Strategies for Global Firms' Organizational Structure: Paper Example

Introduction

Four major global procedures govern the structure of global companies. These strategies are unique in their own manner and are pursued based on the set objectives. The main approaches entail the domestic exporter, franchiser, multinational, and transnational.

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The Domestic Exporter

The domestic exporter focuses on centralized activities in the home country and forms the basis of most international companies during initial conception. The activities of the company such as production, marketing, strategic management, and accounting are centralized in the home country. Later o the company may choose whether to diversify in other forms or not. In instances international sales may be dispersed using subsidiaries; however, global marketing remains dependent on the domestic market for marketing strategies and themes (Laudon and Laudon, 2018). Most of the substantial capital equipment companies such as the Caterpillar Corporation are domestic exporters.

Multinational Strategy

Under the multinational strategy financial management and control are carried out at the home country of origin while other services such as production, marketing and sales re decentralized in other nations, therefore, forming an extensive association of various production and marketing facilities. The products and the services being sold by the company are also modified to suit the domestic market conditions. An example of firms that fit this system entails Intel and General Motors (Laudon and Laudon, 2018).

Franchisers

Franchisers form an interesting mix as a combination of financing, production and design are initially conducted in the home-based market but depending on product-specific. Eventually, further human resource, funding, and production activities the organization are dependent on the foreign market (Laudon and Laudon, 2018). Good examples of franchisers are the McDonald's and KFC. The McDonald's started as a fast food chain that was initially based in the US and continues to rely heavily on the US market for new product inspirations, financing, and management. In the local market recruitment, production activities, and marketing are still carried out as inputs, and final outputs' are perishable. However, there are also international franchises that are clones of the mother country McDonald's, yet they produce and market their products locally as factors of production must be reasonable to consumers (Laudon and Laudon, 2018).

Transnational Firms

These are stateless firms that are globally managed. With technological advancement, transnational firms represent the business of the future. Transnational firms have regional headquarters, and possibly world headquarter rather than the accustomed single national headquarter used by other companies. The activities of the firm are carried out on a global perspective with no national boundary affiliations while taking advantage of available global competitive production resources and local competitive advantages (Laudon and Laudon, 2018). Therefore, the global perspective forms the management structure of reference for transnational firms.

The governance of transnational firms has been depicted to be in line with the federal structure which forms the central management decision making although financial muscle and power are distributed globally. Limited companies are attempting transnational status with Sony, Citicorp, Ford endeavoring transition (Laudon and Laudon, 2018).

The technological advancement and global telecommunications are acting as motivators for international firms to implement global strategies. At the same time firms are edging towards taking advantage of the local markets due to benefits such as protectionism. Thus there are pull and pull factors encouraging decentralization as well as centralization of activities and power.

Reference

Laudon, K. C., & Laudon, J. P. (2018). Management information systems: managing the digital firm. Pearson.