Domestic organizations are organizations that essentially operate within a single country. These organizations normally not only acquire necessary resources within a single country but also sell their goods or services within that same country. Although domestic organizations may occasionally make an international sale or acquire some needed resource from a foreign supplier, the overwhelming bulk of their business activity takes place within the country where they are based.

Although inclusion in this category is not determined by size, most domestic organizations today are quite small. Even small business organizations, however, are following the trend and becoming increasingly involved in the international arena.

International organizations are organizations that are based primarily within a single country but that have continuing, meaningful international transactions—such as making sales and purchasing materials—in other countries. Nu Horizons is an example of a small company that can be classified as an international organization. This distributor of electronic goods made mainly by some 40 U.S. manufacturers has about 5,000 customers and is the fastest-growing company in Melville, New York. Nu Horizons is considered an international organization because an important part of its business is to act as the primary North American distributor of electronic components made by Japan’s NIC Components Corp.¹⁶ In 2010, Nu Horizons was acquired by Arrow Electronics, in part because of its global reach.¹⁷

In summary, international organizations are more extensively involved in the international arena than are domestic organizations but are less involved than either multinational or transnational organizations.

The multinational organization, commonly called the multinational corporation (MNC), represents the third level of international involvement. This section of the text defines the multinational corporation, discusses the complexities involved in managing such a corporation, describes the risks associated with its operations, explores the diversity of the multinational workforce, and explains how the major management functions relate to managing the multinational corporation.