International Business Expansion and Organizational Structure Report

This report delves into the optimal organizational structures for a firm's internationalization efforts. It begins by recommending a geographical division structure for initial expansion and suggests a functional structure for European market entry. As the company's international sales grow, the report proposes a matrix structure to manage multiple dimensions effectively. Furthermore, the report highlights the importance of additional research when a clothing chain needs to find new suppliers after the closure of its local textile supplier, emphasizing the need to assess potential suppliers in China, Bangladesh, Vietnam, and India. It outlines the risks of not undertaking such research, including ethical concerns and quality control. The report presents a systematic plan for investigating suppliers, including an executive summary, market analysis, and competitive analysis. Finally, it identifies key leadership skills required in a global environment, such as sensing, listening, and observing, crucial for understanding customer needs, anticipating changes, and ensuring employee productivity.

REPORT

Contents
ACTIVITY 1....................................................................................................................................1
Type of organisational structure that is most valuable to firm in its initial efforts of
internationalisation .....................................................................................................................1
Recommendation for changes in organisation structure of company for its expansion in Asia. 2
If the company finds after three years of international efforts that it is selling 50 percent of its
output overseas, what type of organizational structure would you suggest for the future?........3
ACTIVITY 2....................................................................................................................................4
Rationale for the additional research required ...........................................................................4
The major risk associated with not undertaking of work............................................................5
Present a plan for investigation of issues....................................................................................6
ACTIVITY 3....................................................................................................................................7
Skills that are required to lead effectively in a global environment............................................7
Reasons behind not having required skills yet............................................................................8
Ways in them office colleagues from different cultures identified skill shortage.......................9
The required skills sets/factors....................................................................................................9
Constraint regarding international capacity of office for next year’s professional.....................9
REFERENCES...............................................................................................................................11

ACTIVITY 1
Type of organisational structure that is most valuable to firm in its initial efforts of
internationalisation
In the mentioned scenario, division organisational structure on the basis of geographies
would be of the most value for the respective firm. This can be said because this type of
organisational structure allows divisions to be developed in accordance with locations, with a
firm having divisions in different parts of the world. By making use of this organisational
structure, the small firm can access flexibility with the help of a number of divisions in different
parts of the world. This enables each of the divisions within different parts of the world to act as
a separate unit with one or more persons reporting directly to the parent organisation's CEO (4
Types of Organizational Structures, 2019). Rather than getting the approval for all the programs
at top levels, the queries can be optimally resolved at divisional (geographical) levels.
Illustration 1: Geographically Divisional Organisational Structure
(Source: Geographically Divisional Organisational Structure, 2019)
However, the disadvantage of operating by making use of this organisational structure is
that by totally emphasizing upon the geographical divisions, personnel operating within the same
functions in different divisions may not be able to effectively coordinate and cooperate between
the divisions. Yet another downfall to this organisational structure that needs to be taken into

account by the company is that is gives rise to problems associated with accounting practices and
taxation.
Recommendation for changes in organisation structure of company for its expansion in Asia
Whereby the company finds a lucrative market for its products within the confines of
Europe and thereby decide to carry out expansion in to Asia, it is recommended that the entity
should facilitate a change within its organisational structure. When the small firm finds a
profitable market within Europe, it is essential that the organisation ensures that the opportunity
is availed in an effective manner by the firm. For this, it essential that the corporation
incorporates all the necessary changes that are regarded to be important for developing healthy
relations with customers, thereby inflating the market reach.
Thus, in the above mentioned scenario, it is recommended that the small firm should
adopt functional organisational structure. This structure divides the entity into small groups
having specified roles or tasks (Alon and Higgins, 2015). Generally, these groups are in
accordance with the business functions such as Marketing, Information Technology, Sales,
Production, Finance etc. This structure would prove to be fruitful in context of the new market
identified within Europe because hereby, each department has its own director who responds to
an executive who is one level above in the hierarchical structure who may be overseeing several
departments. The major merit of this kind of organisational structure is that hereby employees
are grouped in accordance with their skill set and functions, enabling them to align their
collaborative energy upon execution of their role as a departmental unit (Organizational
Structure, 2019).
One of the hurdles associated with this organisational structure that needs to be taken into
consideration by the small firm is the absence of inter-departmental communication, with
majority of the discussions occurring at managerial level in separate departmental units.

