BUMGT5920 Management in a Global Business Environment
Introduction
The elements of the global business environment are environmental, legal, technological, social, economic, and political. There are multiple challenges faced by organizations expanding business globally such as communication gap, strategic risk, and performance risk. The study is going to focus on the analysis of challenges on global business environment, and key factors on responsible and sustainable international management.
Analysis of Key issues on the global business environment
There is a requirement to identify the risk factors to expand the business globally. There are mainly four risks in international business such as commercial risk, cross-culture risk, financial risk, and country risks. The potential risk of a business depends on poorly executed or developed business tactics of procedures, and business strategies. As per the opinion of Kiseľáková et al. (2019), there is a requirement of selecting an effective entry strategy, operational management, marketing strategy, appropriate location, partner, and HR strategy. As per my opinion, the authority of an organization needs to focus on business strategies and analyse the market effectively to reduce the impact of risks.
Figure 1: Business environment (Source: Buckley, Doh, & Benischke, 2017)
On the matter of commercial risk, the organizations need to focus on research and international strategies. As per the opinion of Buckley, Doh, & Benischke (2017), organization strategy plays a significant role in achieving organizational goals. The major issue in the environment of global business is financial risk. Majority of organizations face difficulties at the rate of international currency exchange. As per my opinion, there is a requirement of analysing current rate before expanding business. The risk of currency occurs when an organization works across multiple currencies and borders. In the environment of global business, the management of an organization needs to focus on pricing strategy, contracts, and taxation. As per my point of view, effective contracts of business assist an organization to run the business effectively in other countries.
There are multiple key issues in political or country risks such as corruption, tariffs, taxes, embargoes, sanctions, and foreign investment. As per my view, the identification of micro or macro-environmental risk of industry, company, or country assists to reduce the impact of risks in the global business environment. In the environment of global business, a business can be impacted through socio-political events, and environmental events such as bushfires, earthquakes, demonstrations, and civil unrest. As per the opinion of Amankwah-Amoah & Adomako (2019), the management of an organization needs to analyse and identify the political factors, environmental factors, legal factors, and social factors effectively to reduce the impact of challenges in expanding business. Market analysis assists an organization to mitigate the risks in business such as market risk, material risk, pricing risk.
Another major issue in the environment of global business is a cross-cultural risk. There are multiple key issues in cross-cultural risk such as ethical practices, decision-making processes, negotiating styles, and cultural differences. As per my opinion, the management of an organization needs to focus on the environment of workplaces to maintain diversity and effective performance of employees. As per the opinion of Bridgman, McLaughlin, & Cummings (2018), another key issue in the global business environment is legal issues. The management of an organization needs to focus on legal factors to improve services in a global business environment.
The key issues of legal risks are intellectual property, payment conditions and terms, dispute resolution processes, contractual arrangements, and legal liability. As per my view, legal factors play a crucial role in the development of an organization. As per the opinion of Bridgman, McLaughlin, & Cummings (2018), the identification of key issues in the global business environment assists an organization to develop business strategies. The other key issues of the global business environment are communication gaps, strategic issues, and management issues.
Key factors on sustainable and responsible international management
The management of an international organization needs to focus on the environment, people, and economy to maintain sustainability in management. There are multiple advantages of sustainable business and management such as decreasing waste expenses, developing employee productivity, increasing revenue, reducing material expenses, and decreasing operational risks. As per my opinion, the management of an organization needs to analyse key challenges and issues in workplaces before implementation of strategy. As stated by Schwertner (2017), sustainable management assists an organization to increase future opportunities in global business environment. International Management these days is mostly linked with that of Corporate Social Responsibility. This means that business firms across the world are increasingly linking their business policies with that of different environmental goals. As per the opinion of Parkes et al.(2017), this means that firms are looking towards long term goals so that their business policies do not create any negative effect upon the environment. Businesses look upon sustainable management of their environment from perspectives of Business Ecosystem, People and the surrounding environment. Sustainable management of business tends to create a positive impact upon both the workforce as well all the various people who are associated with that of a particular business organization.
