Introduction
The current global business platform comprises of competitive merchants; all of which implement varied policies and strategies in a bid to not only get clients but keep them too. Quite a number of business institutions are faced with tough setbacks that require only rational and unequivocal decisions to put them at the helm of business success.
There are numerous business-related drawbacks that must be handled with a lot of expertise and precision in order to achieve organizational goals. For this reason, it is imperative that individuals charged with the responsibility of setting business policies and strategies are highly specialized and experienced in this competitive field.
This paper is meant to give a distinctive outline of practical and theoretical underlying principles for global commerce plans. Additionally, the paper is aimed at identifying the most outstanding cultural factors that play an imperative role in influencing certain global business decisions.
Also included in this paper is a comprehensive discussion of theories of international strategic business management that are aimed at defining, administering, and coming up with an internationally acceptable and viable business. All the subjects of discussion in this paper are inclined towards social innovation as a mode of revolutionizing international business as respective markets keep changing day by day.
The basic cultural factors that influence international strategic business resolutions
Culture has been defined in different ways, but the most understandable definition is that it is the sum of all factors that typify the human population. These factors may include norms, beliefs, artifacts or even procedures of carrying out activities.
Some people have also described culture as the joint programming of the human brain. Culture is formed on the basis of interaction and socialization of members of a given locality or society. This form of interaction gives rise to quite a number of influences. In this context, business-related influences, brought about by cultural interaction, will form the subject of this discussion (Becker, 2009).
There are quite a number of basic cultural factors that are known to influence international strategic business choices. In individual companies, for instance, managers that come from different and perhaps foreign companies have to bear in mind that the native employees may need varied organizational structures including management policies and strategies (Trompenaars, 2004).
This comes as a result of the obviously different cultures of the employees. In order to register prosperity and success, the managers ought to implement policies and strategies that conform to the norms and traditions or belief of the native employees (Rosenhauer, 2009).
Cross-border business relationships are often affected by the different customs of the parties involved. These joint ventures or client-provider relationships are bound to require a compromise in one another’s culture. Additionally, firms that need to do business with foreign customers need severe cultural adaptations in order to enhance their marketing strategies and service-delivery procedures.
Given the fact that the populace in different regions of the globe adopts varied cultures depending on geographical locations, cultural activities form part and parcel of the people’s lives hence becoming barriers to some business relationships.
The manner in which entrepreneurs from different cultures communicate in the process of making business related negotiations has a great influence on international business. This is because each party applies his or her own policies and strategies as dictated by their cultures.
In some occasions, such negotiations barely come to an understanding because of vast cultural variations. Ways in which such merchants engage themselves in business and the amount of time they dedicate to their business may vary too depending on cultural norms (Mitchell, 2008).
Body languages on international business platforms aim at enhancing the manner in which business partners communicate and how both parties understand one another. It is important to note that there are a number of business gestures used in certain geographical locations; most of which are very different form the ones used in other locations.
In the event that parties from these different geographical positions come together to do business, their business gestures are bound to clash. For instance, a sign of good will in one location could have a totally different meaning in the next location.
In the event that either party uses this during or after their business relationship, the other party is bound to have a totally unintended interpretation of the gesture (Trompenaars, 2004). A distinctive example is the use of some business gestures like uncomfortable smiles which could amount to huge losses especially if one party feels that it is positive to use the gesture while the other find it uncouth and provocative.
Another typical example of gestural clashes in business is in the nodding of the head. It is important to note that nodding one’s head, in some cultures, is meant to portray agreement while others nod their heads as a sign of disagreement.
Two parties from these diverse cultures may be brought together by a business deal and when either party nods his or her head, he may be agreeing while his counterpart may interpret that as a disagreement. This is bound to bring about unintended breakage of business deals and sometimes ruin future business relationships.
Variations in social circumstances and religion influence the perceptions that clients have on some products and their trends of purchase. For instance, Christianity and Islam are two diverse religions whose believers consume different products and embrace different diets.