(Source: Functional Organisational Structure, 2019)
If the company finds after three years of international efforts that it is selling 50 percent of its
output overseas, what type of organizational structure would you suggest for the future?
In the scenario mentioned above, it can be said that matrix organisational structure would
prove to be the most beneficial for the company as this is specially devised to do management of
multiple dimensions. Whereby 50% of the output of company are being sold overseas, this
structure would be meritorious as it enables reporting at both horizontal and vertical levels and
makes use of cross functional teams for giving their significant contribution to functional
expertise. Hereby, personnel may be seen to be belonging to a certain functional group yet it may
be giving its contribution to team which is supporting another program. Matrix organisational
structure collectively brings staff as well as managers within the various departments to operate
effectively for the accomplishment of common stipulated goal of company (Brettel, Chomik and
Flatten, 2015). This results in effective flow of data allowing the departmental units to work
together and set communication to resolve issues among them.
Illustration 2: Functional Organisational Structure

(Source: Matrix Organisational Structure, 2019)
Even though by working across a number of functions, staff can adequately enhance its
skill set and knowledge base, reporting to a number of managers for their working may result in
occurrence of complexities within the organisational premises (Jokinen, 2015). This needs to be
taken into consideration by the small firm while adopting this organisational structure.
ACTIVITY 2
Rationale for the additional research required
As the local textile supplier of the local clothing chain / store has been closed, it has
given rise to the need of identifying other potential suppliers who can do the same work for the
entity. The clothing chain has a strong goodwill in market place owing to its high quality and
fashionable shirts. Thus, the firm is considering to explore the international options as this would
inflate the scope for the company to ensure that the suppliers produce materials as per the
standards stipulated by the organisational and the goodwill of clothing store in market place. The
additional research with respect to the short-listed prospective suppliers is required owing to the
trends that are prevailing within the fashion sector (Mendenhall and et. al., 2017). This is
acknowledged as a sector from which people have a lot of expectations in terms of quality,
Illu
stration 3: Matrix Organisational Structure

pricing, material and accessibility. In this regard, it has also been identified that with the influx of
time has emerged the concern of customers regarding ethical clothing. Also, people have now
become aware of the environmental as well as social impacts of textile manufacturing. Thus, the
additional research into the short listed prospective suppliers located in China, Bangladesh,
Vietnam and India with capability to produce the shirts is justified as this would enable to
identify any kind of misconduct or unethical behaviour that these suppliers are engaged in. Also,
the additional research would provide aid in recognising the vendors who have been successful
in gaining the support of other companies and customers over the period of time. Thus, with the
study, the most appropriate and relevant supplier can be determined for which the firm can
negotiate for the initiation of the production process.
The major risk associated with not undertaking of work
As per the given case scenario, it has been identified that conducting this research is
highly important for the company as it will secure them from different kind of risk which might
occur in future if this investigation has not been conducted. Some of the major issue that might
occur in case when research does not undertaken are :
 There are probable chances that new suppliers would not perform their work in ethical
manner. Thus, through conducting this investigation reliability and relevance of supplier
can be checked in effective manner (De Vries and Florent-Treacy, 2012). As a result, it
will help them out in maintaining their brand name at global marketplace.
 It will also help in avoiding chances of wastage as if wrong supplier would have been
selected by company then there were strong chances that these suppliers would not utilise
the money in right direction. This might develop situation of financial trouble for the
company (Supplier selection process, 2019).
 Also, it can be said that without execution of this research it would not be possible for the
company to maintain quality of production. This is because wrong selection of supplier
could create situation of low quality production which will ultimately affect brand name
at international marketplace
 The company holds up strong position within marketplace and in case when it make up a
contract with the local textile provider who are not working ethical manner i.e. using a
process or material that may affect environment. Then in this case it directly affect the

