The more closely the management of an international company can align its comparative advantage with a source or destination country's competitive advantage, the more conveniently it can achieve and maintain its overall business objectives. Management of international business demands consistent reference to controllable environmental factors such as raw materials, capital and people, marketing, advertising, personnel management and finance as well as uncontrollable environmental factors that include competition, distribution, the economy, finance, regulations, geography, politics, culture, labor and technology.
The management of international organizations is definitely different from the management of domestic organizations because "organizations conducting business across borders must deal with the complexities of three different types of environment namely domestic environment, foreign environment and international environment" Batt.
[...] Such occurrences are inevitable in the international business environment and they cause instability in real interest rates and capital inflows from abroad, effectively increasing the real exchange rates (Kenen, 1996). The appreciation of interest rates will subsequently be coupled with increase in external debts, a situation that will dissuade investors abroad from holding more debts (Kenen, 1996). Such outcomes lead to the interest rate cycle taking a different direction that reduces real exchange rates as a result of declined capital inflows (Kenen, 1996). [...]
[...] Such reference to workers' behavioral aspects has further been recommended by theory Y which poses optimistic view of workers as hard working, sensitive and cooperative (Cole, 2004). W.G Ouchi's theory Z which is based on studies of success of Japanese companies in manufacturing also lends credence to human aspect of management by suggesting the “coordination of people rather than technology in the pursuit of productivity” (Cole p. 29). Some of the motivational strategies which can be adopted by managers in international business environment include delegation, employee empowerment, and assertiveness. [...]
[...] In international management, appropriate strategies must always be adopted to ensure effective organizational coordination in order to achieve a balance between controllable and incontrollable variables that determine the operations of a business organization. Ball & McCulloch (1999) reckon that the environmental adaptation process should be pursued by managers from an active front rather than passive front to ensure constant preparedness for both foreseeable and enforceable events. Notably, the internal and external environmental issues are very important factors which companies aspiring to become successful multinationals must observe. [...]
[...] Accumulation of foreign exchange reserves therefore, spells benefits to a country only to the limits that such reserves may allow the country to gloss over the effects of short-term fluctuations in the balance of payments. Labor Regulations Managers of international business organizations must understand that regardless as to whether an organization is pursuing classical or contingency management styles, any assumptions which they hold have the potential of fundamentally affecting the environment and working arrangements in organization (Cole, 2004; Tyson, 2006). [...]
[...] Conclusion Evidently the analysis of a company's international business environment marks an important step towards determining the company's exact trade trading position. The analysis of forces prevalent both in source and destination markets provide clear picture of the comparative advantage or disadvantages prevalent in the international market structures (Ball & McCulloch, 1999). Managers hold the responsibility of undertaking “detailed analysis of the competitive advantages to ensure that they base the development of their companies on either comparative advantages of both their source countries and destinations countries or on ownership advantages which may include marketing management, economies of scale, and R&D that are beyond duplication by competitors across the globe” (Kenen p.52). [...]
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