Important International Management Theories †MyAssignmenthelp.com

Question: Discuss about the Important International Management Theories. Answer: Global management of people and organizations is a complex factor that calls for multilevel analysis of the underlying elements. International business suggests organizational strategies that organizations require in the management of operations in different countries. These have advantages and disadvantages. The international management theory explains how organizations cope with the management of people and business activities in the global environment (Zentess, et al., 2015). It explains the characteristics of the international market systems highlighting its opportunities and challenges. The report makes use of the globalization theory to explain the role of innovation, strategic human resource management and organizational tactics. In the business aspect, market entry strategies including forming joint ventures and franchising are used. In this discussion, the PEST analysis explains the macro-environment. Sustainability brings in the role of business ethics in the market system as a way of controlling the widespread use of natural resources. The essence of this mixed approach to managing globally is to highlight the international management practices their strengths ad weaknesses(David, 2011). Global organizations need a holistic approach that can address all operations. In an effort to provide answers to the existing solutions, an organization needs to address and manage change effectively. PEST Analysis The PEST analysis by Fred Aguilar defines the brands spheres of influence using the Political, Economic, Social, and Socio-Cultural and Technology factors(Frue, 2017). In order to compare with its strengths and weaknesses, an organization needs to consider: These are the national elements defining a region or a country. It includes the government bodies, policies and bureaucracies. It covers the legislation required to start and run a business. It may also encompass environmental policies and privacy protection for customer. Political ideologies in a region may foster or hinder a business. Corporate policies, economic status and taxation rates are some of the underlying elements to consider. Multinational corporations seeking to employ workers need to look at the availability of the skills, rate of unemployment and infrastructure. Culture is one of the barrier to new market entries. An organization needs to weight the societys beliefs, language effect, and lifestyle in order to understand the consumer. Failure to do this may lead to rejection or resistance from the locals. Localization helps organizations to emerge successful (Cullen Parboteeah, 2013). Technological innovation form a significant part of global business that brands cannot ignore. It covers communication devices, the internet, software applications and management devices(Dunning, 2013). Managing people It is impossible to run an organization without people. The people factor involves employees and consumers. These influence the effectiveness of an organization. Intertwined in this is culture and the management of technology. These are the two most dominant factors affecting global management today. Culture in the workplace and consumer culture have similar influencing factors. The global economy requires intercultural competencies (Moran, et al., 2014) These are skills required for the success of an organization. Contemporary human resource practices encourage employees to develop these skills as a survival tactic in the highly competitive markets. Hofstedes cultural dimensions theory provides a framework for this phenomenon based on values and behavioral factors(Chhokkar, et al., 2013). Effective communication in a new environment requires proficiency in the local language and an understanding of their values and practices. It facilitates for successful negotiations, management of people and marketing to consumers. Business etiquette in the emerging markets is very important. Intercultural competence prepares leaders and professionals for the new markets. An effective organization needs diversity in the team. However, the management of the diversity is critical for its success . Employees feel comfortable working in their home environment. In cases where they have to provide their services abroad, the organization needs to put in place strategic management practices for the move. Human Resource practices continues to evolve in order to meet the global changes. SHRM encourages the development of a conducive work environment for workers(SHRM, 2015). Multinational organizations hire competent professionals in order to maintain the value offered by the organization. The process of tapping into these skills involves the use of cross border recruitment agencies. Employees traveling for work in a foreign country need special care. If they have families, proper mechanisms should in place for their wellness. Rewards systems should feature travel allowances, security details, and competent health care. Organizational structures in the global markets sometimes changes. In