This affects international business decisions in the sense that companies that thrive well in places occupied by one religion would not do any better in regions whose dwellers belong to the other religion.
The most affected set of companies in this context are franchised organizations that produce products that may either be discriminatory or provocative to one religion, even though they could be embraced perfectly with the other religion. Franchised hotel industries are good examples of business institutions that may be grossly affected by religious beliefs that do not concur with the consumption of some food products.
Typically, franchised hotels are supposed to provide standard and sometimes similar menus, but there are no restrictions at all of the locations in which there are preferred. It is natural to find that one franchised hotel is thriving in a certain location because the religion of the dwellers around it supports the consumption of food it prepares.
The same concept may, however, not have the same good outcomes when used in regions with people who embrace a different religion that does not support the consumption of the same food products produced in the outlet. In the event that this happens, managers are bound to make rational business decisions (some of which may include altering the menus) in a bid to realize organizational goals (Mitchell, 2008).
Apart from the religious restrictions, dietary needs of different cultures may also play an imperative role in influencing the menus of franchised hotel industries. It is important to note that different cultures are used to diverse diets and would need to keep them through whatever cost.
For this reason, franchised international hotel industries that need to make profits are bound to alter their menus or recipes in order to offer food products that are locally acceptable by the native population. In the event that this is not done, such international businesses may experience adverse losses since their food products would not be what the available market demands (Trompenaars, 2004).
In conclusion, the mentioned cultural determinants have given an unequivocal outline of the manner in which the diversity of cultures may play an imperative role in international strategic decisions as far as global business is concerned. Managers in different global business platforms should, therefore, put into strict consideration cultural factors while formulating their future plans and strategies.
They should incorporate cultural diversity in their human resource departments so that employees are accommodated in their systems inconsiderate of their cultural variance. It is only through this that international businesses may be able to register the expected profit margins as forecasted in their organizational shot term and long term goals (Mitchell, 2008).
Concepts of international strategic management and their developmental, definitive and administrative roles in structuring international businesses
Global strategic management actions are geared towards equipping businesses with the tools to capitalize on lucrative but competitive prospects. The uniqueness of the nationwide corporations and interrupted demands play an important role in assisting stakeholders and managers assign resources and technique to protract and advance their businesses.
This part of the paper is meant to highlight concise clarifications of the most fundamental techniques and perceptions of strategic management and the manner in which they are relevant to the developmental, definitive and administrative roles played in structuring international businesses.
It explains quite a number of concerns as far as global businesses need to be structured and managed in order to realize their departmental and overall institutional objectives. The concepts have been vividly clarified by the use of cited examples (Culpan, 2004).
Global tactical supervision may be defined as a collection of internationally recognized supervisory choices, actions and resolutions that are geared towards determining both the long term and short term objectives of a business establishment.
This form of management incorporates quite a number of factors including environmental scanning, policy statement and implementation, strategy formulation and evaluation of other factors that play a part in the running of a corporation (John, & Allen, 2008).
Environmental scanning
This is one of the strategic business management concepts that involve the valuation of both internal and external prospects and dangers that could influence organizational operations. External environmental factors incorporate the threats and business opportunities available in the competitive market (Mun, 2009).
This needs specialized scrutiny by managers in order to come up with comprehensive strategies and policies to counter the threats and get the most out of the available opportunities. Internal factors, on the other hand, involve organizational weaknesses and strengths.
These are forces within the corporation that have either positive or negative influences on organizational long term and short term aims. These too need highly specialized decisions from skilled and experienced managers.
Strategy formulation
This is the preparation of plans that pave way for the proper harnessing of external environmental opportunities in order to maximize on the profit margins. It incorporates the strategies put in place by managers to have an upper hand in the available market as compared to competitors.
Managers must, therefore, evaluate the external environment comprehensively in order to determine viable plans that could see them through to organizational success. Aside from the available opportunities, strategy formulation also involves the evaluation of prospective business threats. This may be gotten from past experiences or past data collected by similar organizations.
