International-Business-Dr-R-Chandran-E-book

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International Business- Dr. R. Chandran
problems arising from nearby countries through their sub-headquarter.
It is serving the purpose of administrative convenience.
6. Global organizations: These organizations have a physical
presence in other parts of the world and cater to customers in different
countries through standardized products by consolidating resources
from any part of the world. Today, every company dreams of
becoming a global company. Companies shift their manufacturing
bases to more profitable locations, open up warehouses in special
economic zones and train people to be multilingual, multi-strategic
and multi-functional in order to manage the business successfully.
The difference between polycentric and global multinationals is that
the latter is very closed to customer and does not give extra weight-
age to the headquarters. Global orgainsations take into account
customer tastes and preferences. They employ cost cutting techniques
and are able to provide customers with good quality, low-priced items.
They have enormous respect for the country in which they operate and
integrate themselves into the society.
BASIC PHIPLOSOPHIES OF MULTINATIONALS
MNCs will always look out for opportunities. They carry out risk
analysis, and send their personnel to learn and understand the business
climate. They develop expertise in understanding the culture, politics,
economy and legal aspects of the country that they are planning to enter.
They look at the global, rather than only local potential. The essential
element that distinguishes the true multinational is its commitment to
manufacturing, marketing, developing R&D, and financing opportunies
throughout the world, rather than just thinking of the domestic situation.
STRUCTURE OF MULTI-NATIONAL CORPORATIONS
MNCs can be categorized in 3 main structures:
1. Attachment of Subsidiaries with General (or Top) Management of
the Parent Company and with the CMD
2. Creation of an International Division
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