ULUSLARARASI İŞLETME

Although strategies of international businesses and strategies of domestic businesses might be very similar, variables that must be taken into consideration in the strategy formulation process are much more
complicated for international businesses. The strategies of international businesses focus on more than one country, and they are implemented in more than one country. International business managers formulate strategies to perform activities that create value at a global scale,
operate in important markets, and establish value-adding international partnerships. On the other hand, both international and domestic businesses must formulate strategies to use their organizational resources effectively and efficiently,

Flexibility refers to an organization’s ability to respond to uncertainties by adjusting its objectives with the support of its superior knowledge and capabilities. While uncertainties cause threats for many businesses, for those who have a high level of strategic flexibility, such uncertainties
could be turned into opportunities. On the other hand, efficiency refers to how an organization utilizes its resources while achieving its goals. These resources include human resources, monetary resources, and capital resources, that should not be wasted or kept idle. Learning refers to product and process development skills that are entirely new to the current experiences of the firm as well as to the knowledge and skills that are familiar with the organizations’ current experiences..

Although there are different approaches, this chapter in our textbook focuses on two main strategy preferences, namely product-market
strategies and competitive strategies.Competitive strategies in the strategy literature is the one developed by Michael Porter. According to Porter, strategic decisions made by the managers have essential effects on the competitive position of the business. Such competitive advantages were often expressed in terms of the additional added value which the more successful firms in an industry were able to generate compared to its market rivals in that industry. Differentiation strategy is one of the these three generic strategies for businesses, each of which aims to help organizations achieve a competitive advantage. Market penetration, market development, product development, and diversification strategies are product-market strategies introduced by Igor Ansoff in 1957.

The notion of strategy has evolved from a more internal perspective into a more complicated perspective that takes products, markets, and customers into consideration. In the traditional view, strategy development was considered to be a top management activity. However, the current view suggests that all levels of the organization should have a role in the strategy development process.

At the initial stage, the organization would be most likely to build a department to handle international activities. There are several options for the business at this stage such as establishing an import / export department, a foreign trade department, an international sales department, or  an international division. However, as the scope of global activities expands further, businesses seek further and more advanced alternatives and solutions for organizational design decisions.  From this standpoint, there are several organizational design options for international businesses: Global product structure, global area structure, global functional structure, and matrix structure are commonly used by international businesses.

All information, authority, and decision making related to foreign efforts are channeled to international division, so there is one central clearing point for international activities.

Organizations with diverse products and services prefer product structure. Products and product groups are central to this organizational structure. All international operations are also organized around these products and product groups. Organizations that adopted a global product structure may also have regional experts. Thus, they can determine the region-specific needs more accurately and respond to these needs faster. Feedback obtained from different countries would
be channeled into the process of determining better product strategies.

According to global functional structure, businesses are organized
around the main functions such as marketing, finance, production, and R&D. So, this organizational structure supports and enhances specialization within the international organization.

A matrix structure is a hybrid organizational design option that blends two organizational responsibilities, such as functional structure and product structure or regional structure and product structure. If the environmental conditions call for meeting regional needs, a combination of regional and product structures for the matrix structure would be more likely. Because, market and customer needs are better understood
since global product structure focuses on products and customer groups. Similarly, businesses can quickly respond to diversified  regional needs and expectations in global area structure.

Efficiency refers to how an organization utilizes its resources while achieving its goals. If organizational resources are wasted or kept idle, then it could be said that efficiency is low. It is important to note that organizational resources do not only refer to the resources related to production. Other resources, such as human resources, monetary resources, and capital resources, are among other resources that should not be wasted or kept idle in order to achieve organizational and managerial efficiency.

Option C defines strategic flexibility.

According to the market penetration strategy, businesses aim to increase their sales without abandoning their existing product-market strategies. Among these strategies are increasing the sales to the existing customer base or finding new customers for the existing products and services.

Differentiation strategy is a strategy very different from the cost leadership strategy because it focuses on innovation and superior value creation instead of cost control. Businesses pursuing a differentiation strategy strive to achieve a competitive advantage in the market by offering unique and superior products and services.

The focus of the cost leadership strategy is to reduce the costs of the business while maintaining quality. This strategy requires the business to achieve costs lower than its competitors. By doing so, businesses aim to achieve a competitive advantage by seizing the opportunities introduced by the low costs.

Strategy as total organizational process is an emerging view while the others are traditional.

The international division structure reduces the CEO’s burden of the direct operation of overseas subsidiaries and domestic operations.

Organizations with diverse products and services prefer product structure. Many international businesses use global product structure. Products and product groups are central to this organizational structure. All international operations are also organized around these products and product groups. Organizations that adopted a global product structure may also have regional experts. Thus, they can determine the region-specific needs more accurately and respond to these needs faster. Following the global product structure, each product group can make their own operational decisions, evaluate investment opportunities, and market-relevant products and services.Organizations with diverse products and services preferm to use a product structure.

Global area structure is a commonly preferred organizational structure by international businesses. When businesses operate in different geographical areas with different specifications, the global area structure offers a few advantages for international businesses. In this structure, businesses are organized around countries or country groups. The departments and divisions are responsible for the whole functions and products in a given geographical area.

A matrix structure is a hybrid organizational design option that blends two organizational responsibilities, such as functional structure and product structure or regional structure and product structure .

Efficiency refers to how an organization utilizes its resources while achieving its goals. If organizational resources are wasted or kept idle, then it could be said that efficiency is low. The correct answer is B.