Organizations engaging in international management

Organizations that engage in international management vary con­siderably in size and in the extent to which their business activities cross national boundaries. One special type of organization involved in international management is the multinational corporation. Al­though definitions differ somewhat, the term multinational corporation (MNC) is typically reserved for an organization that engages in production or service activities though its own affiliates in several countries, maintains control over the policies of those affiliates, and manages from a global perspective.

Multinational corporations are not always easy to identify, since it may be difficult to determine from the outside how much control management maintains over the policies of affiliates or whether man­agement actually uses a global perspective. As a result? For purposes of gathering statistics, an arbitrary percentage (such as 25 percent of sales from foreign sources) is sometimes used to distinguish multina­tional corporations from other types of international businesses. How­ever, there is no single universally accepted percentage of foreign sales that clearly separates multination corporations from others.

Regardless of their size, companies may decide to expand inter­nationally for a number of different reasons. Some organizations may decide to expand internationally for a number of different reasons. Some organizations may become involved through unsolicited orders from foreign customers. Other may initiate international efforts in or­der to open new markets or to preclude foreign companies from enter­ing specific foreign markets and eventually becoming domestic com­petitors. Still others may be motivated by the need to develop sources of supplies, possibilities of acquiring needed technology, or prospects for reducing costs by operating in their basic orientation toward inter­national management.

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