Globalization has created myriad of new business opportunities as various countries opt to lift trade barriers to accommodate entry of multinationals. The increasing number of business organizations that are pursuing international marketing opportunities has led to stiff competition. Hence, the emerging competitive business environment calls for effective and competent international management skills.
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On the same note, foundation of successful management functions in international markets is dependent on intercultural skills of multinational managers.
Similarly, international markets are affected by variety of internal and external factors that are likely to hinder business operations in foreign business environment. Thus, proper application of integral management practices may guarantee success in achieving international and national business goals and objectives.
Needless to say, contemporary management activities are being directed towards achieving two important goals namely improving profitability and securing competitive advantage (Rhinesmith, 1996, p.118).
In order to achieve the aforementioned goals, businesses managers have been entrusted to carry out various managerial activities that are in line with business goals and objectives. So far, scholars in management have identified four management concepts that if effectively executed, may assist organizations achieve their set goals and objectives.
One of the most basic activities of management is planning. It acts as foundation on which all the other functions of management are executed (Clark & Demirag, 2002, p.105). Intrinsically, the process of planning involves critical assessment of an organization in terms of its present positioning in the market as well as future threats and opportunities that are likely to be encountered.
The results of the above evaluation are what determine course of action that a company will adopt to achieve the set goals and objectives. According to Clark and Demirag (2002, p.106), managers should note that planning activity is a continuous process that needs to be modified owing to dynami nature of organizations.
In some cases, external factors that negatively affect business may compel managers to redesign new action plans to accomplish certain goals (Clark & Demirag, 2002, p.116). For example, a new brand of soap in the market may compel companies dealing with similar products to rethink of new marketing strategies in order to maximize their positioning in the market.
Research has shown that business environments are continuously evolving and as such, it may become extremely cumbersome to predict these changes unless business managers undertake the process of planning seriously (Clark & Knowles, 2000, p.1). it is against this backdrop that managers should work towards adopting strategic management as part of planning activity.
Clark and Knowles (2000, p.368) observe that strategic management entails critical analyses of both internal and external factors that are likely to hinder attainment of goals and objectives.
As stated above planning remains to be the foundation of all management activities. The second function of management is organizing or mobilizing available resources in order to optimize production. The responsibility of management at this stage is to organize necessary resources (both manpower and material) that are needed to implement the course of action identified during planning stage (Rhinesmith, 1996, p. 116).
In any case, organizational management seeks to create relationships by assigning specific responsibility for each team member and identifying the authority to head each team. As part of organizational activity, it is the responsibility of management to take care of staffing issues since it is the most important asset in attainment of goals and objectives (Clark & Knowles, 2000, p.367).
Staffing is basically concerned with the process of equipping an organization with the necessary workforce. This includes issues related to recruitment, selection, training, placement, compensation, demotion and employee’s retirement issues.
The main aim of assessing the staffing needs of an organization is to ensure that it gets the right men for the right job. The capacity and ability of an organizations hired personnel is what determines the future success or failure of the organizations goals (Boddewyn, 2004, p.198).
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The third and equally important management activity is direction and leadership. The main concern of management at any given level is facilitating workforce delivery to achieve desired goals. Hence, it is imperative to note that human assets require continuous motivation and encouragement in order to work effectively (Boddewyn, 2004, p.211).
It is the role of management to direct team members towards delivery of action plans. It achieves the above function by giving instructions and constant communication about orders, rules and decisions (Schneider & Jean-Louis, 1997, p. 214).
In addition, the management provides guidance and leadership, supervises the work delivery process and employee behavior towards the same, and inspires the employees towards improved performance. Research has shown that employee satisfaction translates to positive and improved performance (Schneider & Jean-Louis, 1997, p.216).
Therefore, most managers today are focused on improving employee satisfaction, and this should be activity for every organization that wishes to survive the cut-throat competition (Boddewyn, 2004, p.198). For example, the management can carry out employee satisfaction surveys to find out the level of satisfaction. Depending on the results, the management can improve on the areas identified to be creating a dissatisfied workforce.