the event of mergers or acquisitions, the employee needs psychological support(Sinkovics, et al., 2011). The monetary and non-monetary allowances serve as motivational factors that convince employees to move out of their comfort zone. This is part of talent management, which deals with staffing, staff retention, performance and compensation in a multinational corporation(Scullion Collings, 2011) . Sometimes training is necessary to equip the employee with the new changes. A good working environment requires interpersonal skills, which come from the social and work environment. The Human resource department needs to offer psychological support factors, which bridge the gap to prevent loneliness(Lengnick-Hall, et al., 2011). Technology Effect The global environment comprises of different organizations. Technology and innovation provides a platform for organizations to excel. Employees need training on how to use the internet, software applications and digital technology equipment(Scullion Collings, 2011). Coping across border successfully requires training in advanced technology because global organizations use technology for most basic operations such as office applications, presentation skills, social media, coding, use of mobile digital devices and troubleshooting (Angeles, 2015). A clear understanding of communication tools and devices is a plus. Organizations also provide training for workers in order to upgrade their professional skills. Professionals who work in global organizations find it hard to leave because of the training opportunities and exposure to the best organizations. The world of innovation is full of ideas helping the individual to improve on personal and professionalism. Global enterprises use knowledge management approaches to handle and disperse information(Liebowitz Frank, 2016). Cloud computing is an important application for information sharing. The widespread use of e learning in organizations saves on costs. Videoconferencing is also popular in training, interviews and organizational updates. Technology has pros and cons. Since technology is a necessity, coping with its ills such as cyberbullying is also important. Mitigating its risks is one way to deal with the effects. Managing Organizations Organizations which plan to penetrate a new market need a market entry plan because of the uncertainty in the global market(Zott, et al., 2011). The strategy directs the organization on the best method for introducing the brand to the new consumer. Carrying out a market research helps the organization to identify the existing gaps in the new market. Currently, the emerging markets of China, India and Saudi Arabia have become hot spots for investments. However, some organizations may succeed in these environments while others fail because of the strategy. Issues of concern include sourcing for products, investing through joint ventures and marketing the brand. Market entry plans for product include a marketing plan. An example is the 4P plan for the products and 7 Ps for the services. In this strategy, the brand makes a mapping of the most appropriate pricing, product, place and the ideal promotion. Service brands like McDonalds venture into a new region with consideration for the phy sical environment, people, and processes(MarketingMix, 2017). A marketing mix is popular because it blends the important factors in order to generate the best map for a business plan with the right targets. It looks at the needs of a customer in the new environment, for proper pricing and delivery mode. Market entry plan with a comprehensive outlook of the new environment has a risk management plan. The BCG matrix tries to understand the market share of the existing brands against a new entrant. It provides brand portfolio and profitability for competitors in order to understand how to generate higher profits. This analysis is also good because it projects the market growth rates. This is an ideal technique for market penetration and diversification strategies(Jurevicius, 2013). The BCG matrix works together with other approaches like the McKinsey Matrix, which is ideal for businesses that have diversified products and services(Shen, et al., 2015). It provides a comparison of different units for checking the attractiveness of the industry and the brands strength to compete in it. These tools improve profitability while revealing the risks involved in the uncertain market. Understanding the customer in the new market calls for numerous tactics. Benchmarking recognizes the trends in t he landscape for the development of strategic processes(Bilbao-Osorio, et al., 2013). The Vrio framework of resource capability provides an investor with information on how to invest the valuable, rare, costly to imitate and the organized to capture value in order to gain a competitive edge(Andersen, 2011). This makes it possible for a company to tap into the natural resources for the present and future success. Unknown organizations need partners from the region in order to succeed. Local consumers have trust in ideas that are familiar to them. Some regions like the EU remain loyal to traditional