Organizations of International Business

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Features of IB

Operating Units outside the country

Massive in Scale

Influence Political, Social and Economic Development

Institutional Arrangements

Vertical Differentiation: Centralization V/S Decentralization

Vertical Integration: The issue of determining where in the hierarchy, the authority to make decisions stand.

Centralization is the degree to which high level managers, usually above the country level, make strategic decisions and pass them over to lower levels for implementation.

Decisions made at foreign subsidiary level are considered decentralized, and those made at HQ are considered to be centralized.

Centralization Decentralization Decisions made by senior level managers at HQ.

Facilitates coordination of value chain

Ensures decisions are consistent with strategic objectives.

Senior executives have authority to direct major change.

Preempts duplication of activities

Reduces the risk of making wrong decisions at low level

Ensures consistent dealings with all stakeholders.

Discourages initiative among lower – level employees.

Decisions made by employees, who are closest to the situation.

Employees who directly deal with customers, markets, etc

Motivates employees to exercise initiative.

Enables more flexible response to rapid environmental changes.

Permits to fix better accountability.

Puts the org at risk for bad decision making.

Cross – unit coordination is at stake for favouritism.

Centralization V/S Decentralization

Horizontal Differentiation: The Design of the Formal Structure

Horizontal Differentiation: The way a co. designs its formal structure to perform the following functions;

1. Specify the set of organizational tasks.

2. Divide these tasks into jobs, departments, subsidiaries and divisions to get the work done.

3. Assign authority relationships to get the work done in a way that supports co. strategy.

Types of International Organization

The company’s approach to global expansion needs to fit in to its corporate agenda, and be in tune with the industry and time. Cross national business have been labeled into tour types in terms of organizational structure buy researchers.

Multi-domestic Organization

It is one that exports to/imports from organizations in other countries with primarily domestic production. The subsidiaries develop into decentralized decision-making units, make use of local resources to create a self-sufficient entity.

Ex: GM, is a firm with subsidiaries extending over Europe that stand along as self-contained units.

International Organization

It has its assets centralized at its headquarters. The knowledge base is developed at the center, and from there it is dispersed to overseas locations. Subsidiary units are expected to leverage their local capabilities. Here core competencies are central, parent company capabilities are used, and knowledge disseminates from center outwards.

Ex: Microsoft, Core product is developed at center, and the subsidiaries take care of localizing the product to fit the customer requirements that are regional or local.

Global Organization

It is one that is centralized but scaled globally, with

knowledge retained at the center. Control is retained at the center. The subsidiary units have to furnish information to the center and comply with the headquarters control. Subsidiary units must draw from the best practices and experiences of all the subsidiary units and adopt the most efficient strategies from the entire company.

Ex: Intel, keeping performance up to global standards and taking advantage of the learning, drawn from experience to show in terms of low costs and location advantages

Transnational Refers to an enterprise where national boundaries

get blurred. Both centralized and decentralized methods are adopted in this model. While units are specialized, interdependence of units is also a characteristic feature. The subsidiary units abroad play an active role in the development of the firm’s capabilities and share knowledge with worldwide locations. This model enables a firm to “think globally and Act locally”.

Ex: Caterpillar Inc., has set up manufacturing units in certain locations for many identical components. It however has assembly units in each of its major markets, so that the product can be made to suit local needs.

Organisations of IB

WTO

ICC

The Federation of International Trade Associations

Business Council for International Understanding

International Association of Business Communicators

International Labour Organisation

UNIDO

World Bank Group

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THE FEDERATION OF INTERNATIONAL TRADE ASSOCIATIONS

Founded : 1984, Nelson Joyner to foster the international trade community providing benefits and services

It fosters international trade by seeking to strengthen the role of trade associations and bi-lateral chamber of commences

Headquarters : Virginia and New York

comprised of 450 association members and 450,000 linked company members

FITA has signed partnership accords with three major B2B marketplaces: Alibaba.com, Kompass and Thomasnet

In June 2009, the Federation of International Trade Associations signed a public-private partnership with the United States Commercial Service, the trade promotion arm of the United States Department of Commerce (DoC), thereby sanctioning the publication of the DoC’s market studies on GlobalTrade.net.

In August 2010, FITA signed another similar PPP with UK Trade & Investment.

Business Service Providers for International Trade GlobalTrade.net

Free database of business service providers useful for importers and exporters

The site’s business service providers include;International Marketing consultants, Trade finance companies, Banks, freight forwarders, quality control firms, lawyers, accountants, customs brokers, international trade instructors and insurance providers for their international operations.

INTERNATIONAL BUSINESS ORGANIZATION

Group that serves the international community who wants to do business in or immigrate to the United States of America with a special purview related to the state of Florida.

