In the modern world and contemporary economic conditions, international business is a matter of course. It is normal and acceptable to invest abroad. Nevertheless, a couple of decades ago it was something unexplored.
In respect of doing business internationally, a case of Grupo Financiero Inverlat is of interest. It reveals the history of a Mexican bank being managed by Canadian specialists (from Bank of Nova Scotia) after investing in it and finally buying 54 percent share. Managers from Canada had a couple of challenges to face. The bank they came to required changes. “…the years of stagnation under nationalization had created a bank that had failed to create a new generation of bankers to reflect the changing times,” states the Case Study (Rowe, Guerrero, 426). Thus, restructuring and staff changes were inevitable. If I were in the upper management team of BNS, I would do the following.
Firstly, I would carefully study the history of the company where I am going to work. It is necessary to know the background of the business you are entering. When restructuring is coming, staff reduction is one of the matters that scare workers. As a manager, I would try to avoid mass dismissals, at least within the first year of changes. I find it crucial to give people an opportunity to work under new management and show their abilities in the modified conditions.
Secondly, an essential moment in the life of a manager in a foreign country is hard work, and it is necessary to be well-prepared for every meeting. It presupposes the knowledge of business peculiarities of the country, understanding local laws, and ethics. When a manager is open to communication, is ready to listen and learn, his or her chances to succeed in new conditions are apparently higher.
PNC, being one of the oldest banks in the USA, serves millions of customers across 19 states. Of course, expanding banking business to new territories is a matter to be studied and thought over.
Going to Harris County, Texas, may be a smart step leading to success. It is the biggest county in Texas, and it appears to be the third-most populated county in America. The important factor for business development here is the growing population. Thus, census of the year 2000 showed 3,400,578 people, this of 2010 – 4,092,459, and according to estimates of the year 2015, the population is about 4,538,028 (Harris County Profile, par.2). Growing population leads to a growing need in different kinds of service. Consequently, development of various services demands good investment, and a reliable bank is to provide it.
Doing business is always a challenging and risky way to go, and when it comes to international business, challenges and risks can be multiplied by ten. A manager needs to follow some rules to succeed in a foreign country.
It is necessary to learn the country’s realities, economic system particularities, its current condition as well as national traits. The good thing is to have an idea about the culture of a country you come to; it may help to act appropriately in certain situations (Bolander, par. 3). Knowledge of a language spoken in this country is also necessary, although it is not possible within a short period.
Dealing with employees is an integral part of any business. Thus, the new policy of the company should be clear and understandable. The staff that trusts the management and is not scared to look into their future is sure to work more effectively. The workers should know their prospects for both good and bad fulfilling of their duties.
The current situation in the world financial market is not steady. This fact means that some businesses do not develop as rapidly as before. However, such a period may be favorable for foreign investment. There can be an opportunity of buying a stockholding of a company, a bank for example, at a lower price. Obviously, obtaining a foreign bank within the existing circumstances is a risky step. Nevertheless, with appropriate management and a well-judged policy, it may become profitable.
With the Indian market open to foreign funds, American banks will have almost the same conditions as the local banks. On the one hand, it is a real possibility to develop internationally. It may give a certain profit and make the financial institution more attractive. On the other hand, equal statuses mean that foreign banks will have to lend not only to successful businesses but also to the poor categories like Indian banks do (Bradsher, Barry, par. 9). It may be not very profitable, but this is what the banks already do in their native countries, so it will not be a surprise.
Next demand of the government is to hire Indian citizens as directors of subsidiary companies (minimum 50 percent). It may result in more trust from the citizens, for the local population may be suspicious about foreign bankers. One more objective that the foreign banks should consider is that they may be forced to invest in the farming sector of India like domestic banks do.
It can be concluded that opening a new market for the banks can be a sound investment. Still, all details and risks should be examined and assessed. India is open to foreign investors now, and having a business there may be a door to other eastern countries.
Works Cited
Bolander, Jarie. “Doing Business Internationally”. The daily MBA. Web.
Bradsher, Keith, and Ellen Barry. “India Gives Foreign Banks New Door into Local Market”. The New York Times, 2013. Web.
Texas Association of Counties. “Harris County Profile.” Web.
Rowe, Glenn, and Laura Guerrero. Cases in Leadership. 2nd ed. Sage Publications Inc., 2011