International Strategy

Abstract

Abstract Every initiative taken by an international firm has an impact on the ability of local firms to satisfy their customers. Larger organizations have resources and capabilities (financial, human, technical) of greater sophistication and usually (although not always) of greater efficiency than local, smaller providers of goods and services. International strategy initiatives by multinationals have an impact on small local firms. So, even when organizations have no activities outside their domestic market and no plans to develop any in the future, international strategy will influence their ability to survive. International strategy requires judgments about degrees of political risk, financial risk, and commercial risk which do not arise within the domestic home market. Therefore expanding outside the domestic market, dramatically increases risk. There are many different ways of being international. Different approaches to international strategy suit different companies in different industries at different times. Four different types of design and implementation of international strategies and organization structures have emerged: multidomestic; global; international exporter; and transnational. There is also a newer form of international strategy: the “born global” firm. As industries change, so firms need to evolve too. New industry structures require new international strategies. As international strategies change, then so also must international organization structures and the organizational processes within the multinational. That is why international strategy and structures must always be seen as contingent upon external conditions.