This process of defining the desired direction and leadership of a company can be achieved with ease; however, pro-activation the right direction requires an insightful and experienced management (Boddewyn, 2004, p.200).
The last of the four activities of management activity is control. The main aim of this function is to establish performance standards that are biased towards achieving organizational goals (Clark & Knowles, 2000, p.366). It also involves carrying out performance evaluation on how the actual job is progressing.
At this stage, the management communicates the expected performance standards to their employees and sheds light in case any of the organization’s department is experiencing a challenge in achieving required standards (Clark & Knowles, 2000, p.362). Similarly to other functions of management, control activity is a continuous process.
The management constantly evaluates performance standards and identified challenges that may hinder improved performance standards. The continuous control evaluation process is important because if any future problems are identified, preventive measures can be put in place immediately (Boddewyn, 2004, p.199).
In brief, the managerial control activity is a kind of a follow up process that examines performance and compares it against the identified actions plans, and takes corrective measures if needed (Clark & Knowles, 2000, p.362).
As highlighted above, success of any organization depends on effective and efficient management. Any level of success is measured against the achievement of set goals and objectives (Rhinesmith, 1996, p.212). Hence, management functions are driven by individual bestowed with the responsibility to drive an organization towards its end goals and objectives.
The role of managers is constantly changing in response to the changing organizations needs. Most companies are venturing into international trade, and the move is demanding special qualities that the individuals in management should possess. Globalization has expanded business opportunities, but it has also created a complex corporate management structure.
The 21st century corporate manager has to adapt to the changing business environment to be able to come up with modern solutions in a challenging business environment (Usunier, 1998, p.118). on the same note, International businesses operate in multicultural environments, which equally demand managers to have cross-cultural management skills (Clark & Demirag, 2002, p.106).
Many multinational businesses have realized the need for intercultural communication to drive the businesses in international markets. According to (Usunier, 1998, p.122) a manager should possess intercultural management skills to be able to effectively communicate with customers, employees and any other interest party.
Communication has been recognized as a key driver for a business success; therefore, intercultural skills are extremely essential for international business management. A successful intercultural manager is the one with demonstrative skills on proper supervision of foreign market penetration, besides the ability to oversee the process of employee selection, guidance and mentoring (Usunier, 1998, p.122).
In addition, they should be able to negotiate and manage any arising conflicts with the organizations clients as well offer insightful analysis on the intercultural differences that are likely to cause failure or success to the organization (Usunier, 1998, p.123).
To achieve positive results in cross cultural management, such a manger should possess key attributes such as flexibility, patience to work with multicultural workforce, high level of intercultural awareness and ability to exploit the intercultural differences to the benefit of the organization (Usunier, 1998, p.118).
Boddewyn (2004, p.195) emphasizes that intercultural awareness attribute is the most fundamental factor for succeeding in cross-cultural management. The management in the international context must capitalize on direction and leadership function of management to be able to avoid the negative consequences evident in cross cultural workplace environment.
The organizational element of staffing is the most important factor in achieving success in international business. Therefore, managers should evaluate strength level of organization’s personnel so as to achieve high-performance standards (Chang & Ha, 2001, p. 32).
As exemplified above, globalization have opened new opportunities for international business ventures to expand. However, successful penetration to foreign markets is only attainable if management understands the internal and external factors that affect international businesses (Schneider & Jean-Louis, 1997, p. 216).
The external factors, which collectively forms the business environment include; economic, social, technological, political and legal elements. The external factors are likely to affect an organization’s business operations. Such factors are usually beyond the control of an organization’s management, but the management should be aware on how the factors are likely to affect their business.
To begin with, the economic dimensions of the business environment comprises of the nature of the foreign country economic system. The structural anatomy of the economy which is mainly shaped by the economic policies implemented by governments is also considered to an external factor that affects international business environment (Schneider & Jean-Louis, 1997, p. 216).
