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International Management

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International Management Research Report – Group

EXECUTIVE SUMMARY

The economic situation in Asian countries has been rising for the past few decades due to the large number of young productive population, investment of youth education and development of technologies in Asian countries. Therefore, most western countries, including Australia, are attracted to invest in Asian countries as their manufacturing base and export destination. Consequently, the rapid development of economy in China and other Asian countries has encouraged U.S and European Union to form a free-trade alliance in order to keep them as the market leader in the world economy. Hence, the trade between borders would be a lot easier and more companies will be encouraged to go international. Hence, global and intense competition in a worldwide scope will be created.
By taking into account of those two events, this report will discuss the issues that are potentially faced by organizations which operate internationally, which is drawn by articles from Bartlett and Ghoshal. However, due to the limitation, the report will only discuss four major issues,
The first issue will discuss about how companies create transnational companies. It is believed that businesses often fail operate internationally due to the incapability of fulfilling the needs for global integration, differentiation and innovation spreading simultaneously (pg. 7). The second issue will discuss about the implications in managing relationship among subsidiaries in international context. Businesses are expected to create an interdependence business structure between subsidiaries and headquarter, by adopting matrix management (pg. 9). The third issue will discuss the implications of top managers in managing the employees within the organization in order to gain sustainable competitive advantage (pg. 10). Furthermore, the last issue will discuss about how companies make choices between profit maximization and social responsibility (pg. 12). All the issues that are identified will be given examples and linked to PESTEL framework.
Next, the report will provide recommendation to deal with the issues identified. The first recommendation will discuss about how companies create transnational companies in order to deal with the first two issues (pg. 15). Moreover, the report recommends, the top managers should give authority to their employees to make decision (pg. 16). The last recommendation concern about how businesses create a sustainable competitive advantage through Corporate Social Responsibility (CSR) (pg. 17). After the recommendation is discussed, the conclusion of the report will be presented (pg. 19).

Table of Contents EXECUTIVE SUMMARY 2 1.1 INTRODUCTION 5 2.1 ISSUES ANALYSES 7 2.1.1 Issue 1: Creating a Transnational Organization 7 2.1.2 Issue 2: Managing Relations among Subsidiaries in International Context 9 2.1.3 Issues 3: Challenges in engaging capabilities of employees within the organization. 10 2.1.4 Issue 4: Profits Maximization vs. social responsibilities 12 3.1 RECOMMENDATION 15 3.1.1 Recommendation 1 15 3.1.2 Recommendation 2 16 3.1.3 Recommendation 3 17 4.1 CONCLUSION 19 5.1 REFERENCES 20

1.1 INTRODUCTION

Globalization has been a concern for businesses for the past several years. All aspects of life, such as, political, economy, sociocultural, technology, environment and legal, have been transformed by globalization. The world has become more dynamic and volatile; hence, organizations are forced to change the way things work in order to maintain their sustainability.
Moreover, Asian countries, according to the White Paper, have started to grow in the past two decades and will achieve stability. This is made possible by the large number of young productive population, investment of youth education and development of technologies in Asian countries, such as China, Indonesia and India (Australian Government 2013) As a result, most western countries, including Australia, are interested in investing in Asian countries as their manufacturing base and export destination.
Consequently, due to the rapid development of economy in China and other Asian countries, the U.S and the European Union decided to form a free-trade alliance in order to keep leading the world economy. Jose Manuel, the President of European Commission stated, the negotiation will set a benchmark for development of global trade regulations (“EU and US” 2013). Their alliances would set global rules for the world where the tariff and other barriers to trade will be removed (Blenkinsop and Bilby 2013). As a result, there would be a cheaper cost to exchange product and services. Additionally, the trade between countries will become easier, creating the opportunities to expand, export, sell their product and make partnership (Blenkinsop 2013) which eventually increases economic growth and employment rate. The future projection calculates an increase of €86 billions per year of income in the European Union and €65 billions per year of income in the United States (Blenkinsop 2013).
Moreover, as education has developed into a higher level, more stakeholders demand businesses to be socially responsible toward their people and environment. Organizations need to have good deeds in doing business; thus, transparency has become an important aspect that has to be done by organizations.
Consequently, all these events have impacted the organizations to modify their business system in order to be successful. Hence, this report will discuss about the major issues that are affecting businesses by taking account into environmental aspects (PESTEL framework). The issues concern about how businesses can be successful in operating worldwide (creating transnational companies) and how to gain a sustainable competitive advantage in international scope in term of managing employees and of CSR. However, due to the limitations, this report will draw 4 major issues. Afterward, conclusions and recommendations will be presented.

