BU398 Chapter Notes - Chapter 6: Normal Matrix, Product Design, Organizational Culture
Document Summary
Chapter 6: designing organizations for the international environment. Economies of scale: achieving lowest possible cost per unit of production through large- volume production. Companies would need large share of domestic market to achieve scale economies organizations forced to become international to survive. Economies of scale enable companies to obtain volume discounts from suppliers. Economies of scope: # and variety of regions, countries, and market it serves presence in multiple countries provides marketing power and synergy compared to firms in fewer countries. Can increase company"s market power as compared to competitors b/c company develops broad knowledge of cultural, social, economic, and other factors that affect its customers in varied locations and can provide specialized g/s to meet those needs. Low-cost production factors: opportunity to obtain raw materials and other resources at lowest possible cost. Secure raw materials that are scarce or unavailable in home country. Turn to other countries for cheap labour.
