CORPORATE MANAGEMENT IN ACTION

Corporate Management in Action



CORPORATE MANAGEMENT IN ACTION

1. The international business environment and development of global organizations

1.1 Globalization and theories of international trade

Globalization leads to lower costs incurred due to various international transactions of all types. Globalization influences different nations and societies in different ways. It is irrespective if economy, ecology, politics, society and culture. The main drivers of globalization are rapid growth of international business, integration of world economies, transitional corporations, and global consumers, impact of technology, role of government and deregulation of financial markets (Al-Rodhan, 2006, 1).

1.2 Benefits and challenges of globalization strategies

The benefits brought by globalization are efficiency, economies of scale, operational flexibility, cross subsidization, strategic, diversified macroeconomic and operational risks, broad learning opportunities, reputation and brand recognition. The challenges of globalization are transfer of jobs from developed to developing nations, decrease in environmental integrity, high chances in the occurrence of civil war and spread of materialistic lifestyle (Depree, 2007, 73).

The principal rationale adopted by organizations to develop a global strategy is to reduce barriers of trade for the enrichment of all societies. Globalization involves the process of identification of local resources which would support the various cultures. Localization refers to the customization of application for different localities. It is the actual process where resources are translated to a particular culture (Depree, 2007, 73).

Pursuing global strategy would introduce the organization with the benefits of higher profits. Organizations enjoy cost reduction by experiencing low-cost strategy. Challenges of managing a multinational business are that it is difficult to manage; more resources are required, complex, strong competition. Size can vary due to number of personnel, output, resources. Span of control is determined by the organizational layers. Technology and task refer to how the work is performed and organized (Depree, 2007, 73).

1.3 Organizational structures to support Globalization

The issues faced by a local business and international business establishing an organizational structure can be similar but their size and effects can vary. Hybrid organizational structure refers to where two different organizations merged as one.

2 (a) Actions determining whether an organization survives, prospers or dies

2.1 Effectiveness and efficiency of existing operations

Efficiency refers to the quantity of resources consumer for each unit produced. It presents the level of achievement of goals. Effectiveness refers to level the organization reaches to achieve its goals. It represents the ability to accomplish future goals (Gersick, 2001, 10).

Measurement of process determines the progress of the organization in achievement of goals. Operations' objectives are linked to each different operation and department. Summing all the operational objectives organizational strategy is formed. Organizational strategy divided into different functions becomes operational objectives. Benchmarking is a process of comparing different types of data. This comparison produces quantitative results (Gersick, 2001, 10).

2.2 Strategic alternatives obtainable for achieving organizational goals

Strategic analysis is the process of conducting research on the organizational environment. Environment involves the operation and formulation of strategies of the organization. The analytical methods to analyze the strategy are SWOT, PEST, porter's five forces, four corners and value ...