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.