products. Another reason for starting with the joint kind of partnership is for resource exploitation(Cao Zhang, 2011). A manufacturing organization that discovers raw materials in a developing nation needs a collaboration for mutual benefits. Large brands form partnerships with smaller ones in order to provide financial support. On the other hand, a smaller company may enjoin itself to a reputable brand in order to gain popularity. Associating with a local organization smoothens the set up process and prevents legal violations. This strategy also creates a competitive edge as seen in the case of technology world(Wall, 2015). When making determinations about a joint venture, a horizontal integration serves as a source of strength for the business. This allows organizations in different productions but the same industry to collaborate for a common goal. For instance, Microsoft merger with Xerox, a photocopier company for regional penetration(Markoff, 1999). On the other hand, a vertical integration happens when a company decides on full control of the industry through its value chain. This is common in the technology industry where smartphone producers like Apple own their distinct innovation. This is a common trend in the lucrative industries like oil production where there channels of distributions have secure and dominant market share owners(Gnawali Park, 2011) Multinational companies penetrate the new markets to duplicate their products and services in a new country. In this case the brand adopts common merchandise, marketing, training and operational tactics in the home country. Having a distribution joint in a foreign land also has its advantages and disadvantages(Entrepreneur, 2017). Entrepreneurs who wish to enter into franchising need to tread carefully in order to avoid financial complications. Popular global franchised brands include Shell petroleum, McDonalds and Subway. In this case, companies agree to carry the brand name and trademarks at a fee and within specified contract period. However, national countries have rules for franchising in their territories(franchise.org, 2011) Dealing with Competition One of the characteristics of the global market system is its competitiveness. New entrants and market giants interact. Dealing with this competition needs strategy because many large organizations have fallen in the face of the free market system. The Porters five forces theory describes ways in which to survive in the competitive world(Prizeman, 2011). Presenting a business strategy, the theory suggests an analysis of the profitability using core competencies. A unique business approach needs to consider the rivalry in the industry, the threat from new entrants, threats from substitutes and the bargaining power of suppliers. This careful approach allows a small business owner to consider whether it is wise to enter into the European markets and what trends rule the region(Bond, 2017). Sustainability is another important aspect of cross border business. It covers more than the environment perspective(Kruschwitz, et al., 2011). Most countries support brands that seek environment friendly investment. Organizations also require unique ideas that competitors cannot duplicate easily. This calls for constant innovation and research to delve into the brand reputation, revenue flows and customer satisfaction. The creation of a variety needs an analysis of complementary products and the integration. It also measures efficiency and value chains(Gereffi, et al., 2016). E-commerce provides a platform for business based value chains(Laudon, 2013). This is a best practice that presents economic and social benefits. As a social practice, it guides investment organizations on how to give back to the community. The value of a brand manifests through its ethical and economic performance measures. As the world continues to become a busy and competitive hub, it affects natural resourc es because producers depend on nature for energy, minerals and existence. Effects of the carbon emissions being released into the environment is already visible. As a result, organizations have taken it upon themselves to monitor environmental issues for protection. However, the challenge lies in the individual role of the companies in providing accountable information of their activities(Chu Majumdar, 2012). Conclusion Managing across borders involves international relations. The global environment is highly competitive and dynamic. Understanding it calls for strategic plans made of theoretical ideas. These are proven ideas that large and small organizations consider in order to penetrate and gain a competitive edge. Based on the high competition, and dynamic market system change is inevitable. Although there are numerous opportunities in the global market challenges also exists. These arise due to the political, economic, sociocultural and technological factors from the external market. The PEST analysis helps an organization to weigh its strengths and weaknesses in preparation for the global market. To survive in the market economies, organizations must understand the people and organizational factors. The report