2.1 ISSUES ANALYSES

2.1.1 Issue 1: Creating a Transnational Organization
Most companies, who operate in the international scope, face difficulty due to the environmental complexity. Some companies often treat their international operations the same way as their national operations, ignoring the different demands from different market. That approach, consequently, would make it less successful in creating a company, which operates in worldwide scope. Companies have to consider the legal and regulation aspect of the targeted market, for example, Starbucks has failed to penetrate the Australian market, especially WA, because it did not understand the local custom and its target market (Why Starbucks Failed 2008).
While some other companies have recognized the different needs in different markets , unfortunately, they are unable to maintain their international operations by taking account of the global forces (Bartlett and Ghoshal 1988).
Bartlett and Ghoshal (1998) argued, companies need to have transnational ability, the capability to manage across border by achieving global integration and national flexibility at the same time. They identified 3 needs that have to be done by organization in order to be successful. Firstly, organization needs to integrate globally (Bartlett and Ghoshal 1998). By organizing operations globally, businesses are able to create economies of scale which results in cost saving, create global brand image which eliminate customer confusion and centralized quality guidelines which allows simplified planning (Dahlberg, Lindgren, and Rosendahl 2003). Moreover, there would be a convergence between different market across countries in term of habits and tastes (Bartlett and Ghoshal 1998). For instance, despite cultural bound for food consumption, Coca Cola has successfully penetrated an international market with standardization strategy since 1919 and now they have expanded to more than 200 countries (“Global marketing strategy” 2013)
Secondly, businesses need to recognise the different needs of different market across countries (Bartlett and Ghoshal 1998). Regardless of globalization, the differences in culture, law and regulation, economical, religion, and other factors have made it necessary for businesses to differentiate their business units. Moreover, standardization is hard to achieve due to the cost of transportation and administrative, and due to the needs in fulfilling customer preferences and in responding to national mechanical specification and political restriction (Bartlett and Ghoshal 1998). Hence, knowing the importance to understand the local culture, Unilever, which originally standardized their international operations, began to adapt their business structure in respond to the local needs (Bartlett and Ghoshal 1987).
The last need is to develop and spread innovation across countries (Bartlett and Ghoshal 1998). Bartlett and Ghoshal said, the spread of innovation has made the product life cycles become shorter, R&D cost becomes higher, and the needs to produce in global quantity. Furthermore, since companies are competing against each other to be the first in proposing a new technology to the market, innovation can advance very quickly.
Hence, to be successful, companies need to achieve those three needs simultaneously. However, with all those different types of needs, businesses are struggling to fulfil efficiency, differentiation, and learning simultaneously in the worldwide operations. Moreover, the issue arises when businesses have to decide on whether to centralize or decentralize control and resources. With the emerging economy across border, companies are expected to be able to gain strategic control in worldwide operations and coordinate the operations globally (Bartlett and Ghoshal 1988).
2.1.2 Issue 2: Managing Relations among Subsidiaries in International Context
Based from the issue drawn above, businesses cannot manage their international operations as what they did with the national operations. They are forced to respond to the differences between markets and, simultaneously, integrate to the market globally. The issues come when businesses have to choose on how they should manage the relationships between subsidiaries and between the subsidiaries and headquarters (Ferreira 2011) in order to respond to the external complexity.
Many companies have been struggling in adapting with the globalization, intense competition, dynamic product life cycles, and complexity of relationship with stakeholders (Bartlett and Ghoshal 1990). They are having difficulty in reinterpreting their strategies and in rearranging their performance across boundaries (Bartlett and Ghoshal 1990).
Therefore, businesses must adjust the traditional business system into independence business system (Bartlett and Ghoshal 1987) by adopting the matrix structure. Matrix structure is a business system where individuals have to report to dual superiors, one functional and one operational. With the unstable and unpredictable competitive situation, matrix structure allows them to deal with the opposing needs of functional, product, and geographic management group through informal and horizontal communication channels (Bartlett and Ghoshal 1990). Moreover, businesses would be able to understand the external complexity of the environment, which allows them to be responsive toward changes in the foreign marketplace. Additionally, it would create organizational dependencies and interdependencies between their international offices (Bartlett and Ghoshal 1987).
In reality, however, the matrix strategy is complex, especially in the international scope. The process of developing interdependent network takes time and must be modified and supervised constantly (Bartlett and Ghoshal 1988). Businesses need to understand their capabilities and resources, then match those factors to the environment of the targeted market.
Moreover, conflict and disorientation can be created as the consequences of multiple reporting, information delays might happen, and accountability might be ruined (Bartlett and Ghoshal 1990). Not to mention, due to obstacle in term of distance, language, time, and culture (Bartlett and Ghoshal 1990).
Hence, companies are encouraged to modify responsibilities, comprehend the needs of having diversified stragegic ability (Bartlett and Ghoshal 1987), and control the interdependence relationship between subsidiaries Businesses should be able to develop a well design matrix in order to achieve business success (Bartlett and Ghoshal 1988). This interdependence is the key of transnational company, where company can “think globally and act locally” (Bartlett and Ghoshal 1988).
2.1.3 Issues 3: Challenges in engaging capabilities of employees within the organization.
