International Organizations

Chapter 7
International Organization

International Marketing
Chapter-7 International
Organization

Objectives
What are the common organizational
types
What is built-in export department
What is the role of separate export
department
What is export sales subsidiary
What is international division]
What are the global organizational
structures Chapter-7 International
Organization

Introduction
There are different organizational structures
for doing international business.
The structure is determined by factors such as
the extent of commitment of the organisation
to the international business and the nature of
its international orientation, the size of
international business and expansion plans,
the number and consistency of product lines,
characteristics of the foreign markets etc.
Organization

Built-In Export Department
Export organisation is built into the regular
domestic system.
The built-in export department is suitable
under certain conditions, such as when
export business is small, the company is
new to international marketing, the
management philosophy is not oriented
towards growth in overseas business, the
company resources are limited etc.
Organization

Export Department Structure
Fig.7.1

Organization

Separate Export Department
Unlike the built-in department, the
separate export department is essentially
self-sufficient; and it is well equipped to
handle all the activities connected with
the export business. It is not, therefore,
at the mercy of domestic departments.
A separate marketing department avoids
some of the problems of the built-in
department.
Organization

Export Department Structure
Fig. 7.2

Organization

Export Sales Subsidiary
Firms with large export business may
establish export subsidiary companies and
divorce international marketing activities
from domestic operations because of
certain advantages associated with it.
In terms of internal organization and the
specific activities performed, the sales
subsidiary differs very little from a
separate export department.
Organization

International Division
An export department or export subsidiary
may be suitable for handling large exports
but they may not be sufficient for
managing the non-exporting international
market entry modes.
So companies having foreign subsidiaries
whose role is not confined to sales alone
tend to establish an international division
to manage the international business.
Organization

International Division
Structure
Fig. 7.3

Organization

Global Organizational
Structures
1. Global product structure
2. Global geographic structure
3. Global functional structure
4. Global customer structure
5. Global matrix structure

Organization

Global Product Structure
Fig. 7.4

Organization

Global Geographic Structure
Fig. 7.5

Organization

Global Functional Structure
Fig. 7.6

Organization

Global Matrix Structure
Fig. 7.7

Organization

summary
Organizational structure tends to
undergo changes during different
stages of evolution of a domestic firm
into a transnational one. The common
organizational types are:
Built-in export department
Separate export department
Organization

Global structures have evolved due to
growth of business and competition on a
global basis. The basic types of global
structures include:
Global product structure
Global geographic structure
Global functional structure
Global customer structure
Global matrix structure
Organization

International Organizations

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