Internationalization Strategy Framework for Charities
I was looking at some charities that I aspire to on the Charity Commission Website and realised many operate in more than one country and some are even in as many as 10+ in fact they can be classed as multinationals.
The Internationalisation Strategy Framework is a model that looks at a balance on how to internationalise an organisation’s activities.What new markets are available, what are the opportunities and how best to coordinate these activities.
As a Charity possibly with several Charity Shops or even as a non -profit organisationor a business You have to ask yourself .
1. What is our motivation thinking or rationale?
2.What are the potential risks and are they worth it.
3. How will we coordinate and organise these activities
I came up with a mnemonic: Motorised Presidential Convoy and a story to help with the memorising process.
Imagine yourself as a business or charity on the cusp of internationalising into foreign markets and you need to go on a trip to map out the landscape looking for potential opportunities and calculating potential risks. On landing at the said African state you find yourself being whisked away in a Motorised Presidential Convoy and are the subjected to all manners of frivolous activities, attending functions in your honour a banquet and included is a helicopter journey to scope the landscape on flying over some vast rivers you remark
“The Great Rivers Turn Murky!” (Another mnemonic, more on this later)
“Motorised, Presidential, Convoy”. The first letters of each work stand for:
Motivation, Thinking,Rationale. Potential Risk. Coordination, Organisation
1 Motivation,Thinking or Rationale?
As a Business exploring new opportunities or as a Charity is the motivation due to expansion within the company (Intrinsic)or is there an external objective such as disaster relief? (Extrinsic)
Is it for short term gain? (Tactical) or long term (Strategic)
2 The potential Risks and are they worth it.
One of the lesser known risks that Charities working on disaster relief are sometimes faced with is when dealing with refugee camps many times these camps are run by well- armed groups of marauding soldiers, mercenaries or self- proclaimed mafias, who control what food and supply can get in to the camp many of these despots demand a “tax” for entry. Now many Charities are faced with the question do we pay the bribe in order to offer support needed to the vulnerable inhabitants for example if there is signs of criminal activity, rape, abuse in the camp how else will it get reported?
However as far as the UK government is concerned Charities who pay this tax are in fact taking a bribe which means that the Charity commission is well within its right to close the Charity down. I did call the Charity commission to enquire why the Charity commission was being so inflexible but I only managed to get a stifled laugh on the end of the other line.
3 How do we coordinate and organise these activities.
Should the charity,company take a new range of activities? Known in business talk as a (large spread)
Or should it focus on a single operation (Focus)Should the costs of the new activities be organised as being part of a globally integrated company or as a local business. How will the coordination and communication be best employed and how about Integration? How well should be become integrated with the local community or markets?
Once you start to answer these questions. You will soon realise the tensions and trade- offs, however from answering these questions we derive 5 generic business models!
Here comes the second mnemonic: “The Great Rivers Turn Murky”
Trade Model, Global Model, Regional, Trans-national and Multi domestic models.
Let’s now look at the general primary motivation, secondary gain, motivation, the degree of coordination and integration for each of the models.
THE TRADE MODEL:
Primary motivation for these companies is intrinsic seeking easy combinations of products and services.
Secondary gainis usually Tactical always looking for opportunities and different markets and being able to respond to competitors.
Degree of Coordination.This business model requires little coordination as risks are usually linked to operational or financial costs.
Degree of integrationwill be spread thinly as they rarely ally with local stakeholders.
It is difficult to build a sustainable competitive position.
REGIONAL MODEL
Primary Motivation is mixed as they tend to cluster activities and organisations at a regional level.
Secondary gainis more strategic as they aspire to longer term competitive positions.
Degree of coordination and Degree of Integrationis mixed can be easier as activities can be clustered into regions but can become difficult as the individual organisation will be dependent upon the strength of each region.
MULTI DOMESTIC MODEL
The motivationhere is extrinsically driven. These companies are short term secondary gain is tactical Secondary Gainis opportunitydriven sometimes the result of local trade that grows into a permanent representation Degree of integrationwill be localised.
This model requires decentralisation therefore coordination is spreadand can be more difficult.
GLOBAL MODEL
The motivationis intrinsic they see opportunities in many local markets.
These companies are more strategic and long term driven.
There function is primarily to the Global Headquarters rather than the local markets. This makes them more efficient making coordination easier.
Degree of integrationwill be usually poor as local markets might not like or take the standardised products that Global companies usually offer.
TRANSNATIONAL MODEL
The motivation is mixed
They try to find a balance between Multi domestic model companies and global model companies.
Their primary motivationis local market opportunities.
Their secondary gain is strategicas they look towards longer term prescence in local markets.
Both coordination and integration will be focused and local
What is or are our primary motivations?As a charity,hopefully they will be tactical our secondary motivation or gain has to be strategic.
What is or are the potential risks?How many battles are we prepared to lose in order to win the war? I always recommend speaking to the Charity Commission and gaining invaluable advice.
And how do we optimise our Coordination and our organisation to meet both local and regional needs?
Even though the Internationalisation Strategy was developed along with Framework and businesses in Africa it can very easily be used elsewhere.
When your Charity, Company is ready for expansion to other countries you can start to put a structure around it by selecting one of the models mentioned this will allow for better and speedier coordination between the company and local partners as well as better integration and allowing for optimisation of scale.