Strategic planning & management on: International Strategic Management & CSR

Executive SummaryThis report gives the brief overview about the International Strategic Management. This report indicates the process of International Strategic Management and the overview about the CSR. This report also gives the brief overview about the modes of Internalization and risk involved in each mode and why firms involved in the international businesses and form strategic alliance with the overseas firms. At last, this report tells about what is involved in the process of the control in the international business at the distinct level.

Q.1.) International strategic management

It is very clear that the International Strategic Management is the ongoing and complete management process of the planning aimed at implementing and formulating strategies which enable the firm to sustain effectively globally (Hamilton, & Webster, 2009). The procedure of forming the specific global strategy is considered to as the strategic planning. Senior Managers and top-level executive are generally accountable for the strategic planning. The 3 competitive advantage sources available to the global business are multinational flexibility, worldwide learning and global efficiency.

The basic steps in formulation of the international strategy are

• Forming of the mission statement
• Evaluating the company and its surrounding for determining of strengths, weakness, threats and opportunities
• Setting of the strategic goals
• Developing of the tactical plans and goals
• Developing of the strategic control structureProblems- Faced by the firms while taking the process of International Strategic Management

It is complex to develop the 3 competitive benefits at the same time because each benefit needs the distinct strategic perspective. For e.g. to develop global efficiency, the company often centralizes the control and this restricts its capability to develop the multinational flexibility. Pursuing either multinational flexibility or global efficiency might inhibit the ability of the Company to promote the worldwide learning and in the situation of the global efficiency; the power centralization may restrict the capability to collect the information from various parts of company, whereas the power decentralization which is related with the global flexibility might also impair global learning as the units work in the isolation from each other.

CSR

CSR advances the vision of the business responsibility to the broad variety of the stakeholders, besides investors and shareholders. It is very clear that issues of the sustainable development turn out be more significant and the query of how the sector of the business resolves them and becoming the important component of the CSR. It is significant for the firm to keep in brain that there are 2 different drivers for the CSR (Griffin & Pustay, 2010). One is associated with the public policy and the consequences of the sectors of the business are large and it is very natural that society and government take the closer interest in what the business does. It is very clear that business performs the crucial function in both wealth and job creation in the society and effective use of the natural capital. It locates companies to manage the risk and take benefit of chances particularly in regard to the corporate image and wide stakeholder’s engagement.  Basic regions of the concern are protection of the environment and employee’s wellbeing, the civil society and community both present and in future. Under the responsible CSR, the company might choose to perform as the good citizenship that is to serve the social concern of the stakeholders. The Company might pursue the agenda which assist it reducing current or anticipated adverse impacts from its activities of the business throughout the value chain.  The effective implementation of the CSR initiative needs the positioning of the measurable targets and measures of the performance. Various issues have been taken into consideration during the formulation of CSR strategies such as removing dis-incentives and celebrating achievements of the CSR, and encouraging the team and maintaining pride and enthusiasm (Hill, Cronk, & Wickramasekera, 2011).

Q.2.) Different Approaches for explaining the stages of Export DevelopmentIt is very clear that export development is greatly respected by both corporate and public policy makers because of the huge microeconomic and macroeconomic advantages obtained from the external trade (Fisher, Griffin & Pustay, 2006).

It is viewed that Wiedershein and Johanson offered the model which emphasized the organizational types of the global business involvement. This model comprises of 3 export stages and one stage is related to post export and showing the successively higher resources commitment to the overseas markets.

It is viewed that Tesar and Bilkey conceptualized the process of the export development from firm’s perspective enhancing dependence on more far countries. This model comprises of six different levels of the export development in association to the managerial attitude, varying from one of the comprehensive inadequate interest in starting export, to one which marked by dedicated involvement and interest in exploiting of the export opportunity situated far from the base of the manufacturer.

Another model is proposed by the Cavusgil which conceptualized the behavior of the export as the process containing 5 different stages, the phase of the pre-involvement, reactive involvement, restricted involvement, committed involvement and active involvement. The last phase was removed from model after the initiation of empirical testing. The process of the export development was perceived as the outcome of successive actions created by the management over the time periods. This model recommended the group of firm managerial and particular factors which inhibited the progression of the firm throughout the path of internationalization.

There are some ways through which firms could overcome the mistakes often made by the exporters such as

• It is viewed that exporters usually neglects the market of the export when the domestic and local market booms. This problem can be solved that the firm should advise the exporters to concentrate on both the markets export as well as domestic.
• It is very clear that exporters are failed to get qualified counseling of the export to make the marketing plan and global strategy before setting up of the small companies. In specific, firms require to have defined strategies and objectives when shifting into the field of the export.
• It is very clear that exporters are failed to modify the strategies and products for meeting the cultural preferences and regulations of the foreign country. This problem can be solved; the firms must train the exporters on modification of the strategies in meeting of cultural preferences and regulation of foreign country.
• Another problem is exporters are not able to treat the international customers and distributors on the similar basis as their local counterparts. This problem can be solved exporters should treat the international customers and distributors in the same manner.
• Another problem can be inadequate commitment from the top level to overcome the financial requirements and difficulties of the exporting. This problem can be solved firms should give the adequate support to overcome the financial difficulties and requirements of the exporting.

