Managing International Operations

International Production Strategies

The scope of international production (operations) strategies includes the following:

– conducting capacity-planning studies to produce output satisfying demand;

– performing facilities-location planning for identifying optimal locations after considering the cost-benefit analysis;

– determining the location of operations decisions, whether it is centralized or decentralized;

– deciding on production-process planning, whether it is making standardized or customized products;

– performing facility-layout planning to locate machines, materials, and departments;

– conducting quality planning to comply with total quality management (TQM) principles and international standards organization (ISO) 9000 supplier certification standards; and

– making invest-reinvest-divest decisions in manufacturing, retail, office, and warehouse facilities after considering political, legal, economic, and social risks in the host country.

International Acquisition of Materials

This includes evaluating make-or-buy decisions for raw materials, parts, and components; making in-sourcing and outsourcing decisions for raw materials, parts, and components; deciding on quantity and quality of raw materials acquired either from local or outside sources; and making fixed-asset decisions in acquiring plant, property, and equipment from either local or outside sources.

International Logistics

The scope of international logistics includes shipping costs by air, sea, or ground to transport raw materials and finished goods in and out of the host country; and keeping inventories at a minimum level using just-in-time (JIT) philosophy in manufacturing.

International Staffing Policies

The scope of international staffing policies includes deciding who fits best to the job at hand. These staffing policies should be aligned with the MNC models of organizational structures.

An ethnocentric staffing policy states that the home-country nationals should be employed in international operations in the host country.

polycentric staffing policy states that the host-country nationals should be employed in international operations in the host country.

geocentric staffing policy states that the best-qualified individuals worldwide should be employed in the international operations in the host country. This policy usually applies to senior-level managers, who may come from the home country, from the host country, or from a third country.

Most of labor-management relations are the same between the home country and the host country, except for cultural differences and political influences in the host country.

[Optional] Global Staffing Approaches
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