Managing business in the international business environment is quite daunting. The explanation for this observation is that there is a variation in factors of management in diverse business environments.
Different business environments have diverse business cultures that must be mastered and adhered to by any manager who wants to manage a business successfully in the environment (Luthans, Doh & Hodgetts, 2012). Several points can be attributed to the failure of Justin to sustain the performance of the company in the Asian Pacific region, in spite of having successfully steered the performance of the company in the United States.
One thing that comes out is that Justin has worked in the United States in his entire carrier and his appointment as the vice president of one of the divisions of the company in the Asian Pacific region was one of his international tasks in business management. This task involved managing in a different business culture from the business culture that he was used to. It should be noted that the United States business culture in which Justin came from is quite different from the business culture in the Asia Pacific region where Justin was posted.
Heading a new business venture in a new business environment is a comprehensive task. It entails the study and understanding of the models and attributes of management that are embraced in the new environment (Steers, Sánchez-Runde & Nardon, 2010). As soon as he entered the region, Justin implemented radical measures to turn around the performance of the company’s division in the region, just as he had done with the company’s division in the United States.
This was a radical action that only paid off in the short run as the company recorded an improvement in its performance in the first and second quarters under his tenure. The radical changes that were implemented by Justin did not match with the culture of management in the Asian Pacific region as it is later manifested in the dissatisfaction and demotivation of the employees of the company, resulting in an increased rate of employee turnover in the company.
The changes, which imply new strategies of management, can be termed as unsustainable due to their incompatibility with the managerial culture of the Asian Pacific region. Justin did not take time to learn and adjust to the new culture of management after he was appointed as the new vice president in charge of Compcorp’s division in the Asian Pacific region (Luthans, Doh & Hodgetts, 2012).
The changes in the management strategy, which implied the change in the culture and attributes of management in the new environment, could only work for a limited period of time. However, the employees later fell out with the strategy of management later after learning the difference in the style of leadership that was introduced by Justin and what they were used to.
This explains why the top managers in the organization’s division in the Asian Pacific region left, thereby creating a managerial vacuum in the company. The performance of the company could not be sustained.
What Compcorp ought to have done to enhance prospects for Justin’s successful performance
The failure of Justin in managing the company’s division can be partly blamed on the management of the mother company in the United States. The realization of the fact that managing in the international environment is complex warrants the attention of executives who seek to use expatriates in managing business. Companies are, thus, required to establish and enhance training programs on international management prior to the discharge of expatriates for foreign assignments (Luthans, Doh & Hodgetts, 2012).
The case of Justin and his appointment to head the company’s division in the Asian Pacific region is an example of the mistakes that are done by executives, which make it quite daunting for companies to thrive in foreign business environments. The management of the company was well aware that Justin had no experience of managing in a foreign business culture, despite having excelled in managing one of the company’s divisions in the United States.
Marx (2001) observed that most companies launch expatriate programs as part of the initiatives of dealing with the problem of cross-cultural management. Cross-cultural programs entail offering training and guiding employees or expatriates on how to approach and deal with the variations in the attributes of management in a foreign business culture.
Multi-cultural programs have become a common feature of management in multinational companies, most of which choose the hybrid system of management, just as was with Compcorp. Therefore, training was a critical element that could have been embraced by the management of Compcorp as part of embracing Justin’s knowledge on managing in the foreign business environment.
The other strategy that could have been used by the company is the embrace of indirect learning and adaptability by letting Justin to enter the Asian Pacific region on a lower rank so that he could learn the culture of management in the region before being promoted to the position of the vice president (Menipaz & Menipaz, 2011).
Managerial initiatives in international management
Prospects of management in a foreign business culture have to be captured by any person who wants to succeed in enhancing the performance of a company in a foreign business environment. The foreign business can present challenges, as well opportunities on which the management can rely on in enhancing the performance of a subsidiary firm in such an environment.
However, detecting and understanding the nature of challenges, as well as the opportunities that prevail in the foreign business environment requires deeper insight into the given business environment. Learning the trends of management and the culture that is embraced in the foreign business environment ought to be the first thing that should be given priority by an expatriate manager.
Expatriate managers have to establish workable relationships with the local staffs, who act as key resource persons in helping them learn about the desirable attributes of management in the foreign business environment (Marx, 2001). As it comes out in the case, Justin also stands to be blamed for his failure to succeed in managing the Compcorp division in the Asian Pacific region.
According to Menipaz and Menipaz (2011), expatriate managers under the hybrid strategy of managing in a foreign environment must learn from both the superior employees, as well as employees in the lower rank.
What is depicted in the case is that the employees of the company become dissatisfied with the style of management that was used by Justin. If Justin had taken time to consult from the managers on how to go about the managerial practices in the company, then he could not probably have faced the kind of problem that was witnessed in the organization.
References
Luthans, F., Doh, J. P., & Hodgetts, R. M. (2012). International management: Culture, strategy, and behavior. New York, NY: McGraw-Hill.
Marx, E. (2001). Breaking through culture shock: What you need to succeed in international business. London: Nicholas Brealey.
Menipaz, E., & Menipaz, A. (2011). International business: Theory and Practice. London: SAGE.
Steers, R. M., Sánchez-Runde, C., & Nardon, L. (2010). Management across cultures: Challenges and strategies. Cambridge: Cambridge University Press.