Managing Multinational For Global Environment: Challenges And Opportunities

International Challenges and Possible Opportunities for Managers Operating in a Global Environment

Discuss about the Managing Multinational for Global Environment.

International marketing has its challenges and companies have realized that there are a lot of challenges when a company goes international.  In this paper we are going to analyze the challenges and opportunities that a manager of a multinational company faces when setting up a company in the international markets (Bernaciak, n.d.). Companies have challenges when they are faced with multiple challenges both internal and external. Marketing executives sometimes get it wrong when launching the company’s products in other countries, this is because they often think that the needs of the consumer in the foreign country are the same as those in the home country.

Advertisement influences consumers to buy products. Companies rely on print and digital media such as magazines to create awareness on a company’s goods and services. Most of these  advertisements use humor  to get the attention of the consumer (Boxall, & Purcell, 2016).  However, what may be considered funny in one culture may be considered an insult or confusing in other cultures. This is one of the challenges of a manager who is sent in another country because what motivates consumer to buy services and products of a company varies from country to country.

Business executives working in foreign countries find numerous barriers of effective communication.  These may slow down the pace of negotiations. For example, Americans often like hurrying through negotiations , while in other countries, they emphasize on building relationships before considering the deal. In some countries, business executives may value more of facial expressions rather than the words. In some cases, there is complete lack of understanding due to the differences in languages therefore needing a translator in some situations (Briscoe, Tarique, & Schuler, n.d.).

Even with the emergence of technology such as video conferencing, managers in foreign countries may prefer establishing personal relationships when conducting business. this call for business executives to travel often  which may have a huge cost implication especially to small companies. It may also take a lot of time by having business executives out of office for extended periods. Coordination of projects where times there are time zone differences becomes difficult. Another challenge that managers who work in foreign markets encounter is finding trusted partners (Cooke, 2003).  When a company wants to sell its products in a foreign country,  it must hire trusted sales representatives who are based in the country they want to start selling their goods and products in. Sometimes it’s difficult to find trusted personnel in the foreign countries which becomes very difficult for the company to operate in.

Challenges

This is another major challenge for managers who work in foreign countries. As we know that the success of a company is determined by its human resource, it is critical for the manager to hire competent and skilled workers to work for the company (Hitt, Ireland, & Hoskisson, n.d.). In some countries, especially the developing ones, finding skilled personnel may be challenging. For example, finding skilled personnel who can be trusted in carrying out a technical work is challenging enough. Thus the companies are forced to use their resources to train the staff that they intend to hire which is an additional  cost  to the company.

Competition is yet another challenge for multinationals. The manager may find it difficult to compete with already exiting companies (Hitt, Ireland, & Hoskisson, n.d.). Consumers prefer  services and products of companies that they are already familiar with. It therefore becomes difficult for   managers of companies setting up in foreign markets to find the market accepting their products. 

For Multinational companies, it is cheaper to higher labor. Local labor is considered cheap as compared to hiring an expatriate.  One executive in Procter and Gamble said that hiring Chinese is equivalent to 1/3 of non Chinese hiring.

Cheap raw materials: Mangers of multinationals find themselves producing their goods cheaply because of the availability of raw materials which ia cheap. They also get economies of scale when buying the raw materials.

Qantas Airways is the Australian flag carrier and the largest by the fleet number in Australia, international destinations and international flights (Heidenreich, 2012). The organization was founded in 1920 and is the third oldest airline globally having almost a century in operation. But despite the rich history and the success written in its history, Qantas Airways has struggled in recent years and the flying kangaroo has had it rough for the last couple of years. The airline is based in Sydney, Australia and carries at least 14% of all passengers flying in and out of the country.

According to each level of the systemic approach and thanks to the interaction between all of them, I will focus the present work from the Micro level in order to see how the requirement of greater efficiency of the companies is a fundamental part of the competitiveness

“To know is to compete with advantage”

The most significant change in competitiveness of the company is the entry of other budgeted airlines operating in Australia. Many of the companies that are entering the aviation industry have come to change the dynamics of aviation in the country. Many of these young airlines are owned by billionaires and companies with a lot of liquidity thus making it easier to finance their entrance with penetration ease into the market (Papadopoulos, 2010). Qantas has had it very rough during the financial down turn which was global. The world economic slump affected all the nations but ultimately companies with a bigger global outlook took a bigger hit than smaller companies. Aviation industry was affected the most with stock shares plummeting. Qantas shares shed a 51%, a significant part of their capital was lost (Heidenreich, 2012).