breaks down the complexities of the international environment using international management principles that facilitate for the success of the organization. Small companies have a chance to compete globally because of technology, which exposes them to consumers from across the globe. E-commerce is one of the innovative means through which an organization can participate in the system. Ideas for market entry include the joint venture approach, which joins large companies with the smaller ones. Market dominance also characterizes the global market therefore; brands need a way to overcome the competition through effective management. SHRM provides a guide on how brands can make employees part of the winning team. Branding techniques provide solutions for managing the consumer trends. Among these is the 4P and 7P, which guides on how to price and promote products. The mention of sustainability is a blend of economic and social benefits that organization gain by providing value in their undertakings. Technology in contemporary operations is necessary and its fruits can only manifest if its tools and devices have proper management. Therefore, an integration of different theories gives solutions on some of the challenges to expect in the process of interacting globally. These are simple ideas for the present and future organizations. Frequent research into the topic of i nternational management promises solutions to address solutions as they arise. Bibliography Andersen, J., 2011. Strategic resources and firm perfomance. Management Decision, 49(1), pp. 87-98. Angeles, S., 2015. Five technology skills skills everyone needs to have. news.co.au. Bilbao-Osorio, B., Dutta, S. Lanvin, B., 2013. The global infromation technology report, s.l.: World Economic Forum. Bond, D., 2017. Luxury magazines finally face digital headwinds. Financial Times, 4 April. Cao, M. Zhang, Q., 2011. Supply chain collaboration: Impact on collaboration advantage and firm perfomance. Journal of operations management, 29(3), pp. 163-180. Chhokkar, J. S., Brodceck House, R. J., 2013. Culture and leadership across the world: The GLOBE book of indepth studies of 25 societies. s.l.:Routedge. Chu, S. Majumdar, A., 2012. Opportunities and challenges for a sustainable energy future. Nature, 488(7411), p. 294. Cullen, J. Parboteeah, K., 2013. Multinational Management. s.l.:Cengage. David, F., 2011. Strategic management: Concepts and case. s.l.:Pearson, Hall. Dunning, J. H., 2013. Multinaionals Technology Competitiveness. s.l.:Routledge. Entrepreneur, 2017. Franchising. The Entrepreneur. franchise.org, 2011. International franchising laws. Franchising. Frue, K., 2017. Who invented PEST analysis and why it matters. [Online] Available at: https://pestleanalysis.com/who-invented-pest-analysis/ Gereffi, G., Fernandez-S K, 2016. Global value chain analysis: a primer. 2nd ed. s.l.:s.n. Gnawali, D. Park, B. J., 2011. Cooperation between giants: Collaboration with competitors for technological innovation. Research Policy, 40(5), pp. 650-663. Jurevicius, O., 2013. BCG growth-share matrix. [Online] Available at: https://www.strategicmanagementinsight.com/tools/bcg-matrix-growth-share.html [Accessed 25 August 2017]. Kruschwitz, N. et al., 2011. Sustanability and Competitive Advantage. MITSloan Management Review, 51(1). Laudon, K. C. T. C. G., 2013. E-Commerce. Fourth ed. s.l.:Pearson. Lengnick-Hall, C., Beck, T. Lengnickk-Hall, M., 2011. developing a capacity for organizational resilience through strategic human resource management. Human Resource Management Review, 21(3), pp. 243-255. Liebowitz, J. Frank, M., 2016. Knowledge mangement and e-learning. s.l.:CRC press. MarketingMix, 2017. The Marketing Mix. [Online] Available at: https://marketingmix.co.uk/ [Accessed 25 August 2017]. Markoff, J., 1999. Xerox-Microsoft deal links variety of technologies. New York Times. Moran, R. T., Abramson, N. Moran, S., 2014. Managing cultural differences. 9th ed. s.l.:Routledge. Prizeman, T., 2011. Apply five basic forces to the four big audit firms. Financial Times. Scullion, H. Collings, D., 2011. Global talent management. s.l.:Routledge. Scullion, H. Collings, D., 2011. Global talent management. s.l.:Routledge. Shen, L., Zhou, J., Skitmore, M. Xia, B., 2015. Application of a hybrid Enthropyy-Mckinsey Matric method in evaluationg sustainable urbanization: A China case study. Cities, Volume 42, pp. 186-194. SHRM, 2015. Understanding workplace cultures globally. [Online] Available at: https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/understandingworkplaceculturesglobally.aspx [Accessed 25 August 2017]. Sinkovics, R. R., Stefan, Z. Verena, K., 2011. Between merger and syndrome: The intermediary role of emotions in four cross border M As. International Business Review, 20(1). Wall, M., 2015. Shopping tech firm Powa in major Chinese Joint Venture. BBC, 16 December. Zentess, J., Klein, S. H. Morschett, D., 2015. Important International Management Theories. Strategic International Management, pp. 123-143. Zott, C., Amit, R. Massa, L., 2011. The business model: recent developments and future research. Journal of management , 37(4), pp. 1019-1042.