Question:
Discuss about the International Management: Political Attitudes and Democracy.
1. The top five biggest management challenges that the international management firms face are as follows,
Attracting and developing the new clients – It has been seen that 72% of all the professional services actually cite generating new business to be their most prioritized challenge (McFarlin & Sweeney, 2014). In management consulting world, the new business need is noted over three times more the respondents than the challenge which is second highest.
Dealing with competitive marketplace or difficult economy – The competitive pressure signs are been echoed in the challenge of the second business which is named just above 25% respondents in the industry of management consulting. It has been seen that the competition has heated up as several international companies have increased their efforts (Ruigrok & Van Tulder, 2013). Many firms are continuing to look for other opportunity in the economic sluggishness.
Finding and keeping the good people – Searching and retention of the best people has become a major challenge for the management firms. To fight for the best talent has always been a challenge to business.
Innovating new ideas – The companies have focused to innovate at higher level than other industries (Cavusgil et al., 2014). For staying competitive, the companies should show their expertise and thought process.
Strategic issues – Coordination of all the activities starting from developing new client to continuous innovation is a key concern for the firms. For contending pressures, the companies should make efficient approaches in their strategy through effective utilization of available resources which is a major challenge.
The international firms should hire qualified professionals who will make promotional strategies to attract and develop new clients. The firms should make rigorous market research to understand the exact condition for dealing the economy (Galliers & Leidner, 2014). The company should keep expert HR people who will recruit dedicated professionals and provide good monetary and non monetary facilities to retain them. The firms should idealize those companies who have given innovative ideas and are able to mitigate strategic issues.
2. The two forms of political risks are the macro and micro level political risks. The political risks of macro level affects a country’s all participants. The local, regional and national events of politics often mean that events at local levels have the follow on effects for the macro level stakeholders. It includes actions of government currency, changes in regulation, declarations of war (Pastor & Veronesi, 2013). It also affects the companies who are been operating in the nations and the result of the political risk of macro level are like the confiscation which causes the business property’s seize.
The political risks in the micro level are risks which are project specific. These risks are more in local business favor rather than the international organizations that operate in the nation. The process of risk includes the government review committee, which is project specific on the United States’ Foreign Investment, the project, asset’s nationalization, and the dangerous politically strong local partner’s selection (Almond & Verba, 2013). The risk is also relevant for the decision making of government project where the initiatives can be complicated due to the risk result.
The four steps that the firms should take to deal with the risks are as follows,
Identification of the risks.
Measuring the exposure
Mitigation of the risks.
Monitoring the risks (Giuliani & Macchi, 2014).
3. In the multinational companies, if abuses regarding human rights take place in the foreign countries, then the management board will make discussion with the foreign government so that they will take remedial actions for mitigation of such evil practices. The directors of the companies should make a consultation with the government authorities to make legislations in favor of human rights that if someone in the company does such activities will be strictly penalized and terminated without any delay (Ruggie, 2014). The government should support them in further the further trial of the convicted.
The companies should not opt for the attempt of giving bribery to the foreign government as it is an unethical means of practice and will be risky of the government treats it to be an offensive activity. They can think of inducing such attempts of the government allows such practice such as Brazil.
The other questionable practices can be counseling the employee who has made the human right abuse or making a compromise between the employee who has abused and the one who has suffered (Wetzel, 2016). A further questionable practice can be providing money to the abused as compensation so that he will withdraw his complains for a peaceful settlement.
The companies should involve themselves in case of human right abuse to the fullest extent as the mishap take place in between their employees. They should remain engaged until coming to a justified solution.
They should remain involved in providing solutions to the human right abuse from top to bottom, as it is their prime corporate social responsibility (Samovar et al., 2014). They should remain involved to maintain a clean and peaceful corporate life with security to their employees.
4. The effect of cultural context in cross-cultural interactions is all about the cultural difference that takes place between the people while communicating each other, which can hurt each other’s sentiments (Peretz, 2013). Each person actually represents their cultural value while interacting with the others.
If there is a cultural difference between the persons who are making business negotiations then there will be an impact in both of the person’s mind. It can be possible in case of meetings or can be in the firm’s human practices as a whole. For an example, of a business negotiation takes place in a meeting between two persons belonging from Australia and France then a cultural difference lies between them (Medved et al., 2013). The official language Australia is English whereas of France, its French. If the employee of Australia speaks to the French employee in English language then it can hurt the sentiments of the French as there is no such space for him to communicate in French.
Therefore, the French can have a barrier in accepting the opinions of the Australian employee. In case of an Australia based company having their branch office at France, there is a high chance that employees working in the office are French. But as per the rules in the head office, there is rule imposed by the HR authority to use English language in the branch office at France (Ting-Toomey & Chung, 2012). This can also hurt the sentiments of the French employees working in the branch as they are unable to communicate in their mother tongue though working in their native land.
