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Why globalization is important
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INTRODUCTION: Enlarged competition and relaxed economic restrictions have given rise to the development of the force of globalisation, which subsequently have led to multinational companies and managers. In 2000, the global trade in exports and imports extended 25% of the world GDP (Govindrajan & Gupta 2000). The rise of globalisation speculates a number of imperative tests to business seeking international incidence, more notably, to these business’s global managers to successfully help achieve this presence. Numerous strategic facets must be measured prior to commitment at an international level, and afterwards. Continuous flexibility is essential in order to adapt to the fluctuating patterns at local, regional and international levels. This essay pursues to detect the main issues affecting international managers including, political risks, cultural issues, strategic choices and globalisation. POLITICAL RISK: Wells (1998) defined political risk as the challenges confronted by investors that end from some sort of government action, and sometimes inaction. Political risk in this context implies undesirable business consequences because of the behaviour of governments and public sector organisations (Suder 2004). The most essential political risk has been the peril of nationalisation (Brooks et al 2004). The dangerous threat of nationalisation occasionally takes slighter forms as when, in times of predicament, some governments opt to exchange rate controls. Alternative source of political risk are wars or civil unrest. Nevertheless, Jones (2001) notice that dramatic events such as wars and assassinations are rare in the international business arena. Additional political risk is characterized by corruption practices (Hill 2005).... ... middle of paper ... ...lable at: http://news.bbc.co.uk/hi/business/6279679.stm - Suder, G.S. (2004). Terrorism and the International business environment: the security – business nexus. Edward Elgar publishing. - Stiglitz, J. (2002). Globalisation and Its Discontents. London: WW Norton - Takyi – Aseudu, S. (1993). Some socio cultural factors retarding entrepreneurial activity in sub Saharan Africa. Journal of Business Venturing, 8, p. 91 -98. - Vitell, S.J., Saviour, L., Nwachuckawu, A. & Barnes, J.H. (1993). The effects of culture on ethical decision making: An application of Hofstede’s typology. Journal of Business Ethics, 12, p.753 -760. - Wells, L.T. (1998). Good and fair competition: Does the foreign direct invest face still other risks in emerging markets? Malden, MA: Blackwell. - Yip, G.S. (1998). Global strategy in a world of nations?, Sloan Management Review, Autumn, p. 29 -41.
Political risk is a sort of jeopardy confronted by corporations, investors and administrations. It is a risk that can be managed and understood with coherent investment and foresight. Generally, political risk refers to the difficulties governments and businesses may encounter as a consequence of what are usually mentioned as political verdicts or any political alteration that changes the anticipated consequence and worth of a certain financial action by altering the likelihood of attaining business aims.
Valaskakis, K. (1998). The challenge of strategic governance: Can globalization be managed? Optimum, vol. 28, no. 2, pp. 26-40.
Simonsen, C. E., & Spindlove, J. R. (2000). Terrorism today: the past, the players, the future. Upper Saddle River, N.J.: Prentice Hall.
Globalisation allows individuals, groups, corporations, and countries to reach around the world farther, faster, more deeply, and more cheaply than ever before. Most large local companies regard globalisation as opportunity, thereby exploring overseas markets for maximum market share and optimum business strategies. However, managers would face a series of challenges caused by leadership models, cultural backgrounds, political and economic risks, HR management, etc. To study multinational management skills is very useful for my future career. In this essay, I will set goals for this subject, identify the skills I have honed and need to improve, and explain my strategies for achieving goals.
Multinational enterprise (MNE) is “a company that is headquartered in one country but has operations in one or more other countries” (Rugman and Collinson 2012, p.38) that has at least one office in different countries but centralised home office. These offices coordinate global management in the context of international business. MNEs have increasingly essential influence on the development of the global economy and coordinate with other companies in different business environments. However, there are many issues involved with how MNEs operate well overseas, especially in emerging markets (EMs) (Cavusgil et al., 2013, p.5).
The global marketplace is an area that is very difficult to be successful in. It is for this reason that businesses must compete with each other in an attempt to pip their opposition and gain a competitive edge amongst the constantly changing global environment. At the heart of this are managers and leaders to ensure that the company is able to stay on track whilst maximising revenue and limiting production costs.
