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Table of Contents

Introduction. 3

Review of Theoretical Knowledge. 4

Reflection of Practical Experience. 6

Evaluation and Comparison of Theory and Practice. 9

Conclusion. 12

References. 13

Introduction

The global or international managers of the twenty-first century have to face a lot of challenges pertaining to the volatile, complex and dynamic business environment. The managers operating in an international environment have to understand and adjust to the external operating environment of the regions in which their business operates. The management styles and business strategies being implemented by the management are largely dependent on the opportunities and the risks of these global market places in which the business operates. (Walker, D., Walker, T. and Schmitz, J., 2003).

The Global business environment is the key factor, influencing the role and responsibilities of an International Business Manager, in an Organization. The Manager has to operate his overseas business by balancing the global trends and international competition in all of the countries in which the company has expanded its business operations. The Manager needs to chalk out the Competitive advantages of each of the nations of business operation, after studying and analyzing all the Environmental Risks factors. (Deresky, Helen, 2008). An efficient Global Business Manager studies and Understands the Political, Legal, Economic and Technological Environment of each of the countries in which it wishes to operates, and accordingly devises strategies and business plans of continuing business operations in a foreign land.  Every organization having global business operations necessarily requires a manager for International Business, who independently studies the global business scenario and facilities strategic decision making in the Organization.

Review of Theoretical Knowledge

Numerous theories and models pertaining to the International Business Management are being developed and researched by many of the scholars and eminent people from the Industry. All of them facilitate the international business managers in taking the appropriate strategic business decisions at an international level. Let us discuss few of these theories:

International Product Life Cycle Theory

The International Product Life Cycle Theory, states the evolution of an organization across the various international locations, spread over a period of time. This theory goes in hand with the strategic marketing program of an organization. This theory has the combination of the economic principles like the market development and economies of scale, along with the marketing aspect of the product life cycle.

Porter’s 5 Force Model

Michael Porter, 1980, studied and explained the relevance of the five business entities that may directly influence the successful functioning of an organization in a business environment. These 5 forces were the power and influence of the buyers of the business, the power and influence of the suppliers of the business, the threat of the new entrants in the same industry, the threat of the substitute products to the business and the rivalry among the existing competitors of the international business.

PESTEL Analysis

The PESTEL Analysis is an analytical tool, used to scan the external business environment of a region or a nation, in which the business functions or is planning to expand. This Analysis studies the Political, Economic, Social, Technological Ethical and Legal aspects of a particular nation or a region, which is useful for making strategic decisions in the business.

Reflection of Practical Experience

Managers handling global businesses, have to face a higher degree of challenges and obstacles, compared to the managers in charge of domestic Businesses. The international exposure and practical experiences gathered by these managers definitely make them more productive, efficient and wise decision makers. (Doole, I. & Lowe, R. 2003)

Whenever, the management thinks of expansion or approaching a newer country, several factors and checklists are to be carefully examined and evaluated.

Following are some of the corporate practical experiences, observed and experienced by some of the upcoming global managers:

Gayle Warwick’s Linen Company: Gayle Warwick Fine Linen is a multinational company. This London based company is in the business of making handmade bed and table linens. Their business model involves multiple countries, as its linens are woven in Europe and embroidered in Vietnam. The Company sells its produce mostly in US and Britain. The manger of the business, Gayle Warwick started her business after making a comprehensive PESTLE Analysis of all the European and American countries. She believes in conducting a through research and country analysis before going for expansion or introducing newer merchandise.

CHEGG, an Education Company: Chegg is a US based leading education service Provider Company. It operates for a niche group of international customers, mostly in the education domain. The Company provides Academic Content development services to many of the International Universities and Publishing Houses. The inherent nature of the company’s Business Model is Global, as it has a larger chunk of its employees, scattered across multiple nations. It is highly challenging for the company’s business managers to handle the cross-cultural employee expectations and control their international formal communications networks. The Company has successfully developed its private online training forum, which address the language and communication etiquettes gaps between their cross-cultural employees. Such a close held platform even brings them together at a personal level, in spite of their geographical distances.

