Multinational

By: Xiaoyu Liu

Multi-National 

The world was formed by a variety of people, races and nations. The world went through many difficult times, but different areas always learned from history, and never stopped the progress. They kept moving forward for a better future. As time goes by, different people know that there are many races different from their own. Thus, people are getting to know each others’ cultures, getting close to each others’ place, and starting business and trade with each other. The nations are divided, but people are connected, so the concept of multi-national expansion becomes more popular and comprehensive. Therefore, internal and external factors are indications of why the concept of multi-national cooperation is important. 


INTERNAL Factors

• Talent Wanted

First of all, a trend of expanding business to the outside of the native country is becoming more common for companies (Athreye, S., & Kapur, S., 2009, p. 210). Domestic companies are looking outside their own country to explore and find more talented people and workers that could help a company to develop better. Outsiders tend to have unique perspectives, so they probably will create more new ideas than the native workers. Talented workers often choose to seek interviews in foreign countries, meaning that they want to challenge themselves. This shows that they are enthusiastic about the jobs and are likely to come up with fresh ideas for innovations.

• Global Connection

As countries make more connections to each other, the world is uniting together. The Oriental countries may export silk and tea leaves to the Occidental countries, while, in return, the Occidental countries may export spices and coffee beans to the Oriental. People can live better because of the beneficial connection. “I’ll scratch your back if you scratch mine” is the concept behind this interaction.

• Domestic Product

As mentioned above, some raw materials are limited to a specific area. Although scientists use current technology that allows many outside country resources to become localized, it was still originally from somewhere else. The domestic products are finite, so people need to connect to each other to import and exchange things.

• Profit Increase

According to the expand accounting equation, cheap labor in the developing countries, better local networking, less transportation time and fewer traveling fees all result in an increase in profit because the cost of sales and production are reduced.


EXTERNAL Factors

• Market Competition

After a firm decides to invest abroad, the effect of changes in labor costs, market size, domestic resources, and global communication on market competition are based on organization’s strategy.
Coca-Cola Company did a good job at multi-national expansion and beat other soft drink industries as IBM did in an example discussed in the book (Colquitt et al., 2009). Beverage Digest said regular Coke remained the No. 1 soft drink with a 17% market share, selling 1.59 billion cases in 2010. One of the reasons is Coca-Cola fit into the local markets pretty well. For instance, they produced limited editions of Coke bottles in different countries during the different holiday seasons. Another strong example is the expansion of the Starbucks Company. They did research in the local market and innovated a variety of flavors, such as Green Tea Frappachino in most Asian countries. 
Both businesses are successful, impressive to customers and well-known international organizations and of course, have a stronger market competition than similar organizations.

•    International Strategy

The association between the organizational structure and the strategy that make up an organization's environment can be described as a "fit" relationship (Egelhoff, 1982). The good "fit" indicates that the organizational structure and strategy is well suited to exploit the resources of local environment. Also, if environmental conditions are subject to the strategy choice of organizations, the strategy is viewed as: "a mediating force between the organization and its environment (Egelhoff, 1982, p. 516)". Then an organizational strategy should reflect on the most significant elements of that environment. Once organizations are successfully structured properly, or fitted into the environment implied by these strategies, companies are at a position of advantage in exploiting their environments.

Conclusion

Based on the textbook: “An organizational structure formally dictates how jobs and tasks are divided and coordinated between individuals and groups within the company” (Colquitt, Lepine , & Wesson, 2009). As the previous article states, talented people helped company innovation. Each region has their own unique product to exchange with others; domestic advantages raise profits. All of the internal facts are correlated within the company.

In addition, the growth of foreign markets requires diversification and reorganization. In other words, in order to get success in market competition, implement organizational strategy wisely by fitting it into the local market.


All in all, the organizations that have been most successful in challenging multi-national tasks are those organizations that had already well-developed the ability to exploiting resources, absorbing talents, fitting into environments, maximum domestic advantages of controlling and guiding a heterogeneous, diverse enterprise.

References

Athreye, S., & Kapur, S. (2009). Introduction: The internationalization of Chinese and Indian firms—trends, motivations and strategy. Industrial and Corporate Change, 18(2), 209-221.

Colquitt, A. J., Lepine, A.,Wesson, J. M.. (2009). Organizational Structure, Organizational Behavior (p. 527).  Location: New York.

Egelhoff, W. G. (1982). Strategy and structure in multinational corporations: An information-processing approach. Administrative Science Quarterly, 435

Esterl, M., & Bauerlein, V. (2011). PepsiCo wakes up and smells the cola.The Wall Street Journal.

Westling, T. (2012). Corporate Structure and Globalization: an Inspection of a Multinational, 18