BU398 Chapter 6: Chapter 6
Document Summary
Chapter 6: designing organizations for the international environment. Achieving lower costs through large volume production; often made possible by global expansion. Building a global presence expands an organization"s scale of operations, enabling it to realize economies of scale. For many companies, domestic markets no longer provide the high level of sales needed to maintain enough volume to achieve scale economies. They also enable companies to obtain volume discounts from suppliers, lowering the organization"s cost of production. Scope refers to the number and variety of product and services a company offers as well as the number and variety of regions, countries, and markets it serves. Having a presence in multiple countries provides marketing power and synergy compared to the same size firm that has presence in few countries. Factors of production are supplies necessary for production, such as land, raw materials, and labour.