After taking in to consideration the most of the practical aspects of handing and leading a global team, the following is the comprehensive list of some of the additional functions that the managers responsible for handling international business, have to perform (Walker, D., Walker, T. and Schmitz, J., 2003):

1. The managers of cross cultural organizations have to interact and work with the colleagues from different foreign nations during the course of business functioning.

2. The managers would have to negotiate and deal with Consumers and corporate clients across the national borders of their base country. The manger would thus have to adapt the communication patterns and preferences of the foreign land. (Bennett, R. & Blythe, J. , 2002)

3. An occasional use of foreign language in business dealings would be necessary in some instances for a smooth communication. The international managers are thus highly benefited by learning some of the foreign languages.

4. Managing a geographically diverse and dispersed workforce may become challenging at times due to the varied employer exceptions from its multi-cultured employees.

5. The Managers would have to consider all their worldwide business locations, while drafting a business strategy plan.

6. Managing a worldwide International Business also poses the challenge of facing the worldwide risk across different nationalities. These risks may be political, economic, legal, ethical or even technological in nature.

Following are some of the recommended solutions to overcome the above challenges:

1. The Global mangers may send few of the promising employees on the foreign job assignments or for a short term on-site opportunity within the organization. This will help the employees in making an introspective analysis of the cultural differences among themselves.

2. Periodic Cultural Trainings and skills trainings to be provided to the new employees in order to keep them updated with all the employees across the world. (Chaney, LH and Martin, J.S., 2000)

3. Building Good relationships with the governments and supporting business entities of all the related countries.

4. Upgrading the business operations and Administrative operations with the help of reliable Management Information Systems, that helps the business in integrating all its worldwide business operations in to a user friendly information Technology system. (Deresky, Helen, 2008)

Evaluation and Comparison of Theory and Practice

Many of the business houses and companies are operating in an international business environment manufacture or merchandise goods and services across different parts of the world. They are easily exposed to the varied cultures and etiquettes of business managers across the world. So the international business manager in today’s world should be Open-minded and observant to quickly understand and inculcate the behavioral differences of the people belonging to a foreign land. (Doole, I. & Lowe, R. 2003). So, the organizations operating in an international environment, prefer to hire managers, who can who can adjust with people belonging to diverse cultures and have flexibility and open mildness in adjusting to unfamiliar environments. Some of the human qualities in the international managers, like having ethnic tolerance, having some multi cultural experience, or an adapting nature, understanding of an international language, etc. help the organizations in successful expansion of its business activities globally.

Hofstede (1980, 1984, and 1991) has attempted to study and identify the four main dimensions of a nation’s culture. According to him, cultural behavior of an individual is highly dependent on the nationality, and he quotes that, “Culture to me is the collective programming of the mind which distinguishes one group or category of people from another. Culture is a construct that is not directly accessible to observation but inferable from verbal statements and other behaviors and useful in predicting still other observable and measurable verbal and nonverbal behavior.” The values of similarly aged people, i.e. the managers belonging to 64 subsidiaries if IBM worldwide were tested and compared for behavior and measured against a defined set of 5 dimensions called as the power distance, I/C, Uncertainty Avoidance, Masculinity- Femininity and Long Term Vs Short Term Orientation.

Let us discuss the meaning of these 5 dimensions identified by Hofstede (1980, 1984). The extent to which the power differences were accepted and allowed in a society/group was identified as a power difference dimension. I/C is the capacity to which one’s self-identity is defined according to individual characteristics or group characteristics to which the individual belongs to on a permanent basis, and the limit in which the individual or group interests dominate their characteristics. The Uncertainty Avoidance can be explained as the extent to which societies focus on the methods of reducing uncertainty and creating stability. It can also be called as the degree of tolerance of the society for uncertainty or instability. The society having higher willingness to try something different or innovative has lower Uncertainty Avoidance factor. The dimension of Masculinity-Femininity measures the importance of conventional male orientated ambitions and achievements over the conventional female orientations of nurturance and interpersonal harmony. Long Term V Short Term dimension is applicable to society’s search for good behavior or virtue that is the measure of extent to which the society shows a future-oriented (vibrant) outlook rather than a conservative past and short-term (stagnant) opinion.

