The difference between international and global corporations is essential to consider in the business environment. While an international corporation is defined as a company that operates in at least two different countries, a global corporation is involved in the market of several world countries (Abraham, 2012). In addition, international corporations are typically controlled by domestic companies which distribute their products abroad. Contrastingly, a global corporation is originally established as a firm that will compete in the global market and manage its representations in multiple states (Abraham, 2012). Such involvement requires a significantly better-developed organizational system and increased resources to ensure prosperity.
Two international strategies that a corporation’s executives can implement are exporting and strategic alliances. Exporting is a method that does not demand the company’s immediate presence and can be conducted through shipping and distribution (Abraham, 2012). Strategic alliances, on the other hand, are a type of international expansion that facilitates a partnership between a domestic enterprise and a local firm (He et al., 2020).
Exporting is beneficial due to the opportunity to establish international operations without creating a local representation, which is valuable in standardized manufacturing industries, namely clothing, food, and metal production (Fitjar & Jøsendal, 2016). However, if a distributed product is unique or the local market is challenging to enter, the executives are more likely to choose a strategic alliance to mediate possible risks (Fitjar & Jøsendal, 2016). This is often evident in the automobile, technology, and chemical industries.
Nevertheless, during international expansion, it is also crucial to consider cultural and ethical values. First of all, the organization must ensure the fulfillment of ethical requirements, which might delay the integration to resolve possible issues. Secondly, as the company must maintain its corporate social responsibility (CSR), it might encounter legal business obstacles or social predispositions. For example, in the case of exporting, the corporation must make sure that the distributor behaves ethically toward the community and that the exporting process will not be hazardous to the environment (Dewhirst et al., 2016).
In the case of strategic alliances, the executives should respect the ethical values and beliefs of the local partner (He et al., 2020). From this perspective, while exporting demands a strategic evaluation of possible scenarios that could emerge after the expansion, a strategic alliance necessitates flexible strategic planning to adapt to the local partner’s requirements.
References
Abraham, S. C. (2012). Strategic management for organizations. Bridgepoint Education.
Dewhirst, T., Lee, W. B., Fong, G. T., & Ling, P. M. (2016). Exporting an inherently harmful product: The marketing of Virginia Slims cigarettes in the United States, Japan, and Korea. Journal of Business Ethics, 139(1), 161–181. Web.
Fitjar, R. D., & Jøsendal, K. (2016). Hooked up to the international artistic community: External linkages, absorptive capacity and exporting by small creative firms. Creative Industries Journal, 9(1), 29–46. Web.
He, Q., Meadows, M., Angwin, D., Gomes, E., & Child, J. (2020). Strategic alliance research in the era of digital transformation: Perspectives on future research. British Journal of Management, 31(3), 589–617. Web.