Since threats may derail organizational goals if not well managed, the decision makers of an institution ought to analyze the external environment and pin-point possible risks. This should then be followed by explicit evaluation of the threats to guide in the formation of possible plans to counter them (Lorange, & Contractor, 2004).
Tactical decision making
This deals with the security of organizational future and features three characteristics:
- Rare decisions: these come once in a while and do not have any form of precedent that needs strict observation.
- Consequential decisions: these decisions are meant to commit considerable organizational resources. They require a lot of commitment due to their complexity.
- Directive decisions: these, unlike rare decisions, are a collection of precedents. They involve low magnitude decisions aimed at securing the future of the organization involved through certain actions that need to be taken.
Strategic decision making needs a clear mind since the effects of decisions made could be felt up to a decade later (Verbeke, 2008). This, therefore, shows the importance of making rational decisions in matters of great weight like business blueprints, policies and proposals.
Here are steps of strategic decision-making which can act as a good outline for managers:
- Evaluate the present outcomes of organizational performance
- Reassess the corporate governance
- Scrutinize the external environment
- Go through the SWOT factors and come up with comprehensive analyses of each
- Establish the most practical and dependable substitute strategy from the analyses of the SWOT factors
- Formulate a platform for the implementation of the established strategies
- Evaluate each and every strategy that is implemented (Jansson, 2008).
Hypothetical and realistic involved in international business activities
The society today is comprised of theoretical ambitions and practical achievements especially in the business arena. It is important to note that humans are both doers and thinkers at the same time. However, these two activities are distinct and totally incomparable.
The action of thinking is guided by human reflections of the mind while on, the other hand, actual accomplishment of activities is guided by capabilities. We can note, therefore, that theoretical practices are brought about by human reflections while practical practices are brought about by human capabilities (Davidson, 2004).
In most businesses, theoretical imaginations of the human minds exceed practicable achievements. This, in most occasions, results to the formulation of unachievable organizational goals. Sometimes managers put their employees into unimaginable tasks all in a bid to meet goals that are ambiguous. For instance, businesses in different localities have varied capacities inconsiderate of their similarity.
This, therefore, means that these organizations cannot, by any chance, come to a concurrent organizational achievement. There are quite a number of factors that may result to this disparity. For instance, external environments of these two corporations may vary to an extent that they may never be comparable in terms of profit margins, however much alike they could be in structure, policies and plans (Davidson, 2004).
It is worth noting that when an individual acquires practical abilities, he then learns the manner in which something is done.
However, when an individual is equipped with theoretical knowledge, the process is considered as a mere leaning procedure until he eventually acquires the knowledge of actual implementation. Managers in different levels of business are all presumably equipped with the theoretical managerial knowledge (Hitt, Ireland, Hoskisson, 2012).
Managers with only theoretical knowledge of managerial responsibilities are bound to set theoretical objectives; most of which may only be virtual goals. Unless a manager is practical in his decisions, all organizational objectives, policies and strategies are bound to fail when it comes to implementation (Lasserre, 2012).
As a result, it is imperative that all managers in all levels of organizations acquire both theoretical knowledge (to help them come up with institutional objectives, policies and strategies) and practical knowledge (to assist in evaluating the practicability of the already proposed objectives, policies and strategies) (Ungson, & Wong, 2007).
Conclusion
International businesses are subject to a lot of drawbacks as a result of cultural diversities and other external factors such as intergovernmental policies and global business strategic plans. Such businesses are faced with unimaginable threats as a result of poor evaluation of the drawbacks that might surface during the formulation of organizational plans.
In some occasions, businesses dwindle and collapse due to the simple reason of failing to observe strict organizational policies in relation to the dangers that are brought about by unfavorable business environments. Other businesses have also failed after trying to emulate the policies and objectives of similar businesses, however distinct their niches are.
Therefore, it is imperative that managers set clear pathways for employees to observe strict organizational policies as a way of shunning discrepancies brought about by negligence. Employees too should provide their undivided assistance in ensuring that external departmental threats are addressed before they actually manifest (Peng, 2009).
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