5. The spoken communication presents challenges to the non-native communicators for the following reasons,
The accent of the language in which they are communicating is different and is not properly understood in the both end.
Communicators in the both end may use different language as their mother tongue which can create a huge barrier for communication (Vaara et al., 2012).
The formal speeches used in one end during communication may not be a practice of the other, which can hurt the sentiments of the first one.
The written communication presents challenges for the causes given below,
Various nations use various forms of same language while writing. For an instance, the formalities used in writing English in UK is not acceptable to the people in US as they don’t prefer formal English but like to write the language in casual way (Goetsch & Davis, 2014). Such casual writing may hurt the sentiments of the people of UK. Moreover, Shakespeare English used in France is not properly understandable by the people in Asian countries.
Natives using different languages as mother tongue face difficulties while communicating through a common language in written if they don’t have enough knowledge in that language (Cummings & Worley, 2014). The other side may not understand such written standards.
6. The conflicts or misunderstandings in cross culture may take place in case if there are differences in culture. The causes of cultural conflict in the international management are as follows,
The conflict or misunderstandings that take place between the religious or ethnic groups or different natives.
The ignorance in culture and the case of insensitivity that exists in organizations.
People have lack of awareness in different societal lifestyle practices (Rothaermel, 2015).
People have different cultural practice.
People have differences in perception of illness and its treatment.
There is a miscommunication and misinterpretation among the people regarding concepts of cultural practices (Terpstra, Foley & Sarathy, 2012).
People who belong to different nations have different cultural views. If they work with each other in a company then chances are there for differences between them. Several nations have their own personal religions, which can make people to get involved in cultural conflict. People who belong to different cultural practices if don’t have ample respect to each other can pass comments which can eventually hurt other’s sentiment (Antras, 2014). Their procedure of work can be different which can be misinterpreted or misunderstood by the others.
7. The five steps in the process of the development of international strategy for a company are as follows,
Analyzing the strength and weakness of the company regarding growth in the international level – The analysis is done for the preparation of the objective presentation as per the capabilities of the company regarding international growth (Banks, 2015). The issue is the analyzing the company’s present product’s competitive advantage.
Analyzing the position and strength of the competitors – A proper identification of the company’s competitors should be done along with their line of products. A rigorous analysis should be done on their weakness and strengths (Antras, 2014). A requirement is there for the information stating how the competitors have made penetration in the markets abroad.
Selecting the markets which are been targeted – The necessary screening can provide result in the prospective nations for which the potential of the market has been estimated roughly (Rothaermel, 2015). There should be an inclusion of the specific parameters of the market, which can turn the products for decision making and evaluation purpose.
Selecting the modes for entry – The mode for entering the target market can be selected on the basis of marketing and financial risk, the financial return to be expected in relation to cost, desired management control’s degree.
Deciding the strategy of international business at the workshop of the top management – The management of top level will make the evaluation for the options of varieties (Cummings & Worley, 2014). They will take the decision on the issues regarding strategy of desired business for the growth in international level.
8. The advantages and disadvantages of the foreign market entry options are as follows,
There is feedback of good information from the target market, which makes the development of better relationships with the buyers (Goetsch & Davis, 2014).
A controlling of foreign market selection is there which will make a choice for the companies representing abroad nations.
A better protection is there in case of the patents, trademarks, goodwill and the property, which was intangible (Vaara et al., 2012).
It is realized that the market has the potentiality to have a greater sales and profit, which is a kind of indirect exporting.
In case of foreign market entry, a greater requirement of information always becomes existent.
There is a requirement of investments, which are higher in case of resources, time and personnel (Ting-Toomey & Chung, 2012).
There is higher risks and higher costs for start up of business which is opposed to the exporting in indirect mode.
There are also a chance of longer time-to-market which is opposed to the indirect export business.
9. The pros and cons associated with the various organizational structure in the international management firms are as follows,
The structures are cost efficient (Medved et al., 2013).
It makes promotion of making faster decisions.
It provides a communication, which is clear.
It has a requirement of supervision and less dominance (Peretz, 2013).
A sharp chance lies there that the management can loose their control.
There can be a struggling effort between work and relationship.
A creation of power struggle can take place.
It makes the retention of the employee to be difficult (Samovar et al., 2014).
It can make a hindrance of the growth.
A lesser amount of motivation can take place.
It can make results for the confusion of roles.
10. The difficulties that are been faced by the multinationals with regard to the issues of cross cultural leadership are as follows,
Understanding the difference in people’s behavior from expectation – The behavior of common people is their value’s expression that they manage people from other culture. They have to understand their behavior (Wetzel, 2016). Development of a proper understanding is one of the biggest challenging task that the managers are facing.
