THIS LETTER WAS SENT AT FEBRUARY 1, 2011 - early in the morning Dear Colleagues!

! I;m sorry - technical delays with Internet. I'm not sure but may be my submission could be of interest fot the trak Supply Chain Management and Managing International Operations Thank you in any case best regards Vitaly Cherenkov Full name Vitaly I. Cherenkov Organization Graduate School of Management under St. Petersburg State University (www.gsom.pu.ru) Document Title Extended abstract Track - Supply Chain Management and Managing International Operations E-mail-address cherenkov_47@mail.ru cherenkov@gsom.pu.ru UNIFIED CLASSIFICATION OF INTERNATIONAL OPERATIONS: Theoretical Background and Applications Key words marketing exchange, international operation/logistics, unified classification Introduction Managing international operations is very important function of any business in the era of the total globalization as well as the university course to be delivered to future managers. The both statements above are closely tied due to the very simple condition before the international manager begins to fulfill the said function, he or she has to be taught, as minimum, in the frame of the said course. Having been involved for the last two decade in teaching international operations course as university professor or instructor as well as in consulting services in the field of international contracting and designing international operation schemes and logistics solutions as a freelancer consultant, the author has paid a lot of attention to elaborate the general approach to the array of international operations. There are next main aims of the work done in the light of this generalization. First, to define the general category, mutually benefit (or perceived as benefit) value-cost exchange, presented in all of international operations (leasing and management contract included a partial temporary). This aim reached is to help to order the array of international operations depending on impacts of significant dimensions of the global marketing environment (home, host, and international fractions included Fig. 1). These impacts force any

manager to design more and more sophisticated forms of international operations where risk and control are increasing on the way from importing and indirect exporting to foreign direct investments (FDI) or, in terms proposed, from traditional forms of international operations to transmutated ones (up to international leasing arrangements). Second, using this category, to acquire and filter by specific groups the array of international operations as a whole to classify them by method versus mode combinations permitted (Fig. 2). Third, to interpret international operations as coupling means necessary to connect different parts of international (global) supply chain combining mode and method of them in such a way to get to a trade-off between risk and profit. The unified classification table (Fig. 2) presented herein, supplied with the most appropriate subject of operation indicators (see the Legend to Fig. 2), could serve as a practical tool for students and international logistics managers beginning their carriers. Finally, the classification under consideration should be of use to get to improvements in structure/content of upcoming syllabi/text-books on international operations and logistics. Contemporary State of the Art In the most common way [Albaum et al., 7.2-7.3; Kotabe & Helsen, 547-550; Peng, 264267; ], exporting mode through domestic intermediaries or with help of a foreign agent only is defined as indirect exporting. It is regarded as a good mode of entry for the novice exporter. It does not require good knowledge of the target country trade infrastructure, nor does allow much control over the positioning products. Direct exporting mode, on the other hand, do require the exporter (manufacturer or its domestic middleman distributor or consignee) to establish a linkage to the first foreign market actor. The same approach dominates in Russian text-books on international operations. However, taking into account that method (e.g., by the Descartess Discourse on the Method) is defined as the rules by which our powers of intuition and deduction are guided in an orderly way, they could define each method of international operations as a well distinct set of rules, means, and techniques permitting the necessary international operations to be realized depending on significant dimensions of the global marketing environment (GME). The most developed, in my opinion, text-book or monograph on methods/modes of international operations [Welch], having roots in the earlier not well-known work [Luostarinen & Welsh], represents may be the best approach to the problem and has deal with theoretical considerations and essences extracted from practices in international business. However, some operations from the group Rent (operative and financial leasing) are not covered. Besides, well-spread exporting middlemen are, in my opinion, are rather scare described despite the fact of their key role in the indirect exporting, and consignment arrangements are not displayed. Good addendum for the book discussed above covering the sad lacunas could be in principle found in libraries/bookstores [e.g., Chow & Schoenbaum; Plenert]. Other manuals/text-books, reviewed by the author, are well-written and deeply specialized, each one discovering part of items of international operations from different viewpoints: juridical one [e.g., Schmitthoffs Export Trade] or focused on USA exporting practices [e.g., ]. The short overview made by the author has revealed that for BA/MA students is not so easy to collect necessary data to cover necessary systemized knowledge in the field of international operations/logistics. Authors experience in this field [Cherenkov] has acquired positive responses from students and is planned to be continued improving content and structure of the text-book just referenced using congeneric editions in English.