 Q.3.) Internationalization

It is very clear that Internalization considered as the process through which companies enhance their knowledge of the persuasion of global actions on their future and form and take out the transactions with other companies from another country.

Modes of Internationalization

Decisions regarding the modes of the entry of the firm to the specific foreign market are between the most vitally significant which its management shall have to consider. Once the method of the entry is selected, its usage has considerable implication for the broad variety of the Global Marketing concerns. The Companies are required to think carefully about all available alternatives, the costs, possible risks and loss of the control comprised. The alternatives for entering in the foreign market other than exporting are

• Management Contracts

• Contract Manufacturing

• Licensing/Franchising

• Joint Venturing

Management Contract

Management Contract is the contract in which the Company in the one country offers the team of the expert managers to the enterprise in another for the fixed schedule under the contract. This contract might be implemented to supplement the JV, contract manufacturing and separate licensing.

Contract Manufacturing

The agreement in which the Company signs the agreement with the foreign company that is going to produce goods with materials and design offered and assemble the parts into the final products. It is viewed that risk present in the contract manufacturing is that the user shall not be capable to effectively commercialize the service and product. One of the significant risks attached with the contract manufacturing is the product liability.

Licensing and Franchising

Licensing referred as the contractual arrangement where the licensor permits its patents, technology, trademarks and other proprietary benefits to be implemented through license. The transporting goods cost to the domestic market could be prohibitive (Edwards, Nyland & Coulthard, 2000). With the franchising contract, the foreign company accepts the franchiser whole businesses format in domestic market, its trademarks, methods of the business, premises layout etc. It contains all failure risk.  The risk involved in the licensing and franchising is searching of the accurate individual to get related with, searching of the right type of the environment to work in, and viewing the balance among the franchisee and the brand. These all kinds of the risks can be solved by finding out of the accurate individuals and environment.

Joint Venture

It is very clear that Joint Venture considered as the collaborative contract among unrelated party, which combine and exchange several resources and remaining independent and separate lawful entities. JV is significantly becoming famous as the mode of entering into the foreign market.

 Risks Involved

The risks involved in the joint venture are partners have distinct goals for joint venture and there is imbalance in expertise level, assets or investments bring into venture through distinct partners.  Management styles and different cultures resulted in poor cooperation and integration. Risks can be solved in the case of the joint venture because success in the joint venture relies upon detailed analysis and research of objectives (Dixit & Norman, 2000). This must be followed with efficient communication of the plan of the business.

Advantages of the Strategic Alliance

In general, the strategic alliance is the form of the corporate partnering and the combination of 2 or more companies to swap the resources and divide the rewards from the joint enterprise. It is very clear that Strategic Alliance is spreading in each and every industry and becoming as the mandatory driver of the superior growth (Daniels, Radebaugh, & Sullivan, 2011). Companies are making alliances to get technology and gain entry to the particular market, reducing financial and political risk and ensuring competitive advantage. It is more complex for the organization to stay self sufficient in the global business environment which needs both concentration and flexibility. It is very clear that companies are considerably experiencing the consequences of the global competition and trying to accomplish the sustainable advantage with the help of strategic alliance (Hill, Cronk, & Wickramasekera, 2011). In this global environment, successful companies require to build, select and implement the vital abilities which can prevail from the strategic alliance and which shall enable them for gaining the competitive benefit, increase value of the customer and drive the markets.

Q.5.) Levels of the Control Process

It is very clear that control is considered as the process of regulating and monitoring activities in the firm so that few targeted performance is maintained or achieved. It is the significant functions of the management in the international business as it permits the Company to restrict the actions which might be harmful to organization success and motivate actions which are helpful to the Company. The three basic control levels in the international business are operational, strategic and organizational (Czinkota, Romaine & Moffett, 2008). It is very clear that strategic control permits the Company to control the both implementation and formulation of the strategy. Organizational control comprises adopting the sufficient organization design to match up with the external and internal environment. Lastly, operational control relates with the operating systems and processes throughout the Company. The basic requisite to effectively handle the risk related with operating the business is to have the effective and sound control framework. The presence of such framework in the company encourages the sound control surrounding in which business works. With the enhancing corporate governance levels, the CEO and CFO are responsible for the efficiency and effectiveness of the control environment. It can be said that there must be minimum controls to make sure that basic strategic, organizational and operational company risks are managed. At last, it can be said that regulating and monitoring activities are involved in the process of the control so that few targeted performance is achieved or maintained.

Control Problems

It is viewed that control managers of the business comes from the professional background and who are experienced with the situation of the business where they shall have to transact both internationally and across the cultures (Baldwin, 2001). There are various control problems facing by the international business such as language, distance, culture and techniques which produce barriers to the effective control. In general, control comprises the formation of the performance standards, evaluating performance against the standards and rectifying deviations from plans and standards. In general, plans are prerequisite to the control but these are formed in between of uncertain forces which are external and internal to the Company. It is very clear that in international business the capability to the control is disrupted by culture, distance and language. For e.g. Licensing is the prevalent component of export and import control in the developing countries. To a certain extent, documentation, procedures and tariffs on exports and imports perform the controlling role.

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