As the trade barriers between countries will become lessen due to the forthcoming alliance between the US and the EU, it would be the best opportunity for companies to extend market share in worldwide. Nonetheless, before extending the market worldwide, businesses should develop a series of strategy or procedure to control and manage employees in each different country. Bartlett and Ghoshal (1995) claimed that top managers play an important role within the company. Their responsibilities are not only to control the change of company’s strategy and operation in different aspects, but also motivate and build up a good relationship with employees. In other words, they have to understand all the strategic implications of information-based and knowledge-driven within the company (Bartlett and Ghoshal 2002). Hence, they have to understand the strategy of company and outstanding knowledge in management aspect and it is necessary to own a good sensitivity of environment and employees change. Due to the worldwide always changing environment, it is difficult to control and response to the unpredictable situation (Graetz et al. 2006). Thus, it becomes a challenge for top management to engage the unique knowledge, skills, and capabilities on each member of the organization.
First of all, a top manager needs to have outstanding abilities in managing human resources aspects, since employees are the essential property of the company and it is very important for top management to control their emotion and the relationship between management and employees level (Bartlett and Ghoshal 2002 and Bartlett and Ghoshal 1995). Bartlett and Ghoshal (1995) stated: manager’s objectives are leading company employees to motivate and engage toward the company’s goal consistently. Thus, it is necessary for managers to design a program, procedures and policies to ensure employees’ engagement and working quality. However, not every employees’ activities and operation are predictable because of the unstable emotion and environment around the company in global context (Bartlett and Ghoshal 1995). Thus, this is the big challenge for top management to control the employees’ engagement and build up their relationship with the companies, as Bartlett and Ghoshal (2002) claimed that, communicate and create a good relationship with organization’s employees is the best way to understand the change in the market which can help manager take appropriate strategic approach to response the market (Bartlett and Ghoshal 2002).
According to Graetz et al. (2006), companies always live under unprecedented change, especially worldwide, there is a wide range of changes anywhere, any time and it is difficult to ignore the change. Due to the environment change, it may directly impact organization’s operation and companies’ executive managers have to adopt experiential action or different strategic approach to the response of the changing phenomenon if the companies want to survive and prosper in the market (Paton and McCalman 2008). It is important for top managers to adopt flexible processes and strategies approach in order to respond the rapidly changing market and environment (Bartlett and Ghoshal 2002). For instances, 3M company used to control and develop every decision making and strategies by top management but the time and environment changes cause them to transfer companies’ operation and try to coach and provide empowerment to front-line employees (Bartlett and Ghoshal 2002 and Bartlett and Ghoshal 1995). However, based on the limited experience and knowledge of front-line managers, they may not have the abilities to make decision, control and response the change (Bartlett and Ghoshal 1995). In consideration, the front-line managers or employees are the nearest positions to connect or build relationship with customers and recognize the change in the market (Bartlett and Ghoshal 1995). Hence, there is a challenge for top managers to take procedure and provide appropriate authority to the front-line employees. This also can be a good way to enhance employees’ engagement and company services qualities.
2.1.4 Issue 4: Profits Maximization vs. social responsibilities
Profits Maximization
Business must definitely focus on getting profit for the company because they need to keep operating the business to achieve their goal as a simple reason. The business concern whether the customers get value of what they purchase from the company; for example, save money, make more money, improve their lives or meaningful lives.
The perceptive of Friedman is swinging away on behalf of profit at all social and environmental costs and the profit support the business to grow. Meanwhile, he described that a company should not have social responsibility to the public or society because its only concern is to increase profit for itself and for its shareholders. Friedman said, “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profit so long as it stays within the rules of the game”. So, it is contradictory with the idea of corporate social responsibility at the cost of the stakeholder. Moreover, if the business is doing a good deed, then it will be a non-profitable company, such as UNESCO, IMF, and others. If they do not make profits for the business, then there is something wrong with what they are doing and they deserve to leave the business.
Social Responsibility
Nowadays, education has developed to the different level, and forced the business to be aware of social responsibility of the business in order to build the public relations and the green environment. Transparency is one of the major considerations for shareholders to invest in the company. Therefore, the companies can no longer afford to ignore their social responsibilities. Kaye (2012) described one reason why the business should be taking on more social responsibility is that “large institutions are failing us. Political strife and overwhelming debt crises are crippling governments around the world and, in turn, are infuriating their already hade citizens.” For example, BP was trying to invest millions of dollar into community investment programs and education programs in the world (BP 2013). After the oil spill in 2010, they seriously ensure to make more environmentally friendly as their responsibility (Luanda 2013).
The social responsibility of the business can play a role in order to protect the natural resources over the planet. The current economics prove that functioning without natural resources relations leads to the destruction of the ecological system. Hence, the role of social responsibility is going to protect the economic system (Vijayaraghavan 2012). Therefore, in order to be successful, a company should not do like what Friedman said only focus on their own profits, but also, taking the responsibility towards its stakeholders, for instance, customers and society, publicity and environmentally friendly.

