A firm or organization can manage its foreign economic activity using six main management functions:
1. Planning – drawing up short-, medium-term and long-term plans for the development of foreign economic activity, as well as developing business plans for new foreign economic projects
2. Organization – creation (formation) of organizational units of the company for the implementation of foreign economic operations, distribution of employees to areas of work, endowing them with appropriate functions, powers and responsibilities, determining the forms and methods of preparation and implementation of foreign economic relations
3. Coordination and coordination of tasks and functions of foreign economic activity with other departments and subdivisions of the company in order to prevent contradictions in decisions and ensure coherence and optimization of all work
4. Accounting for the results and assessment of the effectiveness of foreign economic activity by determining the profitability of foreign economic transactions separately for specific types of goods for the entire range of products, by region, by type of operations (export / import), etc.
5. Control of foreign economic operations (both in operational and strategic modes – current monitoring of the implementation and control over the implementation of annual, medium-term and long-term plans of foreign economic activity and organization of appropriate audits to implement foreign economic and marketing strategies
6. Providing an information system for servicing the foreign economic activity of the company through the introduction of management information systems, using the Internet, etc. to create a data bank of foreign economic information. Currently, a number of management information systems are successfully used for these purposes, such as MIS – Management Information System, DSS – Decision Support System, MDSS – Marketing Decision Support System, MSM – Market Selection Model, etc.
Along with the main management functions, it is possible to distinguish specific functions of managing the foreign economic activity of the enterprise:
1. Analytical, which involves the study of the international market environment, the conjuncture of individual foreign markets, offers / requests of consumers of foreign market segments.
2. Commodity-production – improvement and adaptation of goods to the conditions of local markets.
3. Sales, involving the organization of a sales network abroad for the promotion of goods for export.
4. Implementation of a certain pricing policy, advertising work in foreign markets, etc.
Organization of foreign economic services of the enterprise
Foreign economic services of the enterprise are built on two levels:
higher – in the form of central services for the strategic management of foreign economic activity; grassroots – in the form of operational work departments.
In the practice of organizing foreign economic services of an enterprise, there are five main types of construction structures. The following structures of a linear-functional nature are characteristic of the grassroots level:
1. By types (functions) of foreign economic activity.
As a rule, such a structure is available to small firms operating with a narrow product range in a small number of foreign markets and their segments, which are distinguished by a certain homogeneity, stability and insignificant capacity.
Such a structure is suitable for firms producing standard, non-individualized goods that do not require significant modification depending on the different demands placed on them in different foreign markets, and are also not the object of active influence of scientific and technological progress, etc.
The disadvantages of such structures are as follows:
the lack of special units by type of goods, which complicates the management of the process of developing a new product, slows down innovation; the lack of special units for foreign markets, which leads to a slowdown in the response to changes in demand in foreign markets; complication of solving issues of financing foreign economic activity of the enterprise as a whole and individual foreign economic projects.
2. According to the commodity-industry principle.
Such a structure is available to firms that produce and / or export a wide range of products with different manufacturing technologies, a short life cycle, with a significant degree of innovation. They tend to specialize in a small number of dynamically developing foreign markets of a homogeneous nature.
The disadvantages of this structure include:
excessive technological orientation of the company when supplying goods abroad; difficulties in finding and entering new markets; the complexity of a comprehensive regional policy; weighting of the structure due to numerous commodity departments; weakening of coordination linkages by function, duplication and undue fragmentation; complication of overall strategic management.
3. On a geographical basis.
Such a structure is most common in the organization of foreign economic activity of the company. It allows you to coordinate and differentiate the market strategy of the company, to achieve a sensitive response to changes in the environment and the nature of demand in foreign markets and to adapt the goods supplied to them in a timely manner. Such a structure is suitable for firms selling homogeneous goods with homogeneous requirements from consumers in different foreign markets, capable of mutually replacing and/ or complementing each other. The goods of these firms should not be subject to sharp fluctuations in market conditions, especially demand for it, and differ in the seasonality of sales. They must be sold through a wide marketing network of intermediaries.
Among the disadvantages of such a structure are the following:
decentralization and duplication of a number of functions in management; reduction of coordination of foreign economic work on goods and functions; lack of sales efficiency for knowledge-intensive goods and services of the company abroad.
4. By consumer groups or market segments.
Such a structure is designed to meet the requirements of individualized groups of end users, increasing the degree of their service, ensuring the long-term relationships with partners and optimizing profits.
5. The matrix structure of the construction is more related to the construction of central services for the management of foreign economic activity. Its main disadvantages are inertia and conservatism in decision-making, inability to ensure mobile adaptation to the new conditions of functioning of foreign markets.
As a rule, in practice, there is a combination of different types of structures and the formation of unique, original management structures of the company.
When building the management structure of the company’s foreign economic activity, it is necessary to comply with the following principles of organizational optimization:
1. Flexibility, mobility and adaptability of the system of organization of foreign economic activity (for example, the creation of temporary creative teams to perform a specific task, project, etc.)
2. Relative simplicity of structure (no duplication of functions)
3. Compliance with the specifics of the product range
4. Compliance with the specifics of foreign markets.