IBO can assist with real estate information, immigration services, health insurance, and unique networking contacts

Specialists in different fields are part of ibo team und all of them are available with the planning in home country to the point of start in USA

INTERNATIONAL ASSOCIATION OF BUSINESS COMMUNICATORS

Global network of communications professionals

Founded: 1970

Not-for-profit

Serves members in more than 70 countries for networking, career development and personal growth

Each summer, IABC hosts World Conference, a three-day event with professional development seminars and activities, as well as talks by industry leaders.

IABC offers professional, corporate, student and retired memberships

Decisions within the organization are made by a two-thirds vote of the executive board, which is elected by members.

IABC members agree to follow a professional code of ethics

IABC Research Foundation formed in 1982

Financial troubles in 2000 after losing $1 million in an e-business initiative called TalkingBusinessNow

IABC also has various committees focused on ethics, research, finance, auditing and others.

All positions within IABC are filled by volunteers.

BUSINESS COUNCIL FOR INTERNATIONAL UNDERSTANDING

Not-for-profit, nonpartisan, membership organization that encourages dialogue between business and political leaders in different countries.

It holds events, briefings and programs for networking and education.

Membership comprises more than 200 companies, including many Fortune 500 firms

Formed November 10, 1955, at the White House Industrial Cooperation Council Conference, as an initiative directed by U.S. President Dwight D. Eisenhower

BCIU is governed by a volunteer board of directors comprised of senior executives from approximately 40 multinational companies.

It is headquartered in New York City, with additional offices is Washington D.C. and London.

In 2003, BCIU introduced the Dwight D. Eisenhower Global Leadership Award

WORLD TECHNOLOGY NETWORK Founded : 1997 by James P. Clark

over 200 organizations/companies, spread out over 60 countries

Global association of over 1,000 of the peer-nominated, peer-elected most innovative people in science and technology elected annually through the World Technology Awards

WTN works to accomplish its mission through global and regional events for its members (and others) to help make connections among them, and to examine the likely implications and possible applications of emerging technologies.

The community also includes marketers, writers, entrepreneurs, government officials, and policy analysts – people who are bent on creating dynamic systems to enhance world productivity and efficiencies

Word Technology Awards

Occurring since 1999, the WTSA is a two-day, global gathering of the WTN membership , presented each year to the outstanding innovators from each sector within the technology arena.

Awards are announced each year in a gala ceremony at the close of the annual World Technology Summit

Awards are presented in categories to both individuals and corporations who best represent WTN goals and ideologies.

WTO

WTO is an organization for trade opening.

 It is a forum for governments to negotiate trade agreements.

It is a place for them to settle trade disputes.

It operates a system of trade rules.

The WTO was born out of negotiations, and everything the WTO does is the result of negotiations.

 The WTO officially formed on 1 January 1995 under the Marrakech Agreement, signed by 123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trades  (GATT), which commenced in 1948.

161 members countries

Last to negotiation rounds of WTO.

Doha Development Agenda

Trade negotiation round of WTO held in Doha in 2001.

Objective was to lower trade barriers across the world.

Since 2008, talk was not fruitful because of some major issues such as agriculture, industrial tariff, services and trade remedies.

The July 2008 Negotiation broke down after failing to reach a compromise on agricultural import rules.

Bali Round

Extension of Doha Round

Covers food security in developing countries like China and India.

India was in the light

Agriculture subsidy for Food Security Bill

Subsidies for trading cotton was implemented by the WTO

Duty free market access for LDC.

ICC

International Chamber of Commerce is the largest and most respective business organization in the world.

Group of industrialists, financier and traders started this organization in 1919 and called themselves “the merchants of peace”.

3 main activities

Rule Setting Dispute Resolution Policy Advocacy

There are two ways to become a member of ICC:

1. Through affiliation with an ICC national committee or group.

2. By direct membership with the ICC International Secretariat when a national committee/group has not yet been established in your country/territory.

 ICC has developed a large array of voluntary rules, guidelines, and codes – sometimes referred to as ‘trade tools’. For example “Incoterms”.

The International Court of Arbitration of the International Chamber of Commerce steers ICC Arbitration and has received 20,000 cases since its inception in 1923.

India Economic Convention 2015

Took place this year in Delhi.

Five takeaways from the events.

1. India is a shining star of the BRICS.

2. Trade for jobs and growth.

3. Bridging the digital divine.

4. Skill Developments

5. Business and government working together

Conclusion

Without These organizations trade control among the nations is not possible.

These organizations always support LDC to grow and take part in world trade.

The Peterson Institute for International Economics estimate that if the customs measures of the agreement are properly implemented, they could create US $1 trillion worth of global economic activity, add 21 million new jobs and lower the cost of doing international trade by 10–15 percent.

Helps to maintain the peace among the countries.

Today world trade is not possible without these organizations

THANK YOU