Management – Planning for International Operation

In a wider market place, strategic decisions are more complex and are multi-dimensional. Large multinational corporations have to decide where functional activities, e.g. purchasing, research and development, marketing and sales, can be performed. Each activity may be carried out in every country or it may wish to concentrate an activity in a particular location to serve the organization on a world-wide basis. Research and development may be centralized in one area to serve the whole organization.

Accurate information is essential to enable an organization to determine whether it can hope to operate in a safe and profitable manner in another country. The following information is the minimum that is required :

·        The main factors affecting a country’s business operations (e.g. labour available, market size);

·        An analysis of the business structure of country;

·        The strengths and weaknesses of its country;

·        A knowledge of current and future legislation and the climate for investment;

·        A knowledge of possible political change.

Effective management in a wide range of environments depends upon managers in each country being able to ensure any immediate need, without referring each time to a management in the parent country. Central control is important but subsidiaries need operational flexibility so they can exploit their own market more effectively.

The extent of the activities of international business operations can be seen by the wide variety of products in the average household, for example Japanese televisions and radios, German cars, clothes from Hong Kong, etc..etc. The growth of world-wide business operations has meant that the management of an enterprise can have competitors from outside as well as inside their own country to a far greater extent than before.

A manager should be aware of the issues poses by being involved with business on an International scale. Management in an international setting seeks to achieve the global objectives of the enterprises through the efficient utilization of resources.

Management Information Systems

Problem Involved

The problems involved are quite different from those affecting domestic firms. Managers have to interact with staff who have different cultural and educational backgrounds and deal with different legal, economic and political factors.

In order to effectively manage foreign operations, managers need to :

·        Develop a greater level of awareness and knowledge;

·        Learn new skills (e.g. foreign language) and techniques, as incentives and values that motivate people differ widely;

·        Evaluate and adjust the way they use feedback and control methods to manage employees in different cultures.

The external environment

All enterprises must consider carefully the elements that comprise their environment, whether they are public or private, large or small. All managers should seek to understand the relationship between an enterprises and its environment, whether they operate a business, government agency, charitable organization or university.

One method for understanding the relationship between an enterprises and the environment is to consider the various groups, both internal and external, that can affect or be affected by the accomplishment of its objectives.

Where international management activities are concerned, the constraining influences of external factors on an enterprise are even more crucial.

The stakeholder approach broadens the scope of social responsibility and managers must be responsible, according to this philosophy, to certain groups that are affected by, or can affect, the interest and objectives of a company. A methodical approach to obtaining information is vital. Effective managers recognize the need for carefully controlled environmental scanning so the various stakeholder groups can be monitored.