goodwill of company in marketplace and as a result of which the sales as well as
profitability may also reduce.
Present a plan for investigation of issues
The issues would be researched in a systematic and structural approaches consisting of a
number of stages and these stages are mentioned below:
 Executive summary: The current investigation is performed to gather the information
regarding available local textile supplier so that their proper evaluation can be performed
for choosing best out of them. This will further support in identifying the suppliers that
are working ethically so that high quality material can be used by company in its offering
to maintain its market position.
 Phase I: The first stage here would be to gain the knowledge of prospective suppliers
from the sector, i.e., from other firms operating within the same sector as them.
 Phase II: The next stage would be to gain comprehensibility of the market standing of all
the selected suppliers.
 Phase III: The succeeding phase of the plan would be to carry out a competitive analysis
among all the prospective suppliers on the basis of certain criteria. Such criteria would be
quality, price, reliability, value for money, collaborative approach to working, service and
communication (How to Choose the Right Supplier for Your Business, 2019). The
analysis would provide with a clear and prescriptive overview of all the vendors.
 Monitoring and Control- Once the selection of local textile retailer made and operation
started by the company, there must be a regular inspection performed over the work by
the office manager for monitoring the quality of work (De Vries and Florent-Treacy,
2012). So that in case any gap found between the planned and actual performance of the
company quick actions can be taken to improve them.
ACTIVITY 3
Skills that are required to lead effectively in a global environment
As per the article “Three Skills CEO Needs Most”, the skills which are required to be
present in an individual to lead in an effective manner are sensing, listening and observing
(Three Skills CEOs Need Most, 2018). The group thinking agreed to the ideology presented by
the writer of this article. In this regard, some of the key points summarised by the group are:

 Customers are regarded as the life blood of any business. To feasibly carry out operations
in market place, it is essential that one must have effective listening skills so that the
needs and preferences of people can be relevantly identified and provided for.
 Change is the major constant acknowledged to be pertaining to the corporate world, thus
sensing skills are essential to anticipate any kind of changes that are required to be
brought into the confines of company in order to ensure its long term sustainability.
 Apart from consumers, staff is also an essential stakeholder group for any corporation.
Thus, for practising effectiveness, a leader should have observation skills to gain
comprehensibility of the surroundings and business environment in order to ensure
increased productivity at work.
On the basis of the article “Managing Oneself” penned by Peter Drucker, it can be said
that a leadership should have adequate and relevant comprehensibility of one's own strengths,
values and traits in order to be effectively able to rate one's own performance (Managing
Oneself, 2005). The traits of a leader allow a person to have the understanding skills. This will
enhance the effectiveness of the leader. Further, it can be said that a good leader has a long chain
of followers. It becomes important for the leader to gain the comprehensibility of behaviour and
conduct of personnel working with him/her. This help the leader in identifying their strengths and
weaknesses and assigning them tasks within the entity accordingly. This will ensure growth and
long term sustainability of the enterprise.
In accordance with the article “What Only the CEO Can Do” penned by A.G Lafley, it
can be said that a person who intends to become an effective CEO should possess certain
essential traits and qualities. In this regard, they should have the ability to define as well as
perceive the meaningful outside, to respond to the line of business in which they operate, to
ensure an equilibrium between adequate yield in present time and required investment in
futuristic time (What Only the CEO Can Do, 2009). With the help of these, the individual would
be successful in ensuring success and growth of entity.
In accordance with the above mentioned basic fundamentals, the skills needed to lead
effectively in a global environment are as follows:
Management Skills: This is the skill which would allow the CEO to mould the
standards, practices and values of a company by being “the change”. As a CEO, the individual is
the most powerful within the company having the authority to lead or to mislead the staff.