3.1 RECOMMENDATION

3.1.1 Recommendation 1
To create a transnational structure, it is essential for businesses to analyse and understand the environment, by using PESTEL framework and SWOT analyses, of the targeted countries prior in going international. As a result, companies are able to determine the aspects that have to be adapted to the local needs and aspects that can be integrated globally. Moreover, companies are required to link their organizational operations and resources in order to leverage their ability. Thus, companies can accomplish global operation and national responsiveness concurrently (Bartlett and Ghoshal 1988).
Furthermore, Bartlett and Ghoshal (1987) stated, the selection on whether to centralize or decentralize is not based on specific industry but should be based on specific tasks. Therefore, businesses should build interdependence among subsidiaries in order to achieve creative and entrepreneurial subunits companies which are encouraged by the headquarters (Bartlett and Ghoshal 1998). However, to prevent any duplication of effort, it is essential for business to define a clear role and responsibility in order to minimize overlapping responsibility (Bartlett and Ghoshal 1988). For instance, Dell is able to match between their resources, abilities where, it has manufacturing in a diverse location such as, China, Brazil, Texas, etc, and it has set up in 47 different locations worldwide for delivery (Deresky 2011). Additionally, it is able to respond to the local needs in different country, as the system is highly adaptable (Deresky 2011).
3.1.2 Recommendation 2
In order to increase relations and understand the latest market trend in every location, top managers can offer a limited authority to the front-line managers and employees which not only can let the staff according to the change and provide the suitable process to the customer, but also can response of the change from the external environment (Graetz et al. 2006 and Stone 2011). In consideration, not all of the font-line managers and staff have abilities and experience to response the difference of change and some of them may not have knowledge high enough or skills to control and response the different situation (Bartlett and Ghoshal 1995).
Thus, audit employees’ performance also can assist top managers to understand their responsibilities and performance via appraisal review (Stone 2011). After that, top managers can offer a training course to the employees in order to increase their sensitivity towards market environment and management quality (Stone 2011). Therefore, top managers can offer different limited authorities to front-line managers when front-line managers received a series of training and outstanding appraisal review.
Due to the consistent changes, there would be a big gap between top managers and all front-line managers around the world, it is hard to control and manage local business process immediately and effectively (Bartlett and Ghoshal 2005 and Graetz et al. 2006). Hence, it is important for top managers to design a benchmark to the company front-line employees to follow and guide them to make a decision (Stone 2011). In addition, top managers can frequently monitor the front-line store physically in random. It not only can enhance front-line employees’ attention and engagement in anytime, but also increase the communication and relation between top manager and front-line staffs by exchanging different ideas, opinions or information.
3.1.3 Recommendation 3
Businesses are encouraged to have good deeds in doing their business, despite of maximizing profits. Businesses have to ensure that they are not involved in any type of abuses toward labour and environment. Hence, businesses have to conduct an effective audit on a regular basis, which review the entire organization, including their supplier and distributors. It is important to make sure that their distributor and their supplier do not involve in any illegal activities. Wal-Mart, Gap, Target and other big retailers were in a big trouble when their manufacturing building in Bangladesh collapsed. It seems that the building was old and not safe, however, the manufacturing forced the labour to keep on working, or else they will not get any salary for a month. Hence, the retailers fired the supplier, for involve in the blaze without the retailers knowledge.
Moreover, businesses should communicate their social responsibility to people in order to gain positive reputation. By justifying CSR initiatives, the company’s image will be improved, the brand will be stronger and the value of the share will be increased. In addition, companies should be able to plan a structured strategy in order to gain a long-term economic performance. For instance, DuPont has saved more than $2 billion by reducing energy use. Hence, businesses are able to gain competitive advantage by being socially responsible.

