Five Steps in Designing Organizations for the Global Business Environment

Step 1- Determine the level of global involvement.

There are various strategies in which businesses can engage global expansion; determine which is appropriate for the venture. Examples include exporting (or importing), contractual agreements (or franchising, licensing or sub-contracting), and direct investment (or acquisition, joint ventures or establishment of an overseas division).

Step 2 - Decide which foreign market to enter.

 Research the local demand for the firm's product or service, availability of needed resources for production and marketing, and the ability of the local workforce to produce the desired quantity and quality of the designated products, as noted by Boone in "Contemporary Business."

Step 3 - Research potential barriers to international trade.

World Trade Organization, the World Bank and the International Monetary Fund are organizations that create alliances to remove (or mitigate) barriers to the flow of trade, goods, capital and people across borders of its members. Read the North American Free Trade Agreement (NAFTA), Central America Dominican Republican Free Trade Agreement (CAFTA-DR) and European Union (EU).

Step 4 - Recognize and address social and cultural differences.

Differences in languages, values, religion, standard of living, and business practices differ among countries and must be addressed with sensitivity and respect.

Step 5 - Distinguish between the global and multi-domestic business strategy.

The global strategy addresses a position of standardization, offering the same product worldwide; the multi-domestic strategy employs the principles of adaption, customizing products to the customs and preferences of a nation.