Essay on "International Management in This Course, We Base"

Essay 7 pages (2030 words) Sources: 0

[EXCERPT] . . . .

International Management

In this course, we base our study of international management on a contingency framework. This framework allows a systematic review of all the aspects and factors related to understanding management in a global economy.

The framework consists of several components. Describe each component and explain how the components relate to each other.

The contingency framework relies on the PESTEL model to define the external environment while the internal environment is comprised of the people who make up the organization. A core element of the contingency framework is the culture which is critically important for managing the overall stability and resiliency of the business. Within the cultural component is the definition of macro-structural and micro-structural components and considerations. Within each of these elements is the definition of specific job responsibilities and roles. The overall definition of these factors is highly dependent on how well an organization has also defined the workflows and processes to continually improving how employees are recruited, retained and invested in to grow the knowledge in the business. The framework's components explain why it is so critical for organizations to stay aligned with the cultural values of countries they operate in.

b. Since the external environment plays such a critical role in the contingency framework, management needs to cognizant of the PESTEL components. How do these components change when a business operates internationally?

The PESTEL framework changes significantly when a company operates globally in that each aspect is modified by the implications of the culture, ethics, legal system and monetary policy of a given nation. The legal factors, environmental factors, technological factors, social factors and economic factors all are impacted by a given nations' policies in each of these areas. The political factors will also have a very significant effect on any corporation looking to operate in a foreign country as the tariffs and controls sought will often be even more stringent than those for companies operating within their own country.

2. We talked about the definition of management, the managerial activities, and the managerial skills. We discussed that the field of management has its roots in the Anglo world. Please define management as discussed in class. What do managers do? Specify and explain the four managerial activities and the three specific skills to perform their responsibilities. Although we have not specifically addressed this question in our lecture, considering what you have learned so far in this course, what do you think is the relative importance of the three skills for an international manager? Provide a rationale for your answer.

Managers have the role of stabilizing a business and using systems and processes to ensure the continual operation of a business. Their four primary functions are planning, leading, organizing and controlling the overall performance of a business. The three specific skills they need to do their jobs are human relations, technical and conceptual skills. They also need to be able to intermediate across cultures. Based on the relative importance of these skills and the lessons learned in this course it is critical for managers to also see themselves from a global standpoint as well. A manager from the U.S. working in another country for example will need to be able to manage with cultural sensitivity and respect of cultural norms, values and artifacts if they are to be successful.

3. A critical challenge for companies that operate internationally results from differences in legal systems that countries use. Contrast the common law-based system of the United States with the code-based system used in most European countries. What are the important differences and their implications for international business?

These are very significant and have become increasingly important in the area of intellectual property. The major differences in common law vs. The code-based system are that common laws are defined by judicial process and written by judges upon hearing cases and defining precepts. The code of the law is based on the definition of laws and legal systems from the Roman Empire that are often interpreted by one specific country differently than another.

4. Today, businesses operate in a global economy. What does that mean?

a. How is this global economy different from previous economic systems? Summarize our systematic comparison of the global economic system to the economic conditions that existed before the fall of the Berlin wall. Make sure to include in your summary the need for entrepreneurship and innovation and the notion of creative destruction.

Globalization represents the continual integration of economic systems globally with a corresponding accelerating of company, system, services and product integration as well. The pace of globalization continues to accelerate, creating culture clashes across nations that have widely dissimilar cultural mindsets, values and norms.

Theorists illustrate how globalization has replaced the economic systems predicated on Cold War-based approaches to managing global growth. The fall of the Berlin Wall was symbolic of the opening up of previously-controlled economies that had been under tight control of central planners who held socialism and communism as the answer to creating sustaining value for citizens. The fall of the Berlin Wall signaled that centrally planned economies could no longer compete with free market economies on a global scale.

In conjunction with the fall of the Berlin Wall, 3rd world nations began investing heavily in the most critical assets open market economies value, which is infrastructure and a highly skilled workforce. The ascent of the BRIC nations (Brazil, Russia, India and China) is a direct result of the pace of globalization and the ability of countries to capitalize on it. As a result the BRIC nations are forecast to outpace the growth of traditionally strong western economies.

Another facet of globalizations; rapid growth has been the increasing pace of innovation with Information and Communication's Technologies (ICT). ICT has been a force that has brought greater cultural and business integration, interdependence, competition and homogenization culturally and from a business standpoint as well.

The convergence of all of these factors have become the foundation foo creative destruction in emerging and established markets, leading to an entirely new wave of innovation. Clayton Christensen's book The Innovator's Dilemma accurately portrays these factors and shows how creative destruction can cripple even the most formidable competitors in established markets. Creative destruction is a powerful force in the ICT markets globally today, as cloud computing and Software-as-a-Service (SaaS) are redefining the economics of software and entire value chains as a result.

b. The global economy is a free-market, capitalistic economic system that is created through the micro-level decisions that companies make. These decisions are based on the need for companies to make a profit. Explain! Consider the lecture on the reasons for companies' international expansion.

While there are many who claim globalization is driven by new market growth and expansion, the most prevalent factors in globalization are the continual search for talent and the need for new intellectual property to continually grow a business. Competing with new products in new markets is exceptionally challenging; bringing in expertise that is located in other nations is far easier and accelerates the sales success rate and product innovation in companies with far less risk.

The catalyst of global growth in free market economies is also based on the need for creating entirely new markets for products and services originally in other nations. In nearly every case of this strategy being successful however the marketers must align these products and services to the unique needs of a given market. The Hofstede Model of Cultural Dimensions is often used for defining these factors and charting overall market adoption throughout a given region or nation. Only by concentrating on these aspects of cultural variation can a business how to grow profitability.

While globalization and the quest for greater sales in free market economies worldwide are often discussed from the standpoint of cost reduction, they are in fact more oriented towards finding much-needed intellectual expertise to guide new products and processes. The globalization of markets is far more challenging and difficult than it appears, as products must be aligned to the specific needs of a market well enough to meet with skeptical buyers who see foreign goods as secondary to those produced in their own nations. The fact that ethnocentrism is so strong now due to globalization makes the tailoring of products to specific market needs critical for the overall growth of a business model on a worldwide scale.

5. As companies are expanding internationally they seem to go through several phases of development, resulting in different types of international companies.

a. Describe and explain the different types of international companies. What are the primary differences among them? Make sure to talk about differences in international orientation (ethnocentric etc.) and staffing strategies (PCNs etc.).

Throughout the course we covered the following types of international companies: multi-domestic; multinational; global / transnational. A multidomestic companies exports and imports products from other organizations in other countries with primarily domestic production. A multinational corporation has operations in multiple nations but each is viewed as relatively separate enterprise.… READ MORE

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