4.1 CONCLUSION

In summary, businesses have to make changes on regular base. The world keeps on changing and globalization cannot be avoided. Hence, businesses are required to analyze and understand all issues that are occurring in the world in term of the political, economy, sociocultural, technology, environment and legal environment. For example, the concern of stakeholders toward social responsibility has forced businesses to consider the well being of their employees and other social aspect in operating their business. Moreover, the latest issues that are faced by businesses are the alliance of the US and the EU and the rise of Asian countries. The alliance has encouraged businesses to go international, thus, businesses should make a few changes in operating internationally in order to be successful.
5.1 REFERENCES

“EU and US to launch free-trade alliance talks”. 2013. France 24. February 13. http://www.france24.com/en/20130213-european-union-united-states-launch-free-trade-talks-economy.
“Global Marketing Strategy: Standardization or Adaptation – Coca-Cola Case Study.” 2013. Powerful words. Accessed May 2, http://www.powerfulwords.co.uk/sample-assignments/global-marketing-cola-cola.php.
Australian Government. 2013. White Paper. Australia: Australia in the Asian Century. http://asiancentury.dpmc.gov.au/white-paper.
Bartlett, Christopher A and Sumantra Ghoshal. 1987. “Managing Across Borders: New Organizational Responses.” Sloan Management Review 29 (1): 43-53.
Bartlett, Christopher A and Sumantra Ghoshal. 1988. “Organizing for Worldwide Effectiveness: The Transnational Solution.” California Management Review 31(1): 54-74.
Bartlett, Christopher A and Sumantra Ghoshal. 1990. “Matrix management: not a structure, a frame of mind.” Harvard Business Review 68(4):38-45.
Bartlett, Christopher A and Sumantra Ghoshal. 1998. “Managing Across Borders:The Transnational Solution.” American Foreign Policy Interests: The Journal of the National Committee on American Foreign Policy 21(3): 20-22.
Bartlett, Christopher A. and Sumantra Ghoshal. 1995. “Changing the Role of Top Management.” HARVARD BUSINESS REVIEW, May-June.
Bartlett, Christopher A. and Sumantra Ghoshal. 2002. “Building Competitive Advantage Through People.” MIT SLOAN MANAGEMENT REVIEW, Winter.
Blenkinsop, Philip and Ethan Bilby. 2012. “EU, U.S. to start free trade talks”. Reuters, February 13. http://www.reuters.com/article/2013/02/13/us-eu-us-trade-idUSBRE91C0OC20130213
Blenkinsop, Philip. 2013. “EU-U.S. trade deal seen reaping rapid benefit”. Reuters, April 19. http://www.reuters.com/article/2013/04/19/us-eu-us-trade-idUSBRE93I0BQ20130419.
BP. 2013. Corporate Social Responsibility. http://www.bp.com/sectiongenericarticle.do?categoryId=9026901&contentId=7049221
Dahlberg, Elina, Lena Lindgren, and Anna Rosendahl. 2003. “Standarization and Adaptation in International Advertising of Consumer Goods.” Bachelor’s Thesis, Lulea University of Technology.
Ferreira, Manuel Portugal. 2011. “A bibliometric study on Ghoshal's Managing across Borders.” Multinational Business Review 19 (4): 357 – 375.
Graetz, Fiona, Rimm Malcom, Ann Lawrence and Aaron Smith. 2006. Managing organisational change. 2nd ed. Australasian edition. Milton, Queensland: John Wiley & Sons.
Kaye Leon. 2012. Triple Pundit: The Social Responsibility of Business is Here to Stay. http://www.triplepundit.com/2012/08/the-social-responsibility-business-stay/.
Luanda, Tim Webb. 2013. The Times Natural Resources: BP stocks up on controversial oil spill cure. http://www.thetimes.co.uk/tto/business/industries/naturalresources/article3749215.ece?CMP=OTH-gnws-standard-2013_04_25.
Paton, Robert A and James McCalman. 2008. Change Management: A Guild to Effective Implementation. London: SAGE Publications Ltd.
Stone, Raymond 2010. Managing Human Resources: Third Edition. Australia: John Wiley & Sons Australia, Ltd.
Vijayaraghavan, Akhila. 2012. Triple Pundit: The Social Responsibility of Business is Natural Resource Protection. http://www.triplepundit.com/2012/09/social-responsibility-business-natural-resource-protection/.
Why Starbucks Failed in Australia. 2008. Pajamadeen. http://www.pajamadeen.com/business-news/why-starbucks-failed-in-australia