...rdichvili, Alexandre, et al. "Ethical Cultures In Large Business Organizations In Brazil, Russia, India, And China." Journal Of Business Ethics 105.4 (2012): 415-428. Business Source Complete.
Employment, environment and cross cultural implications in ethical decision making Work of an individual affects greatly his ethical decision making process. Factors like stress of the work, duration and salary play an important role in decision making. If the work is more stressed and employee feels pressure then he cannot make a good decision. Organization culture is likely to have a great impact on decision making. Motivation during work encourages the person to do more and give better decisions.
Ahlstrom, D., & Bruton, G. D. (2010). International Management: Strategy and Culture in the Emerging
In today’s global market, more than before, multinational enterprises [MNEs] have been expanding their operations internationally. This rapid growth requires suitable staff to run new units in foreign countries. Leadership of these new units and MNEs in general requires a global mindset. “Each unit requires executives that navigate economic complexities, cultural ambiguities, and political challenges” (Daniels, 2013) while running an efficient and productive unit. MNEs need staff with international business background and understanding in order to have a successfully operated unit. There is shortage of leaders for the world stage. There are many reasons on why pursuing international business is the right thing to do, tremendous growth potential and high demand are to mention two. There are benefits to be a leader of an international business unit such job satisfaction and better life experience. On the other hand, there could some down fall from being away from home such as being forgotten by the home office and being downgraded once coming back home and high rate of turn around.
“Today, we do not live in a civilization, we live in a ‘globalisation’ – with a globalisation of resources, a globalisation of business activity and a globalisation of humanity” (Schermerhorn et al., 2014, p. 151). This large scale societal evolution of the global economy of late has resulted in the need for managers to possess a transnational outlook, be competent in working with other cultures, be more informed of international developments (Schermerhorn et al., 2014, p. 90), as well as be able to successfully manage the expansion of their firm into international territories by respecting the culture of the host country, and through the use of expatriates. These are employees who live and work in foreign countries on short-term or long-term assignments and, as a result, gain valuable international and corporate experience (Chew & Debowski, 2008, p. 4). Globalisation signifies the “interdependence of resource flows, product markets and business competition” (Schermerhorn et al., 2014, p. 89) on a global scale. The expansion of international corporations into uncharted competitive territories has brought managers of these MNCs to face a vast number of greater challenges than before, such as problems that arise from managing expatriates and repatriates, management across cultures, managing cultural diversity, the transference of knowledge across cultures, and the need for alterations to the existing management practices. This essay will further examine the aforementioned challenges that managers are required to surmount to succeed in today’s global economy.
The increase of globalisation has presented businesses with unexampled opportunities for global investment and trade. Deemed by Rosabeth Moss Kanter as “one of the most powerful and pervasive influences on nations, businesses, workplaces, communities and lives” (1995, as cited in Schermerhorn et al., 2014), globalisation has allowed many multinational corporations (MNCs) to expand coordination and control of their activities to foreign countries by forming subsidiaries and joint ventures. This is necessary to establish a presence in the increasingly competitive international market and is now a pre-requisite for business survival and growth. To maintain and improve their global competitiveness, MNCs must manage both local and foreign enterprises effectively. This concept of international management can be simply described as the “management in organisations with business interests in more than one country” (Schermerhorn et al., 2014, p. 90) and is applicable to MNCs, who are defined as organisations with “extensive international operations in more than one foreign country” (Schermerhorn et al., 2014, p. 101). Undeniably, administrating operations on such a vast basis will present challenges. These challenges have been thoroughly analysed in numerous studies, which have also offered methods to develop effective policies and practices that allow MNCs to best control these factors. Despite the immense range of suggested solutions made available, these difficulties remain a steadfast force that managers must consider in every decision made for the company. Whilst the foundation of each individual challenge seemingly differs so greatly from one another, there is a connection between most that can be referred back to cultural difference...
- Volberda, H. Morgan, R. Et al. 2011, “Strategic Management: Competitiveness and Globalization”, Cengage Learning EMEA ,Pg 244-258
Hitt, M., Ireland, and Hoskisson, R. (2009).Strategic management: Competitive and Globalization, Concepts and Cases. In M.Staudt & Stranz (Ed).
Stonehouse, G., Campbell, D., Hamill, J. & Purdie, T. (2004). Global and Transnational Business (2nd ed.). Chichester: John Wiley & Sons.