In addition, the social-economic structure present in a county plus organization of the capital market affects the operations processes of an organization. Therefore, businesses wishing to succeed in international markets should clearly visualize the economic factors likely to hinder their success.
The social dimension of the business environment comprises of the value system of the society present in a particular country. Any organization willing to succeed in international markets should evaluate the sociological factors present in the country of interest.
According to (Boddewyn, 2004, p.200 ) sociological factors comprises of elements like; customs and conventions, cultural heritage, mobility of labor, cost structure and view towards wealth and income, all which have far reaching effects to the operations of an organization.
Boddewyn (2004, p.195-212) adds that sociological factors defines the work culture and mobility of labor and calls for high level of intercultural management awareness to achieve success with such a dynamic workforce. The demand of products and services is highly dependent on the social cultural factors such dictated by customs, attitudes and preferences (Boddewyn, 2004, p.206).
For instance, MacDonald has to readjust their menu when they realized that the demand for their beef burgers was very low in China because the Chinese people prefer chicken to beef. Therefore, the social-cultural business environments as a determinant of businesses code of conduct, need to be evaluated before hand to ascertain how they are likely to influence international business ventures (Usunier, 1998, p.118).
Another pool of external factors that should be appreciated in international business is the political business environment. The latter is shaped by philosophical ideologies of political organizations fueled by the ideology of the government in power. Political ideologies are the main determinant of a country’s political stability depending on the foreign polices that are implemented (Rhinesmith, 1996, p. 102).
International businesses, to some extent, are not free from external political influence. For instance, Rhinesmith (1996, p. 104) cites a case where implementation of a politically motivated policy in India discontinued business operations of Cocoa-Cola company in then late seventies. It was not until 1991 when the same government renewed its policy to allow reentry of multinationals.
Technological development in a country can either enhance or hinder growth of international businesses. The type of technological innovation and advancement is a strong determinant on the type and quality of goods and services that an organization produces (Schneider & Jean-Louis, 1997, p. 216).
Some technological advancement that countries adapt may either act as an opportunity or a challenge for international business to succeed (Rhinesmith, 1996, p. 104).
Finally, legal regulations that prevail in a particular country may hinder or accelerate growth of international businesses. Legal environment is determined by factors such like flexibility and adaptability to law in order to accommodate international business ventures (Usunier, 1998, p.118).
The rigidity of legal factors present in some countries poses a challenge to management activities because they hinder businesses expansion and performance (Usunier, 1998, p.118).
In a nutshell, it is vital to reiterate that globalization has created both opportunities and challenges in corporate management. As companies explore and invest in international business, they have to modify management functions to suit the ever changing business environment. Certainly, the most evident characteristic of international markets is diversity in cultures.
Therefore, future success of international business heavily relies on proper cross cultural management. Any manager willing to succeed in cross cultural environment should prioritize proper coordination and implementation of intercultural communication within the workplace environment.
The latter requirement also amounts to one of the prime qualities of business managers. Therefore, it is crucial for business managers to develop both competent and skillful managerial practices in order to attain set goals and objectives within a given time frame.
Boddewyn, J., Toyne, B. & Martínez, Z. 2004. The Meanings of “International Management”, Management International Review, 44(2):195-212.
Chang, S. & Ha, D. 2001.Corporate governance in the twenty-first century: new managerial concepts for supranational corporations. American Business Review, 12(3): 32-44.
Clark, T. & Knowles, L. 2000. Global myopia: globalization theory in International Business. Journal of International Management, 9(1): 361-372.
Clark, W. & Demirag, I. 2002. Enron: The failure of corporate governance. Journal of Corporate Citizenship, 8(1): 105-122.
Rhinesmith, S. H. 1996. A Manager’s Guide to Globalization. Chicago: Irwin Professional Publishing.
Schneider, S. & Jean-Louis, B. 1997. Managing Across Cultures. New York: Prentice Hall.
Usunier, J.1998. International and Cross-Cultural Management Research. London: Sage.