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...The economic and social consequences of trade agreements have become a major area of research in recent years. Much of this has to do with regional economic integration, where countries in a geographic region, reduce and remove tariff and non-tariff barriers to the free flow of goods, services and production between each other (Hill, 2005). On the 1 January, 1994, such a trade agreement came into affect between America, Mexico and Canada. This was known as the North American Free Trade Agreement (NAFTA). This removed all barriers to the trade of goods and services within the member countries, the protection of intellectual property rights, application of national environmental standards and the establishment of two commissions with power to impose fines and remove trade privileges when such standards are ignored involving the environment, health and safety, wages and child labour (Hill, 2005). There is a belief that agreements designed to promote free trade within regions will benefit trade for all the countries involved, and also the rest of the world (Abbott and Moran, 2002). While regional economic integration, or foreign direct investment, is seen as a good thing, some observers worry that it could lead to a world in which regional trade blocs compete against each other. We are seeing the formation of many trading blocs continuing today as the need for it has become essential for countries and their firms to compete in the global market place (Seid,......

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International Management

...forces revolve around the interaction of industry drivers of globalisation and the different ways a business can be global. Understanding this interaction is key to formulating the right global strategy. Internal organisational factors play a major role in determining how well a company can implement global strategy. This paper provides a systematic approach to developing and implementing a global strategy. MOST MANAGERS have to face the increasing globalisation of markets and competition. That fact requires each company to decide whether it must become a worldwide competitor to survive. This is not an easy decision. Take the division of a multibillion-dollar company, a company that's very sophisticated and has been conducting international business for more than fifty years. The division sells a commodity product, for which it is trying to charge 400% more in Europe than it does in the United States. The price was roughly the same in the United States and in Europe when the dollar was at its all-time high. The company built a European plant which showed greater return on investment with that European price. But the dollar has fallen and, if the company drops its European price to remain roughly the same as the US price, the return on the plant becomes negative, and some careers are in serious jeopardy. So it is attempting to maintain a 40% European price premium by introducing minor upgrades to the European product. But its multinational customers will have none......

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International Management

...world is flat" - global competition is characterized by network sod international linkages that bind countries, institutions and people in an interdependent global economy. Economic integration help the lowering of trade barriers and facilitates trade between countries increasing the flow of goods and services, capital, resources, labour and technology around the world. "the invisible hand" of global competition is being propelled by the increasingly borderless world. Globality and Emerging Markets Globalization has narrowed differences in regional output growth rates, economic activities have increased mainly in China, India and Russia. Trade had grown by 133% (worth $54 trillion) in the last 15 years and is still growing. The 2007 FDI confidence index has shown China leading with 2.21, India with 2.09, USA with 1.86…. Fareed Zakaria (American Journalist specialized in international business) states that even though USA is a traditional industry leading in nanotechnology and biotechnology, it is declining and the "other" countries are picking up opportunities as their economic markets are growing because they provide growth markets for developed countries. Globalization is no longer synonym to Americanization due to the investment opportunities in other emerging countries. Apple vs Samsung, Budweiser, Subaru etc… Globalization is measured by economic factors but also by economic integration (international trade and FDI), technological connectivity (# of internet......