Avoiding to get frustrated and angry – A rigorous comparison is always been made in case of the behavior of the people with values and norms. If there is a sense of behavior to accept then it will be accepted otherwise it will be rejected (Ruggie, 2014). Such rejection tends to hostility and frustration towards the behavior of employee.
Providing motivation to a team, which is culturally diversified – Motivation has a close relation to culture. A factor that is motivating in one culture can be de-motivating to the other.
Achieving the efficiency of desired level – It is difficult for reaching the desired efficiency level in a team having cultural variations as maximum time gets spent to sort out the misunderstandings or setting the expectations and making all person for pursuing the same goals (Giuliani & Macchi, 2014).
Lack of training to manage a team of cultural diversification – The managers of cross culture can have the feeling they require for managing tools and leading a team which is culturally diversified.
11. The problems associated with evaluation of employee performance are as follows,
Bias of the rater.
Influence of the events that occurred recently.
Make a rating in the middle.
Make a focus in the negative side.
Surprises, which are unwanted (Almond & Verba, 2015).
Infrequent feedback.
Improper assessment of the actual performance.
Assessment done without data.
Lack of accountability.
The problems are been complicated by international settings through following ways,
Lack of understanding of the international performance management.
Inability to analyze the areas on the basis of skills and other traits for appraisal in the international level (Pastor & Veronesi, 2013).
Lack of understanding of the conflicting role expectation from organizational groups of diversified culture.
Analyzing appraiser varieties in international level of performance appraisal and determination of who will make the appraisal (Galliers & Leidner, 2014).
12. The advantages associated with cultural diversity in groups are as follows,
The gender and racial diversity are found for positively contributing to sales, profits and customers.
The racial diversity can make an influence on the market share (Cavusgil et al., 2014).
The companies can increase their creativity through encouragement of diversified opinions and perspectives.
The disadvantages are,
The company that makes recruitment and makes employment of diversified workforce should create a culture promoting respect and dignity for avoiding the tension between the employees.
There will be an adverse effect in communication if the first language of the employee is not English (Ruigrok & Van Tulder, 2013).
The existing employees will leave the organization if there is a prevention of their personal prejudices from working with the colleagues having different background.
While making investigation of the employee complaints for the negative attitudes can acquire a huge time of the management (McFarlin & Sweeney, 2014).
References
Almond, G. A., & Verba, S. (2015). The civic culture: Political attitudes and democracy in five nations. Princeton University Press.
Antras, P. (2014). Grossman–Hart (1986) goes global: Incomplete contracts, property rights, and the international organization of production. Journal of Law, Economics, and Organization, 30(suppl 1), i118-i175.
Banks, J. A. (2015). Cultural diversity and education. Routledge.
Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International business. Pearson Australia.
Cummings, T., & Worley, C. (2014). Organization development and change. Cengage learning.
Galliers, R. D., & Leidner, D. E. (2014). Strategic information management: challenges and strategies in managing information systems. Routledge.
Giuliani, E., & Macchi, C. (2014). Multinational corporations’ economic and human rights impacts on developing countries: a review and research agenda. Cambridge journal of economics, 38(2), 479-517.
Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence. pearson.
McFarlin, D., & Sweeney, P. D. (2014). International Management: Strategic Opportunities & Cultural Challenges. Routledge.
Medved, D., Franco, A., Gao, X., & Yang, F. (2013). Challenges in teaching international students: group separation, language barriers and culture differences.
Pastor, Ľ., & Veronesi, P. (2013). Political uncertainty and risk premia.Journal of Financial Economics, 110(3), 520-545.
Peretz, H. (2013). Information Technology Systems in the Human Resource Management Area. In Global Trends in Human Resource Management (pp. 214-236). Palgrave Macmillan UK.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill.
Ruggie, J. G. (2014). Global governance and “New Governance Theory”: Lessons from business and human rights. Global Governance, 20(1), 5-17.
Ruigrok, W., & Van Tulder, R. (2013). The logic of international restructuring: The management of dependencies in rival industrial complexes. Routledge.
Samovar, L., Porter, R., McDaniel, E., & Roy, C. (2014). Intercultural communication: A reader. Cengage Learning.
Terpstra, V., Foley, J., & Sarathy, R. (2012). International marketing. Naper Press.
Ting-Toomey, S., & Chung, L. C. (2012). Understanding intercultural communication. New York, NY: Oxford University Press.
Vaara, E., Sarala, R., Stahl, G. K., & Björkman, I. (2012). The impact of organizational and national cultural differences on social conflict and knowledge transfer in international acquisitions. Journal of Management Studies, 49(1), 1-27.
Wetzel, J. R. M. (2016). Targeting Corporate Human Rights Conduct from a Multinational Perspective. In Human Rights in Transnational Business (pp. 105-147). Springer International Publishing.
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