In brief, the said text-book is arranged in accordance with the following suggestions. Due to the fact any international operation embrace (present or future, direct or indirect) stimulus to exchange the value offered by the seller for money (or monetary substitute) of the buyer under condition of (perceived) mutual benefit, the unified classification of international operation (Fig. 2) is presented as a set of four groups of methods (in terms of Welch et al.) arranged as rows combined with a set of seven modes (in our terms) arranged as columns. Methods of international operations: Traditional methods of the PRODUCT group products are made in a home country and are delivered to a host country (exporting, re-exporting) and vice versus (importing, re-importing). Transmutated methods of the KNOW-HOW group obstacles with delivering (tariff, nontariff, and logistics barriers) force an exporter to move from product selling to idea of product/business selling (foreign assembling, international licensing, franchising, engineering, foreign manufacturing contracts) the FDI group to get to more higher levels of control an exporter is arranging manufacturing/marketing activities in a host country up to creating 100% industrial property abroad (FDI) the RENT group temporary compensated movement of means of production (operative or financial leasing) or personified managerial know-how (management contracts)

Modes of international operations understood as a set of means of commercial exchanges between market actors from home and host countries are proposed to be split into seven items four basic ones and seven modified ones. Setting the latter apart is conditioned by specific of pricing (e.g., commodity exchange), using simple or combined money substitutes as means of payment (countertrading) or e-commerce. Therefore, they are (words in italics are to highline specifics of modes): basic modes 1) direct exporting, coop exporting (e.g., piggybacking), 3) own or intracorporative exporting, 4) indirect exporting; modified modes 5) countertrading, 6) institutionally-competitive mode (commodity exchange, auction, tender), 7) e-commerce.

Conclusions The author expects the said classification system has all necessary system features and could be of use for better understanding international operations/logistics to make better corresponding solutions, improving manuals/text-books and syllabi, and producing systemic and creative thinking of students/managers. References Albaum, G., Duerr, E., Strandskov, J. International Marketing and Export Management, Financial TimesPrentice-Hall, Harlow, England, etc., 2005 Cherenkov, V.I. International Business: Main Operations, Phoenix Publishing House, Rostov-on-Don, 2007.

Chow, D.C.K., Schoenbaum, T.J. International Business Transactions: Problems, Cases, and Materials, Aspen Publishers, New York, 2005. Kotabe, M., Helsen, K. Global Marketing Management, John Wiley & Sons, New York, etc., 2000 Luostarinen R., Welsh, L. International Business Operations, Helsinki School of Economics, Helsinki, 1993. Nelson, C.A. Import/Export: How to Get Started in International Trade, McGraw-Hill, Inc., New York, etc., 2000. Peng, M.W. Global Business, South-Western Cengage Learning, Australia, etc., 2009. Plenert, G.P. International Operations Management, Copenhagen Business School Press, Copenhagen, 2002. Schmitthoffs Export Trade: The Law and Practice of International Trade by Murray, C., Holloway, D., Timson-Hunt, D., Sweet Maxwell, Thomson Reuter, London, 2009. Welch, L.S., Benito, G.R.G., Petersen, B.: Foreign Operation Methods: Analysis, Strategy, and Dynamics: Edward Elgar, London.

Illustrations
INTERNATIONAL FRACTION OF THE GLOBAL MARKETING ENVIRONMENT (GME) HOME FRACTION OF GME HOST FRACTION OF GME

Marketing Dimensions
HOME EXPORTER

Marketing Dimensions

Marketing Dimensions
HOST IMPORTER

RISKS RISKS RISKS

ARM OF GLOBAL SUPPLY CHAIN [Contractual Coupling]

Fig.1. Superposition of impacts on an arm of global supply chain from different fractions of the global marketing environment

Modes of International Operations: InstitutionallyCompetitive Countertrading Methods of International Operations: Direct Groups Indirect ECommerce

Cooperative Own or Intracorporative 1, 2A, 5, 6

Importing Exporting PRODUCT

1, 2A, 4, 5, 6, 7 CE: 1B, 1C A: 1B, 1C T: 1A, 1B, 3 CE: 1B, 1C A: 1B, 1C T: 1A, 1B, 3 7 7 3

Engineering* Manufacturing Contract* Contractual Joint Venture* Equity Joint Venture * Subcidiary* Branch* Strategic Alliance* Operation Leasing* Financial Leasing * Management Contract*

KNOW HOW

Assembling* Licensing* Franchising*

1 1A, 1B, 2A, 2B, 3, 4 1A, 1B, 1, 2A, 2B, 3, 4 1B, 2 1, 2, 3, 4, 5, 6

1 1

1, 2 1, 2, 3, 4, 5, 6 7

FOREIGN DIRECT INVESTMENTS *

RENT*

1 1 2B, 4

1A, 2

Fig.2. Unified classification (methods-forms-subjects) of international operations(See LEGEND below)

LEGEND to Fig.2.: Main types of subjects of international operations Goods; a. Machinery & equipment; b. Raw materials & semi-products; c. Final products; 2. technological knowledge, intellectual properties, marketing/management knowledge; a. Documentary form (e.g., patents, know how, trademarks, copyrights); b. Personified forms (e.g., contracted managers/specialists); 3. consulting/construction engineering; 4. marketing services. 5. consumer services; 6. touristic/hospitality services; 7. virtual products (e.g., soft) & services (e.g., consulting, training, and entertainments). * - international CE commodity exchange A auction T - tender 1.