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...Uncertain Future International Management Instructor: Dr. Darlene Lee Andreas Weber is a good man with a decent career and a growing family, his divided between the two as this case study goes on. His is torn between the two most important things in his life, which is his career and family. He had wondered “How had it all come to this?” (Thomas, 2003). He had started from the bottom and worked his way to the top, through his patient of working in the bank in Frankfurt headquarters in Germany. It all began when he was given the offer to be part of companywide international development program by the Managing Director. The program focuses on the professional development of young , aspiring managers with the potential for senior management position at the corporate headquarters in the United States (Thomas, 2003). To him this is the stepping stone of his career, it is now or never, he had always thought he would have to take this kind of opportunity to open up new windows in developing leading job position in the company. The one week seminar had taken place in the top leading school in the United States, the CEO from Frankfurt was around to take part in the seminar. In the seminar, the CEO had highlighted that the goal of the bank is to expand into globalization in the near future. One of which is to start is by making the key value of globalization is to have the international experience to open up to future inspiring managers by pursuing in international career......

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...domestic environment. If companies and corporations want to be successful in today’s economy, then it is important for managers to have a thorough knowledge and understanding of different types of cultures, business ethics, and ways of leadership, and the implications that these differences will have on their businesses. In this paper, we will discuss the effects that globalization has had on managers with respect to culture, business ethics, and leadership. Culture Globalization has caused cultural diversity to become a fact of organizational life. In order for businesses to succeed, cultural diversity has to be taken into consideration when formulating business plans and strategies. Managers have also had to develop cross-cultural management skills, which are necessary to be able to manage employees and interact with clients of different cultural backgrounds (Saee...

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International Business Management

...1.0 Content No | Detail | Page | 1.0 | Content | 1 | 2.0 | Task 1 | 2 – 4 | 3.0 | Task 2 | 5 – 6 | 4.0 | Task 3 | 7 – 10 | 5.0 | Task 4 | 11 – 15 | 6.0 | Task 5 | 16 – 17 | 7.0 | Reference | 18 | 8.0 | Coursework | 19 – 25 | 2.0 Task 1 2.1 The various advantages and disadvantages Multinational firms is the firm that their businesses that conduct operations and sell to customers in multiple countries. Obviously, multinational corporations can provide developing countries with critical financial infrastructure for economic and social development. But, these may also bring with them relaxed codes of ethical conduct that serve to exploit the neediness of developing nations, rather than to provide the critical support necessary for countrywide economic and social development. When a multinational invests in a host country, the scale of the investment (given the size of the firms) is likely to be significant. Indeed governments will often offer incentives to firms in the form of grants, subsidies and tax breaks to attract investment into their countries. This foreign direct investment (FDI) will have advantages and disadvantages for the host country. There are some advantages while facing the multinational corporation. One of the primary advantages that multinational companies enjoy over companies that limit their operations to smaller geographical regions is that they have a larger pool of potential customers. According to the U.S. Small Business......

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...INTERNATIONAL BUSINESS MANAGEMEMENT ASSIGNMENT 2 Question 1 When the Mexico’s currency is pegged to the United States dollar, it means that the exchange rate is set and artificially maintained by the government. The rate will not fluctuate from day to day. The pegged exchange rate is usually used to stabilize the value of a currency against the currency it is pegged to which makes trade and investments between the two currency areas easier and more predictable. Pegged exchange rate system can also be used as a means to control inflation. The difference between a free/clean float, a managed float and fixed exchange rate systems of exchange rate is that: Clean/free float In the clean/free float also known as a pure exchange rate the value of a currency, which is the exchange rate is determined purely by market forces of supply and demand. Clean floats can only exist where there is no government interference, as would be the case in a purely capitalistic economy. Therefore, clean floats are a result of Laissez-Faire or free market economies.  Managed float In a managed float also known as “dirty float” the government or the country's central bank occasionally intervenes to change the direction of the value of the country's currency. In most instances, the intervention aspect of a dirty float system is meant to act as a buffer against an external economic shock before its effects become truly disruptive to the domestic economy. Therefore, with a managed or dirty float the......

