A strategy refers to a course of action, taken by the management of a firm in order to achieve one or more of the firm’s objectives. International Strategy refers to when a domestic firm carries out its core strengths in an international market, and the players in the international market usually , do not have these strengths. Organizational design will have to be flexible if a firm undertakes an international strategy. A well planned organizational design will improve the chances of the organization achieving its objectives. The management of the firm will decide whether to use a lean or flat organizational design.
Most companies, which pursue an international strategy, use a divisional zed organizational structure, to enable the management to pin point the divisions which are not performing well and corrective measures can be taken. A well designed organizational design will improve profitability, creativity and communication in the organization. Organizational design will lead to more efficiency and effectiveness of a firm. Importance of international strategy to the business community International strategy is relevant to business people for it will enable the domestic firm increase its sales because international strategy will open up more markets.
Increased sales have got the inherent advantage of increased profitability. Employees who have got an international exposure generally perform better than the employees who have only worked in the domestic country. International strategy helps in the career development of employees especially manager development, producing well rounded employees. Many business people will have to decide whether, to manufacture products, or export the products to the international markets or they will outsource the production of the company’s products to the companies in the international markets. Outsourcing of the production is much cheaper than exporting.
Business people before adopting an international strategy will have to know the legislations in international markets, relating to outsourcing before taking an outsourcing strategy. The Firm will also have to familiarize itself with the legislations concerning the business operations in the host foreign country. The global strategic planning process By definition strategic planning is when a firm comes up with short term ,and long term objectives plus the means of achieving these objectives. Strategic planning explains where the firm is, where it is heading, where it is supposed to be, and how the firm will get to where it is supposed to be.
It involves coming up with a vision, mission, and objectives of the firm. The global strategy planning process follows the following steps;- 1. Coming up with the vision, mission and objectives of the firm-vision is where the firm wants to be in 5-10 years time. The mission statement on the other hand, is the rationale for business existence. The vision and mission will help the firm to come up with objectives. Objectives can either be financial or strategic in nature. 2. Environmental scanning- this involves carrying out an internal analysis, and external analysis of the industry in which the firm is operating in .
The SWOT analysis ,is used to carry out the internal analysis while the industrial analysis, is carried out using porter’s five forces model. The pest model is used to evaluate a firm’s external macro environment. 3. Formulation of strategy- the environmental scanning will reveal to the firm its strengths, and opportunities. The firm matches the strengths and weaknesses, to come up with strategies which will give the firm a competitive advantage. For a firm to gain a competitive advantage, it can apply Porter’s generic strategies. 4. Implementation of strategy-the strategy formulated is implemented in the organization.
The implementation can take the form of budgets ,and programs. The firm should practice participative management in order for the strategy to be achieved by the employees and reducing resistance to change. 5. Control and evaluation-this involves coming up with targets, measuring the actual performance, comparing the actual performance with the targets, and taking corrective measures, for any deviations detected. , A firm’s organization design should be flexible, in order to accommodate changes which are presented to the organization by the strategic planning process. Controls in an international company
For a company perusing an international strategy to be successful, it has to put in place elaborate controls. Controls in an international company the following forms 1. Internal controls: this controls involve coming up with an elaborate internal control system and an elaborate internal audit function in the firm The internal controls are subdivided into three broad categories ;- i. Detective controls ii. Preventive controls iii. Corrective controls 2. External Controls: an international company will have to adhere to corporate governance practices by appointing external auditors.
The business environment changes rapidly an international company will have to put a strategic planning system that incorporates changes in the business environment. An international company will have to put in place a planning system; that can predict the future. Managers will use these predictions, and match them with the strengths of the organization in order to ensure that the company is successful.
Van der werff, T. J (2007): Strategic Planning for fun and profit retrieved on19th December 2007 fromSample Essay of 7essays