Question

1. A small manufacturing firm believes there is a market for handheld tools that are carefully crafted for local markets. After spending two months in Europe, the president of this firm believes that his company can create a popular line of these tools. What type of organization structure would be of most value to this firm in its initial efforts to go international?
2. If this same company finds after three years of international effort that it is selling 50 percent of its output overseas, what type of organizational structure would you suggest for the future?

Answer 1

answer-

The best organization structure i believe is initial division structure because Currently business is small and done only two months analysis of European market so In this structure company would make export of its tools to European market Initial division structures are common in subsidiaries, export firms, and on-site manufacturers. This organization structure would help to reduce its business cost and provide future opportunity that it should grow its business overseas or not. Companies having on-site manufacturing operations follow this structure to cut down their costs.

After company finds with 3 years of market analysis that it is selling 50 percent of its output resources then i would suggest to use International Division Structure in which all the operations of overseas will be controlled by division created in international market. This structure is built to handle all international operations by a division created for control. It is often adopted by firms that are still in the development stages of international business operations.