Academic journal article Journal of Business Administration

Administrative Structures and Processes to Promote Internationalization

Academic journal article Journal of Business Administration

Administrative Structures and Processes to Promote Internationalization

Article excerpt

1.0 INTRODUCTION

There is little disagreement that business schools must adjust to the international business environment of the 1990s, which is marked by the globalization of business operations, geographical market integration, and a rapidly increasing interdependence among national economies. The required adjustment must be brought about by increased exposure of students to "a unique melding of theory and practice of business-management functions in both domestic and international contexts" (Corporate Higher Education Forum, 1988, p. 19).

International expertise extends beyond the understanding of the processes and institutions that regulate international business transactions and their relationships to domestic business. Such expertise may include the development of "knowledge of language(s), law, culture, politics, economics, and business practices in specific countries as well as understanding how these factors change from country to country, and an openness and sensitivity to national differences" (Kobrin, 1984).

The extent and scope of international expertise that a business school might desire to develop in each of its constituencies may vary significantly and so can the means it chooses to implement the process of building international expertise. Each strategy chosen poses its own type of administrative difficulty and may require a different structure (Chandler, 1962). Organizational structures, however, rarely reflect pure rational solutions to organizational problems. To a large extent they reflect historical circumstances as well as current needs (Thompson and Strickland, 1992). The "fit," however, between the structure and the chosen strategy for internationalization is likely to determine to a large extent not only the effectiveness of the internationalization process, but whether it takes place at all. (See, e.g., Galbraith and Kazanjian, 1986; Child, 1977).

In this paper we shall examine alternative organizational structures and their appropriateness when implementing specific "internationalization" strategies. We shall take structure to mean not only the lines of authority, communication networks and the information that flows through these lines of authority, but also to include the designs of other basic organizational processes and systems. In particular we shall consider the system for organizational resource allocation and the organizational reward system.

We begin the paper by exploring three basic alternative strategies for internationalization (section 2) and by identifying some essential organizational design requirements that need to be fulfilled to ensure implementation of these strategies (section 3). We then explore some mechanisms for internationalization (section 4) and examine the structures that need to be established to support them. We also investigate in section 5 how reward and resource allocation systems need to be designed to enable implementation of internationalization strategies.

2.0 INTERNATIONALIZATION STRATEGIES

There are three broad approaches towards internationalization that schools of business may adopt either as pure strategies or as combination strategies. The first approach focuses on the internationalization of all academic functions within the organization. It seeks to incorporate explicitly the international dimension in all the activities of the school including the coursework, student activities and programs, and faculty research. This strategy promotes the concept of "thinking globally" to take appropriate decisions "locally" across a variety of subject areas. While maintaining disciplinary paradigms, the strategy requires a change in perspective, sensitizing students and faculty to the role that national environmental context plays when interpreting or applying disciplinary paradigms. The added emphasis on the environmental context, however, implies a higher emphasis upon those activities that promote an holistic perspective of the business decision environment (hence the promotion of inter-disciplinary context-rich activities). …

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