Assignment 5 Momin

Australia
1. What are some current issues facing Australia? What is the climate for doing
business in Australia today?
Australia is a nation, like elsewhere in the world, experiencing both social and
economic changes. The impact on the social structure has been significant. There
have been thoughtful changes to the health, welfare, and education systems in the
country, and major challenges to the basic idea in social organization. Australia is
also suffering from ascending interest rates due to high economic growth. The
cost of borrowing has increased dramatically and has tended to force many
Australian's to stop spending. In addition to high interest rates, inflated prices
mainly in real estate are noticeable. Australia also is located far off from many of
the mainland MNCs, which leaves them in a state of seclusion. Not to mention,
the Ausies’ way of living is very laid back, unlike most cultures of the world.
Lastly, Australian dollar is a very high dollar compared with the US dollar. This
can lead to a number of economic problems such as decreased tourism,
investment, and exports becoming less attractive to the world. The climate of
doing business in Australia has its pros and cons. First, the high standard of
existing, modern telecommunications and shipping networks, broad investment
opportunities, and usually well educated and trained workforce all contribute
towards making Australia potentially a very rewarding place in which to do
business. In addition, the fact that Australia is in a very important location to
access developing Asian markets makes it even more appealing for MNCs.
However, on the down side, the corporate taxation rates are very high for MNCs,
and the nation's Controlled Foreign Corporation legislation is excessively
restrictive. For this Chicago MNC looking to do business in Australia, they might
be in the right track. The increasing demand for financial services over the past
decade can really make this firm stand out if they decided to operate in Australia.
2. What type of organizational structure arrangement is the MNC going to use
in setting up its Australian operation?
The MNC will use the International Division Structure as an organizational
structure to set up the operation. The International Division handles all of the
international operations. A unit is added on to deal with international issues, while
the original organizational structure stays the same. This organizational structure
is useful and helps the CEO by monitoring operations in Australia. Rather than
having the CEO in Chicago making decisions, the new head of the international
division will coordinate and monitor overseas activities and will report directly to
the CEO on the matters.
3. Can this MNC benefit from any of the new organizational arrangements,
such as a joint venture, the Japanese concept of keiretsu, or electronic
networks?
The Chicago MNC can benefit from electronic freelancers by performing key
tasks for them. Many MNCs are realizing that outsourcing can be delivered
online. It can help the company because the Chicago office iscapable of
maintaining control of their business online. They can also benefit from e-lancers
through analytical computations, consulting reports, and the achievements of the
company in Australia. The Chicago MNC might also benefit from an international
joint venture. These are composed of two or more firms from different countries.
Joint ventures can take a number of different forms, including cross-marketing
arrangements, technology-sharing agreements, production-contracting deals, and
equity agreements. This can help the MNC in Australia because it is one of the
largest countries, and can help the firm reach its goals. For example, if the MNC
tries to create a joint venture with a firm that already knows what the people in
each region want and like, they are able to create a successful business for both
parties, benefiting all sides. A few MNCs are trying to integrate their services in
Australia, and they are mostly from British nations, since Australia is home to a
majority population of British decent. This would be an excellent opportunity for
the MNC to try to reach an agreement with one of these firms that are also trying
to tap into the Australian market.
4. Will this operation be basically centralized or decentralized?
The operation will be basically decentralized. Decentralized organizational
structures usually have several individuals responsible for making business
decisions and running the business. Decentralized organizations rely on a team
environment at different levels in the business. Individuals at each level in the
business might have some independence to make business decisions, rather than
relying on other to take care of the matters they are in charge of. The MNC is
geared more toward a decentralized operation because Australia is such a large
country, and because of the “free spirit” cultural identity the Ausies hold. The
home office is compelled to give the manager in Australian operations full control
over decision-making. This manager will have a small number of senior-level

managers from the United States, but he will hire the rest of the personnel locally.
The office in Australia will be given sales and profit goals, but specific strategy
will be left to the manager and his or her main assistants on-site.

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Australia

business in Australia today?

Australian's to stop spending. In addition to high interest rates, inflated prices

can lead to a number of economic problems such as decreased tourism,

existing, modern telecommunications and shipping networks, broad investment

towards making Australia potentially a very rewarding place in which to do

business. In addition, the fact that Australia is in a very important location to

2. What type of organizational structure arrangement is the MNC going to use

in setting up its Australian operation?

The MNC will use the International Division Structure as an organizational

international operations. A unit is added on to deal with international issues, while

the CEO on the matters.

such as a joint venture, the Japanese concept of keiretsu, or electronic

through analytical computations, consulting reports, and the achievements of the

Joint ventures can take a number of different forms, including cross-marketing

arrangements, technology-sharing agreements, production-contracting deals, and

majority population of British decent. This would be an excellent opportunity for

to tap into the Australian market.

4. Will this operation be basically centralized or decentralized?

The operation will be basically decentralized. Decentralized organizational

structures usually have several individuals responsible for making business

decisions and running the business. Decentralized organizations rely on a team

environment at different levels in the business. Individuals at each level in the

geared more toward a decentralized operation because Australia is such a large

over decision-making. This manager will have a small number of senior-level

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