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International Busness Management

...International Business Management Section A: Part One: 1. What is the series consideration for strategy implementation? 2. The major activity in global marketing is: d. All of the above 3. 3. The third „P‟ in the international marketing mix is: d. Place 4. The European Economic Community was established in____________ d. 1957 5. Environment Protection Act on______________ a. 1986 6. People‟s attitude toward time depend on: 7. Culture necessitates adaption of : 8. The legal term for brand is: All of the above 9. FDI flows are often a reflection of rivalry among firms in____________ 10. ISO certification is: d. Both (a) & (b) Part Two: 1. What do understand by „Inward-oriented Policies An inward- oriented policy, usually , means over protection. What is less obvious is that sheltering domestic industries puts exports at a great disadvantage because it raises the cost of the foreign inputs used in their production. Moreover, an increase in the relative costs of domestic inputs may also occur through inflation or because of appreciation of the exchange rate as import restrictions are introduced. In practice, the distinction between inward-looking and outward looking approaches gets blurred. Most of the less developed countries have employed both strategies with different degrees of emphasis at one time or another 2. What is „Factor Endowments Theory‟? The factor endowments is a “modern” extension of the classical approach and attempts to explain......

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...Difference Between Entrepreneurship & Small Business Management By Chris Joseph, eHow Contributor A small business enterprise requires skilled management to become successful. Depending on the nature of the enterprise, the entrepreneur and the manager may be the same person. In other cases, the entrepreneur may have little to do with the day-to-day operations of the business. The skills need to be a successful entrepreneur are not necessarily the same ones required to be a competent manager. 1. Leadership Skills * An entrepreneur is often a sole proprietor who does not employ others in her business, so she might not need to possess strong leadership skills. A small business manager is typically in charge of running a business operation, which may involve the need to manage a staff of employees. The entrepreneur who is also a manager faces the challenge of ensuring the profitability of her operation while effectively leading a group of workers. Focus * Entrepreneurship requires a business owner to look at the "big picture" pertaining to his business, which may include seeking new markets, establishing important contacts through networking and planning for future expansion. Small business management may be more focused on the day-to-day operations of the business such as dealing with customers, ordering supplies or overseeing production. In essence, entrepreneurship involves developing the plan while management involves the execution of the plan. ......

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International Management

...Chapter 6 1. What is strategy? What is strategic planning? * Strategy = the basic means by which the firm competes * Strategic planning = The more complex than domestic strategic planning because of more complex variables a. List the reasons a company would have if it wants to operate internationally. Have a two reasons a company would have is it wants to operate internationally . Which is Reactive/Defensive & Proactive/Aggressive Reactive/Defensive * Globalization of competitors * Trade barriers * Regulations and restrictions * Customer demands Proactive/Aggressive * Economies of scale * Growth opportunities * Resource access and cost savings Incentives b. List the seven steps in the strategic management process. * Define/clarify mission and objectives * Assess environment for threats, opportunities * Assess internal strengths and weaknesses * Consider alternative strategies using competitive analysis * Choose strategy * Implement strategy through complementary structure , system and operational processes * Set up control and evaluation systems to ensure success, feedback to planning 2. What is environmental scanning? What areas are most commonly focused in environmental scanning? Environmental scanning is a process that systematically surveys and interprets relevant data to identify external opportunities and threats. An organization gathers information about the external world, its......

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International Management

...Workshop 2 – Chapter 2 Managing Interdependence: Social Responsibility & Ethics In-class activity 1: Discussion questions Discuss the following in class: 1. In your opinion, should multinational firms be socially responsible in every country they operate in? Provide some examples of socially irresponsible activities by firms. 2. Discuss the common guidelines for code of morality and ethics in different countries. 3. Discuss the process for firms to combat corruption and minimise the risk of prosecution. 4. Discuss some common criticism of multinational subsidiary activities. In-class activity 2: Ongoing Semester Case Study – Businessville Hotel. The Beijing Businessville Hotel has been set up and the newly appointed Manager wants to furnish the hotel. His brother is a furniture dealer and tells the Manager he can get really good furniture from a friend in another country, and will give him a 40% discount on the order. The Manager is pleased and asks where the furniture is from and who is selling it. His brother says he cannot tell him that, but he knows it is good, new furniture. Review the legal and ethical issues and develop an argument that the hotel manager should or should not buy the furniture at a discount price from an unknown source. In-class activity 3: Case Study. Consider the case study ‘Nike’s CSR Challenge’ on pages 86-88 of your textbook and prepare discussion points for questions 1-5 at the end. In-class activity 4:......

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