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- Introduction
- A definition of internationalisation
- Why should you internationalise?
- Does everyone benefit from internationalisation?
- Which are the main reasons why voluntary organisations internationalise?
- Building strategic partnerships
- Different examples of internationalised voluntary organisations
- Explaining benefits and risks of internationalisation
- Conducting a SWOT analysis
- Deciding which countries to go to
- Multidomestic strategy
- Global Strategy
- Transnational Strategy
- Comparative analysis
- Quiz
- External resources
Explaining benefits and risks of internationalisation
In the learning unit 1 “Defining Internationalisation” we discussed this phenomenon and defined it as the result of the implementation of several different strategies which take into account the resources and capacities of the given organisation/enterprise, as well as its own opportunities (and threats) in its international setting, with the objective of moving its activity, either totally or partially, to that international setting, generating different kinds of flows (knowledge, resources, financial…) between the countries involved. Or or, in other words, to go global.
Globalization is one of the most important terms when talking about internationalisation, as it can be seen as both cause and effect of internationalisation itself, and thus generally share most of its benefits, risks and flaws. Globalisation brought developing countries the chance to access foreign markets as well as to import and export cheap goods, enhancing economic development through competition and a worldwide market, and increasing the flow of information between countries.
Image by Jan Vašek from Pixabay
Focusing on internationalisation, as we discussed in previous units, the main benefits can be summarized as the following: internationalisation helps your organisation togain visibility internationally, increasing the awareness of the specific topic attached by your organisation. It also increases the number of potential donors and their engagement with the purpose of the organization, its impact (reaching out to more people needing your work in other countries of your international setting) and the potential income of funds and other resources. It helps your organisation to get to know others with similar or related purposes (creating your own network), and thus gaining access to collaborations, acquiring prestige and international recognition in the process. Economically, it helps to reduce costs and to obtain greater profitability of the use of those funds and resources.
However, with internationalisation also come several risks that have to be taken into account in order to succeed in the process. Regarding the organisational strategy needed to take your activity into another country, a lot of risks can appear: Firstly, the funding forecasted for that project (which, by itself, implies an increase in costs for your organisation) can be wrongly calculated, incurring unbearable unexpected costs. On the other hand, the procedures or way of work of your organisation can lack adaptation to this new country, as well as its policies, laws and culture. You will incur extra costs when sending people from your organisation to the new country and when researching possibilities of collaboration In general, the costs of management of your organisation will increase exponentially.
Concerning the management of the projects conducted in other countries, your organisation has to be ready to simultaneously bear different situations in different countries, and channels of communication have to be improved and used regularly. Also, it is crucial to be successful when finding partners in that country, enhancing your relations with them and creating effective alliances with some of them. Another crucial aspect is when facing the cultural, political and legal differences between countries. Tax policies may vary substantially, as well as political and economic stability of the destination country. And all of this without taking into account the language and cultural barrier.
We can summarize all this information in the following table, presenting in a visual approach the main benefits and risks of internationalisation: