Summary Chapter 9: Entry Strategies and Organizational Structures - Comprehensive

Chapter 9: Entry Strategies and Organizational Structures Learning Objectives and Chapter Summary 1. DESCRIBE how an MNC develops and implements entry strategies and ownership structures. MNCs pursue a range of entry strategies in their international operations. These include wholly owned subsidiaries, mergers and acquisitions, alliances and joint ventures, licensing and franchising, and exporting. In general, the more cooperative forms of entry (alliances, joint ventures, mergers, licensing) are on the rise. 2. EXAMINE the major types of entry strategies and organizational structures used in handling international operations. A number of different organizational structures are used in international operations. Many MNCs begin by using an export manager or subsidiary to handle overseas business. As the operation grows or the company expands into more markets, the firm often will opt for an international division structure. Further growth may result in adoption of a global structural arrangement, such as a global production division, global area division structure, global functional division, or a mixture of these structures. 3. ANALYZE the advantages and disadvantages of each type of organizational structure, including the conditions that make one preferable to others. Although MNC’s still use the various structural designs that can be drawn in a hierarchial manner, they recently have begun merging or acquiring other firms or parts of other firms and the resulting organizational arrangements are quite different from those of the past. The same is true of the many joint ventures now taking place across the world.