According to the Shareholder Model of Milton Frtiedman, it is the Shareholder’s viewpoint regarding that of a particular business organization’s policies that shapes its CSR decisions. These days most people associated with that of a particular business seek to opine that greater philanthropic activities tend to increase the corporate image. As per the opinion of Store et al. (2017), this means that organizations that increasingly engage themselves in philanthropic activities tend to increase their value in the market. Friednmman however was of the view that a firm’s primary purpose is only to increase profits from business operations. Philanthropic activities should be better left towards dimensions of various different government agencies who are dirty bound to take care of various social activities.
The stakeholder model however throws a different light upon the concept of International Management. This means that organizations that follow this model tend to give more stress upon different responsibilities that an organization bears upon its shoulders as a part of its social responsibility. This means that across various kinds of international management procedures that are taken up in different organizations, stakeholder theory tends to widely influence Corporate Social responsibility. As per the opinion of Amrutha and Geetha (2017), stakeholders extend not only to that of an organization and its members but much beyond that to that of the society at large as well. Thus, an organization that understands the society as a part of its network of stakeholders cannot easily neglect the implications of its various decisions upon different sectors of the society. The factors that influence International management in a sustainable manner can be classified into two major areas- namely that of business decisions as well as moral decisions. This means that organizations are guided firstly by various philanthropic activities that they tend to do for the society as an extension from their own profits. Besides there are also different business decisions like that of a better image in the market and across customers that influence this decision well.
Conclusion
It can thus be concluded from the above discussion that Corporate Social responsibility is getting increasing importance in terms of international management across that of various big Corporate Houses. This has happened because people these days are realizing about the increasing impact of businesses across various social areas especially that of people as well as that of the environment. This means the Sustainable international management is increasingly focused upon as it creates beneficial results for both businesses as well as that of the society.
References
Amankwah-Amoah, J., & Adomako, S. (2019). Big data analytics and business failures in data-Rich environments: An organizing framework. Computers in Industry, 105, 204-212. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0166361518305566
Amrutha, V.N. and Geetha, S.N., (2020). A systematic review on green human resource management: Implications for social sustainability. Journal of Cleaner Production, 247, p.119131. Retrieved From:: https://e-tarjome.com/storage/panel/fileuploads/2020-05-12/1589284613_E14900-e-tarjome.pdf
Bridgman, T., McLaughlin, C., & Cummings, S. (2018). Overcoming the problem with solving business problems: Using theory differently to rejuvenate the case method for turbulent times. Journal of Management Education, 42(4), 441-460. Retrieved from: https://journals.sagepub.com/doi/abs/10.1177/1052562917754236
Buckley, P. J., Doh, J. P., & Benischke, M. H. (2017). Towards a renaissance in international business research? Big questions, grand challenges, and the future of IB scholarship. Journal of International Business Studies, 48(9), 1045-1064. Retrieved from: https://link.springer.com/article/10.1057/s41267-017-0102-z
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Kiseľáková, D., Šofranková, B., Gombár, M., Čabinová, V., & Onuferová, E. (2019). Competitiveness and its impact on sustainability, business environment, and human development of EU (28) countries in terms of global multi-criteria indices. Sustainability, 11(12), 3365. Retrieved from: https://www.mdpi.com/481466
Parkes, C., Buono, A.F. and Howaidy, G., (2017). The principles for responsible management education (PRME): The first decade–what has been achieved? The next decade–responsible management education’s challenge for the sustainable development goals (SDGs). The International Journal of Management Education, 15(2), pp.61-65. Retrieved From: https://winchester.elsevierpure.com/files/341324/642642_Parkes_ThePrinciplesOfResponsible…_original_deposit_with_CC_license_link.pdf
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