As the global economy and business landscape, is changing rapidly therefore the need for impactful global business management has become all the more important. The businesses to persist as competitive they need to develop continuously to exploit the international markets as well as unfold the world opportunities. However, strategic business management needs to become more pro-active in the current chaotic world economic conditions because technology, production as well as consumption patterns are modifying by the day (Hill, Jones & Schilling, 2014). Therefore, global business management can be described as the basic principles and practices for managing the activities of the global businesses, the appropriate assessment of global business opportunities as well as the optimum allowances of resources to achieve the individual business goals in a global business environment (Adekola & Sergi, 2016). Moreover, the global competition has further pushed the managers to change how they operate at home and abroad. There are many challenges as well as opportunities that the managers faces when they are operating in a global business environment. The international managers need to carry out a wide research so on the county in which their business is being operated so as to avoid the challenges from political and legal, cultural and economic environment (Morschett, Schramm-Klein & Zentes, 2015). The aim of this essay is to discuss about the opportunities and challenges for the international managers along with choosing an Australian company named Qantas, to discuss the challenges they have faced for international competition and expansion.
Due to globalization, businesses, operating in the global environment will face both opportunity and challenges to survive the competition in the market. Businesses usually go global because of several reasons among which are reasons like the saturation of domestic markets as well as its decreased size, slow growth in their domestic markets, suppliers are more prone to follow the customers globally, pressure of competition, attractive international cost structures and growth rates and potential (Lasserre, 2012). Therefore, the global business environment is providing opportunities to sell their products in the markets other than the domestic markets and reach more customers worldwide. Thus, it can act as opportunities for the companies in the global business environment because they can increase their sales as well as profit margins if they can step out of their domestic markets and can be a part of the bigger markets in the if they operate globally (Voegtlin, Patzer & Scherer, 2012). High growth rates can be further obtained from the sales in the global markets. The companies can maintain market share if they can enter the global business environment. However, different countries have different growth rates and potential thus it can be another opportunity as the companies can operate differently from that of their existing ones in respect to their economic parameters. Most importantly global business environment can also help a company to enhance their prestige, which can help to reach a lot of customer.
Expanding the business globally can also help companies to produce more units, which will in turn decrease per unit cost (Ferraro & Briody, 2017). On the other hand, there are challenges as well which the companies’ faces in a global business environment and the very first thing they encounter is recruiting the right employee at the right position, as human capital is the basis of a successful global business. Therefore, proper coaching to the leaders and the executives are necessary for them to adopt themselves in the global environment (Luthans & Doh, 2015). Another challenge are the perceptions, needs, preferences as well as the factors which affects the decision making procedure of the customers which are different in the global environment than in the domestic markets. Communication as also acts as a challenge because of the varied time zones in the global countries. Innovation can also act as challenges because many global companies are still failing to back the ideas of their employees and so the employees are not motivated to take reasonable risks. Apart from these, the challenges that global businesses face are legal issues, language barrier and changing exchange rates (Washington, Okoro & Thomas, 2012). However, in a global environment the companies mainly finds the fluctuating exchange rates to be really challenging because expenses that have not altered in the global currency can all of a sudden cost notably more based on the growth, which is unanticipated (Luthans & Doh, 2015).
In a global business environment however, the role of managers have an overriding responsibility so that the organizations can maintain a global scale productivity and competitiveness. The international manager’s main goal is to attract the total benefit of united worldwide operations. International managers are those who are managing the organization’s global operations overseas (Deresky, 2017). Thus, they face challenges as well as opportunities as they are responsible for the foreign businesses. Factors, which mainly acts as an opportunity for the international managers are that firstly they get to interact as well as train local employees, which can help them their ways of working, preferences as well as culture. Then working in a global business environment will help the managers to shift in new technologies. Thus, it will give them an opportunity to enhance their technological skills. International managers will also have an opportunity get transfer from one global environment to another and explore different working environments (McFarlin & Sweeney, 2014). Moreover, assisting the local managers can also act as an opportunity for the international managers.
By working in global business environments, the managers can get a chance to improvise and implement new management systems in the organization. Global business environment will further help the managers to work in a area with increased productivity to that compared to his domestic market (Luthans & Doh, 2015). Apart from these the factors which are added opportunities for the managers in global business setting is that they get to work with diverse people in a cross-cultural environment which can further help them in learning various languages for an effective communication in the organization. Lastly, they can also get an opportunity to initiate appropriate rules and regulations in the global business setting (Comfort & Franklin, 2014).