Cultural Nuance

Shareholders lost a lot of value and money worth during the period. With these turn of event, the company has hard to go slow on their expansion strategies. There are other factors affecting the organizations ability to compete.  Airlines such as fly emirates and KLM have come to compete for the same number of customers that were originally served by only Qantas airways. With reduced prices and better services, the two have been able to take over the international routes that were once a stable of Qantas.

Qantas started to concentrate on domestic routes that it is dominating (Sjursen, 2000). The other challenge faced by Qantas is the staff turnover especially the skilled pilots and engineers who are running to seek better pay in international companies. Expansion has become so difficult due to the inability of Qantas to have a lot of cash for expansion. Mismanagement by the companies executive has also led to the airline struggling and the reason for its inability to go global. Consequently, world oil prices have risen in the recent past (Papadopoulos, 2010). Operational cost of most airlines in non OPEC countries, Australia included went up. High operational costs means that the company will earn little profits assuming the revenues remain relatively the same. Qantas has had the same fate in grappling with operational cost. 

Give your personal view of how some of the conflict generating and solutions could have been handled in a more effective process. 

While solving conflict generating issues and coming up with solutions, the following process must be followed in order to effectively generate solutions. The approach is started by; identifying issues concisely and clearly (Sjursen, 2000). The issues raised in this case are the challenges that affect Qantas Airways from expanding and competing internationally. The second approach is based on generating options. The solution to this problem is for the government to intervene. As a national carrier, the government must come to terms that its national glory of the airline is fast fading. Australian government must carry out proper feasibility test and find proper solutions to the airline. It needs to inject additional cash, to enable the company to get ways to start competing. Cash inflow is not the only solution (Sullivan, 2002). Hiring of competent staff and management to steer the company to the next level is fundamental.

Strategies to win the war with competitors will be upped. Qantas has had it very rough during the financial down turn which was global. The world economic slump affected all the nations but ultimately companies with a bigger global outlook took a bigger hit than smaller companies. Dropping prices just to win of customers will be a step towards the right direction. It will attract a lot of customers back. The last step is to make available decision which is effective for the growth of the company (Gooderham, & Nordhaug, 2005). Qantas Airways should hire the best consultants locally and internationally to come up with the best strategy for beating off competition.. High operational costs means that the company will earn little profits assuming the revenues remain relatively the same. Qantas has had the same fate in grappling with operational cost.

Problem solving solutions have two basic parts that are conflict diagnosis and development of alternative solutions (Expansion of top level domains and its effect on competition, 2010). Qantas has an expansion and competition problem which should be solved by mutually acceptable solutions. Other strategies include expanding the pie or the base of operation, creating new interests to satisfy the market and making Qantas a world class Airline to compete with its peers globally.

References

Bernaciak, M. Market expansion and social dumping in Europe.

Boxall, P., & Purcell, J. (2016). Strategy and human resource management. Basingstoke: Palgrave Macmillan education.

Briscoe, D., Tarique, I., & Schuler, R. International human resource management.

Cooke, W. (2003). Multinational companies and global human resource strategies. Westport, Conn.: Quorum Books.

Expansion of top level domains and its effect on competition. (2010). Washington.

Gooderham, P., & Nordhaug, O. (2005). International management. Malden, Mass. [u.a.]: Blackwell Publ.

Haugen, D., & Mach, R. (2010). Globalization. Detroit: Greenhaven Press.

Heidenreich, M. (2012). Innovation and institutional embeddedness of multinational companies. Cheltenham, UK: Edward Elgar.

Hitt, M., Ireland, R., & Hoskisson, R. Strategic management.

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Papadopoulos, A. (2010). The international dimension of EU competition law and policy. Cambridge, UK: Cambridge University Press.

Sjursen, K. (2000). Globalization. Bronx, N.Y.: H.W. Wilson Co.

Sullivan, J. (2002). The future of corporate globalization (1st ed.). Westport, Conn.: Quorum Books.

Waters, M. (2001). Globalization. London: Routledge.

Zheng, C. (2010). People management challenges to multinational companies in Asia. Hauppauge, N.Y.: Nova Science.