After a careful Evaluation and Comparison of the Theory and Practice, the following aspects of the business are found to require a careful handling by the business managers, in order to achieve a good standing in the international business arena:

1. Effective management of cultural differences in the business practices and the formal internal communication channels (written and verbal) of the Organization.

2. Fighting and dealing with the Challenges of the Dynamic External Business Environment pertaining to all the nations, in which the business operates.

3. Devising the International Marketing Strategies and gimmicks suiting and attracting the International Consumers across the world.

4. Managing a diverse stake holders and employees worldwide and formulating Strategies for the Global Human Resources Management

5. Upgrading the Technological requirements of the business, up to an International mark

6. Exploring the global tie up opportunities with many of the international peer companies

7. Experimenting with the up gradation and change in the age old Business Model to suit the

requirements of a dynamic international business environment.

Thus, the International Business Managers should always look out for the new economic developments across the globe, in order to strategize their international business strategies for successful business expansion.

Conclusion

There are many models and theories on international business management, written and proved by eminent people, scholars, thinkers and industry heads. All of them provide with necessary learning of how to efficiently manage a business in an international scenario. However, the International scenario has been changing rapidly in the past few years in terms of boom in the Information technology and Globalised trade in the world. Today’s mangers need an equal and reciprocal change in the methods of managing their business globally. Hence, the reflective practical experiences shared in the report, can be weighted on higher scales in the learning curve of the managers, especially the ones dealing with cross-cultural businesses. The business market today goes beyond the geographical borders of a State and a country. The Information technology makes it literally a click away from its stakeholders. So we can conclude that the international business is highly dependent on the successful management of the cross-cultural challenges faced by the today’s business mangers.

References

• Adler, N.J. and Graham, J.L., 1989, Cross-cultural interaction: the international comparison fallacy? Journal of International Business Studies, Vol. 20 No. 3, pp. 515-37.
• Adler, N.J., 1997, International Dimensions of Organizational behavior, Cincinnati, OH: South Western Publishing Company
• Bennett, R. & Blythe, J. , 2002, International marketing: Strategy planning, market entry & implementation, Kogan Page, London
• Buzzell, R. D. 1968, ‘can you standardize multinational marketing?’ Harvard Business Review, vol. 46, no. 6, pp. 102-13
• Chaney, LH and Martin, J.S., 2000, Intercultural Business Communication, Prentice Hall, New Jersey.
• Deresky, Helen, 2008, International Management: Managing Across Borders and Cultures, Sixth Edition, Pearson Education Inc., India
• Doole, I. & Lowe, R. 2003, ‘Cross-cultural marketing for SMEs‘, in Cross-cultural marketing, eds R. Rugimbana and S. Nwankwo, Nelson Thomson Learning, Melbourne, pp. 298-321
• Resick, C. J., Hanges, P. J., Dickson, M. W., & Mitchelson, J. K., 2006, a cross-cultural examination of the endorsement of ethical leadership. Journal of Business Ethics, 63, 345- 359
• Resick, C. J., Hanges, P. J., Dickson, M. W., & Mitchelson, J. K., 2006, a cross-cultural examination of the endorsement of ethical leadership. Journal of Business Ethics, 63, 345- 359
• Spreitzer,G. M., McCall Jr., M. W., & Mahoney, J. D,1997,  Early Identification on International Executive Potential, Journal of Applied Psychology, 82(1), 6-29.
• T. Brown, 1988, Building a Transnational Team, Industry Week, May 16, 1988, pg 13
• V. Govindarajan and A.K. Gupta, 2001,  Building an effective Global Business Team, MIT Sloan Management Review, 42, no.4
• Walker, D., Walker, T. and Schmitz, J., 2003, Doing Business Internationally, McGraw –Hill, New York, NY.