International management

The economic independence of nations fosters the growth of multinational firms that conduct business on a global scale where markets are more important than political boundaries. Managers operating in an international environment deal with a variety of unique challenges growing out of such factors as politics, economics, and cultures.

Each foreign country is different from all other countries where a firm might do business. So, when the first consideration of a company is to get established in a foreign country it is the environment's current state that gets more attention. It has to learn local laws, customs, and languages. It must learn to deal with foreign patterns of economic growth, investment, and inflation. The company must also concern itself with various aspects of international trade, such as the value of a country's currency relative to other currencies (the foreign – exchange rate) and its balance of payments, as well as extent of controls on imports and exports, on foreign investors.

Equally important is the multinational company's ability to choose the right strategy and organization applicable to individual companies operating in the international business arena. There are four strategies involved in international management. They include globalization, rationalization, national responsiveness, and the multifocal approach. Whether or not these strategies are implemented depends on a company's size and the number of countries in which it operates. For example, a small export company is not likely to employ a rationalization program. On the other hand, an MNC might utilize all four strategies.

Firms that wish to expand into a foreign country must also assess its political stability, political risks inherent in particular countries. Developed countries tend to be relatively stable from a political and an economic standpoint, while less developed countries may be more susceptible to political strife. Governments may come and go or may decide to nationalize companies. Such was the case in the 1960s when Chile's President Eduardo Frey "Chileanized" the country's copper mines. Many American companies lost their holdings, although they were compensated for their losses.

One of the most critical factors in the success of a company's international success is its hiring program. Generally, hiring production workers is not a major problem, companies recruit locals to perform the daily work. In all likelihood, first-level supervisors and possibly some of the middle managers will also be members of the local community. Hiring upper-level management, however, is another matter—one that must be handled with care and sensitivity.

Individuals searching for careers in the field of international management will find numerous opportunities available to them. The field is becoming a specialty of its own. Virtually every management textbook being used in business curricula today has at least one chapter devoted entirely to international management. Colleges and universities are offering degrees ranging from associates to Ph.D.s in the field. As more and more companies enter the international business arena, the number of management opportunities will grow.

Notes:

оn the other hand – з іншого боку

to be the first consideration of – бути найважливішим для …

MNC – Multinational Corporation