MANAGING AN INTERNATIONAL BUSINESS

Managing an International Business

Managing an International Business

Introduction

Domestic and international enterprises studies, in both the public and private sectors, share the business objectives of functioning successfully to continue operations. Private enterprises seek to function profitably as well. Why, then, is international business different from domestic? The answer lies in the differences across borders. Nation-states generally have unique government systems, laws and regulations, currencies, taxes and duties, and so on, as well as different cultures and practices.

Q. “Managing an international business is no different from the management of a domestic business. Therefore there is no benefit from studying a module on International Business”. Critically evaluate this statement.

An individual traveling from his home country to a foreign country needs to have the proper documents, to carry foreign currency, to be able to communicate in the foreign country, to be dressed appropriately, and so on. Doing business in a foreign country involves similar issues and is thus more complex than doing business at home. The following sections will explore some of these issues. Specifically, comparative advantage is introduced, the international business studies environment is explored, and forms of international entry are outlined.

Today, business studies are acknowledged to be international and there is a general expectation that this will continue for the foreseeable future. International business studies may be defined simply as business studies transactions that take place across national borders. This broad definition includes the very small firm that exports (or imports) a small quantity to only one country, (Allen, 2004, 16) as well as the very large global firm with integrated operations and strategic alliances around the world. Within this broad array, distinctions are often made among different types of international firms, and these distinctions are helpful in understanding a firm's strategy, organization, and functional decisions (for example, its financial, administrative, marketing, human resource, or operations decisions).

One distinction that can be helpful is the distinction between multi-domestic operations, with independent subsidiaries which act essentially as domestic firms, and global operations, with integrated subsidiaries which are closely related and interconnected. (Buckley, 2005, 54) These may be thought of as the two ends of a continuum, with many possibilities in between. Firms are unlikely to be at one end of the continuum, though, as they often combining aspects of multi-domestic operations with aspects of global operations.

Finding overseas markets or suppliers and dealing with shipping complexities are only two ...