Further, CEO should celebrate small wins of the organisation and reward the leaders (Morrison
and et. al., 2019).
Decision Making: This skill would enable the CEO to maintain a balance between
sufficient output at present and essential investment in future. This is possible by practising
innovative and creative thinking skills in order to prioritise the Triple Bottom Line (Lievens and
Chan, 2017). By exercising effective decision making skills, long term sustainability of firm can
be ensured.
Communication: This skill would enable the CEO to communicate within and outside
the organisational confines with the relevant application of marketing techniques enabling
development of healthy relations with customers.
Reasons behind not having required skills yet
As per the feedback gained from my seniors and peers, it has been evaluated that I do not
have these skills yet but in order to perform work at best level from my side I need to improve
this. The main reason behind not having this skill yet are mentioned below:
Management Skills: The main reason behind not having this skill yet is that I was not
assigned with team before and not yet get responsibility to handle people working under me.
Hence I won't get any change to learn the skill of management.
Decision Making: I never get any change of formulating decision over my work place
as company follows autocratic management practice where all the decision is taken by higher
authority.
Communication: I am not having this skill as the project for which I use to work follows
involves informal communication. Hence my formal communication is not good and my
interpersonal skills are also weak.
Thus, it is essential for me to enhance these skill areas so that my professional
development can take place in an effective manner.
Ways in them office colleagues from different cultures identified skill shortage
My office colleagues pertaining to diverse set of cultures view my identified skill
shortage as a shortcoming of my personality. Further, they regard it as an opportunity for me to
undertake certain effective activities with the help of which these can be effectively incorporated
within my personality to enhance the scope of my professional development.

The required skills sets/factors
As per the above analysis, it has been acknowledged that there are certain essential skills
or factors that are not present within the leader which act as constraint of international capacity
of office (Mendenhall and et. al., 2017). These skills are recognised to be the following:
Skill set/ factor Own Rating Rating received from others
Decision Making skills 7 6
Management skills 4 5
Communication skills 5 5
Thus, these are the skills that hold the potential to be enhanced for the betterment of
corporation as well as individual
Constraint regarding international capacity of office for next year’s professional
From the investigation perform over the skills and capability required for operating
business at international level the actual scenario in term of skills are found which are then rated
above. Through this it has been identified that the management and communication are the
weakest skills that may affect the development of company in following manner:
 At international level number of issues may be faced by team members that are required
to be managed properly as it may affect their performance and goodwill at large.
Ineffective management skills lead to inappropriate management and distribution of work
among workers that affect outcomes.
 While working at international level an office manager has to interact with several
suppliers, distributors or other stakeholders for having discussion regarding operational
activities. Ineffective communication skill may distract staff members from their process
of performing operations.

REFERENCES
Books and Journals
Brettel, M., Chomik, C. and Flatten, T. C., 2015. How organizational culture influences
innovativeness, proactiveness, and risk‐taking: Fostering entrepreneurial orientation in
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Mendenhall, M. E. and et. al., 2017. Global leadership: Research, practice, and development.
Routledge.
Morrison, G. R. and et. al., 2019. Designing effective instruction. Wiley.
Lievens, F. and Chan, D., 2017. Practical intelligence, emotional intelligence, and social
intelligence. In Handbook of employee selection (pp. 342-364). Routledge.
Jokinen, T., 2015. Global leadership competencies: a review and discussion. Journal of European
Industrial Training. 29(3). pp.199-216.
Alon, I. and Higgins, J. M., 2015. Global leadership success through emotional and cultural
intelligences. Business horizons. 48(6). pp.501-512.
Mendenhall, M. E. And et. al., 2017. Global leadership: Research, practice, and development.
Routledge.
De Vries, M. F. and Florent-Treacy, E., 2012. Global leadership from A to Z: Creating high
commitment organizations. Organizational dynamics. 30(4). pp.295-295.
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