Along with opportunities international mangers also faces few challenges and threats in the global business environment. Firstly, the managers need to be flexible enough to confirm themselves with the local environment otherwise low conformity with the local surrounding in the global business environment will be the initial challenge. Then another major challenge they might face is the cultural and language differences, which they faces stepping out from their home base (Stahl, Björkman & Morris, 2012). Moreover, international managers also lack the information regarding the unusual risks that exists in the host countries. International managers also face challenges if they are not enough knowledgeable regarding the countries laws or political scenarios in which they have established their business (Budhwar & Debrah, 2013). Thus, as stated in the GLOBE study that culture has an important role to play in effective managerial roles and so social values also has certain influences on the international managers, which are equally challenging for them. However, the global leadership learning pyramid has highlighted a structure which states that from where the challenges for the international managers comes from and they can occur from the issues related to globalization, history, culture as well as leadership, the national state patterns of culture, inferences for leadership and the adaptation of western theories for the cross-cultural utilization (BIrd, 2013).
ABC news updated their news report in 25 August 2017, has highlighted that Qantas net profit has fell over 17 percent to $852 million for the financial year of 2017 just after the passengers revenue has come down to 1 percent between the challenging conditions globally. However as per the investors they will gain a final dividend of around seven cents a share, unfreeze. The underlying profit of Qantas before the tax was their second highest on their records, which came in at $1.4 billion that was little better than predicted by the analyst. However, it was down near about 9 percent on the previous year’s record that is $1.5 billion. They have thus, boosted their earnings in 2017 by cost cutting and advancement in their organizations domestic business with repressed before tax earnings, which was increased by $67 million to $645 million (ABC.net.au., 2017). Therefore, the challenge that Qantas faces due to international competition and expansion is the steep discounting for the global airfares. However, Qantas international business has enhanced in the latter half of the year but before-tax earnings decreased by more one third of a percent to $327 million for this year. They mainly faced their competition from the airlines called Jester, which posted their second highest profit in their 13 years of establishment though they also had their earnings decreased from 2016 by 8 percent to almost $417 million. Moreover, from the recent news, it was further known that in spite of having, solid based and good records in their domestic markets in Australia, still they have gone through a financial loss internationally in 2011. Thus, they went ahead and collaborated with Emirates, which was a Dubai based airlines just to overcome the biggest challenge to gain profitability. Qantas mainly have issues in their international expansion because of three main factors, which are the rapid increase of fuel prices, the international downturn of their economy and lastly, their conflict with the unions. Apart from Jester, Qantas also have faced international competition from a Chinese airline known as China Southern Airlines as they had expanded their services in Australia as well so that they can associate with various parts of the country. Thus, because of this competitive environment they also lost the Chinese tourist who was visiting Australia. Apart from this Airline has also been challenged in situations that developed back in 2010 were they faced an industrial dispute among the workers unions of airlines and transport for industrial bargaining. Along with this natural disaster further affected their profitability in the same year. Thus, it was clear that international competitive business environment was tough for Qantas to survive (Sarham, McMurray & Kopanidis, 2014).
Therefore, international managers must know how to handle the conflicts arising situations for more effective processes. To handle such situations managers must motivate their employees so that they can manage their conflicts on their own because if the manager starts getting involved in every small issue to solve it then it might be recognized as favoritism for some and thus, turn away others from the manager. Managers must know how they can resolve the conflict rapidly from its roots otherwise; it can spread throughout the workplace and infect it entirely. Managers must have the patience through which they should listen to their employees and provide them the fact base side of their stories against the arising conflicts. They must further identify the real issues and help their employees to communicate in an effective way. For the managers in a global business environment the maximum of the conflicting situations that they face are due to cultural diversity in the workplace. Thus, managers must have a clear idea of cultural management so that it can help them stay culturally unbiased and eliminate stereotypes from their workplace.
Thus, to conclude this essay it can be said that management has an important role to play in the global business environment so that they can sustain in the competitive market and explore the opportunities in the world. International managers thus, have more added responsibility when as they have to operate in a foreign country because the increasing competition has been forceful towards them to operate differently in their home country and abroad. Managers face various challenges as well opportunities when they are operating in the global environment. Managers get exposures when they work internationally as they get to work with diverse work cultures, which is a huge opportunity for them where as working in a work culture with different mentality and culture can made manager’s face challenges related to communication, low conformity and language differences. Moreover, from the current news report of 2017 it has been highlighted that an Australian based airline organization named Qantas have severely faced challenges due to international competitions from other airlines like Jester and China Southern airlines. They mainly faced challenges in their international expansion due to three identified factors, which are increased fuel price, downturn of economy and conflict with the unions. Thus, managers must know how to handle the conflicts so that they can operate in an effective way.
References
ABC.net.au. (2017). Qantas flags 16-hour direct flights to London. Retrieved 14 December 2017, from https://www.abc.net.au/news/2017-08-25/qantas-flags-16-hour-direct-flights-london-profits-slip/8841572
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