Discussion of International Management (Essay Sample)

Intercultural Management
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International Management
Management can be defined as using available resources to achieve the required result. International management can, therefore, be referred to as the practice of controlling and managing business operations for an organization beyond the boundaries of one nation. It is a practice of managing the business of the organization in more than one country. International managers have a mandate to learn the culture, economic, language, and political environment of the nations in which multinational organizations actively invest and trade in. They also practice analytic skills needed to integrate effective management policies and strategies to enable the firm gain a global competitive edge. International management requires managers and operations of the organization to have the skills and knowledge beyond the ordinary business expertise, such as understanding the local customs and laws of the country, and the capability to perform business transactions involving multiple currencies (Boddewyn, 2004). This paper review serves to discuss the driving factors and reasons for international marketing, and various strategies for integrating with the global market.
According to Yeung (2000), Globalization can be defined as the integration of political, cultural, economic activities, and increase in growth across many nations of the world. As early as the 1990s, globalization was illustrated as the primary stage of development in international management. It would require the skilled managers to cope with the responsibilities and challenges of a dynamic global market. Globalization has significantly impacted the business environment internationally with corporations becoming a major concern to institutions and governments through international management. The ever increasing rates of technological advances, change, and communications have affected how business is done from a local perspective to an international level thus enhancing global competition. Some other factors that have contributed to the increase of globalization over the past two decades include; the advancement in technology, computers, biotechnology, robots, and information technology. Globalization helps maintain costs and prices of products through competition. It also boosts the economic and standards of living for people living in developing countries as more money are invested in these nations (Audretsch & Bonser, 2002). In order to have a competitive advantage, international managers had to incorporate new approaches such as; training and employment to their new environment in a cultural, political, and socio-economic context. An example is the move by multinational organizations to India from Europe and the US. This has led to benefiting from globalization and has facilitated the implementation of cross-cultural training (Branine, 2011).
Localization or regionalization emerges as a response to globalization. Localization can be defined as the process of integrating networks within a regional boundary and accessing the global market. It involves organizations having to specialize their products for a specific region. Technological growth has significantly affected localization by enabling the transportation of goods to different regions at lower costs. Some factors to be considered when regionalizing a product include; cultural differences, language, and legal measures. Globalization and localization have both affected the price discrimination of goods globally. Both strategies can effectively work in international management if used with the appropriate products (Audretsch & Bonser, 2002).
The threat of competition is the overall reason companies go international. Companies develop products for consumer consumption in order to remain competitive by building a strong business position in world markets. Companies such as IBM and AOL are opening new markets in Europe thus attracting new investment capital. One of the common reasons of any company to go international is ‘global competition.' Companies who have established their business in foreign countries over a period of time have a competitive advantage than a company trying to enter the market. Lower costs also give these companies advantage in a global perspective. The second reactive reason is ‘trade barriers'. Barriers such as local policies, tariffs, and other restrictive trade measures make it expensive to export to foreign markets. Regulations and restrictions by a company's local government cause firms to seek less restrictive measures on foreign environments. The fourth reactive reason is customer demand. Some operations in foreign countries start as a result of customer demand. Customers in foreign countries may request that their preferred companies operate locally in order to have control over their choice of products and services (Deresky, 2011).
Global integrative strategies refer to the production of products of a certain quality and type on a global perspective based on price competition. Some companies adapt faster to the process of global integration while others evolve to multinational organizations. Basically, companies begin with small-scale exportations then large-scale exportation and proceed to assembly. These companie