many organizations is to adopt what is known as an international division. With the addition of an international division, the domestic organization may remain relatively unchanged while an additional side structure is added. This additional structure (in collaboration with the domestic structure) takes on the responsibility for virtually all international business. This structure assumes that there are skills associated with doing business overseas that will transcend the typical business lines. Market assessments, compliance with export/import regulations, arranging shipping, identification of local representatives, establishment of dedicated sales offices, production facilities, etc. are all examples of tasks often assigned to the international division.
Advantages: The international division is effective in consolidating international activity under one area of responsibility. Such a division develops international expertise that can serve all areas of the organization. This eliminates the need for every part of the organization to master the ins and outs of doing business overseas (this can sometimes be quite complex).
Disadvantages: On the other hand, the existence of an international division encourages the organization to approach their business in an artificially dichotomous manner. Part of the business organization focuses primarily on the home country market, while the international division serves “the rest of the world”. In most organizations such a structure lends itself to a continuing preoccupation with the home country market.
As a company becomes more serious about overseas business, it often finds it useful to adopt a more sophisticated global structure. Four examples of such organizations are included below.
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