BA 405- INTERNATIONAL BUSINESS STRATEGY

MID-TERM EXAMINATION

MICHELLE F. GO JANUARY 13,2018

1. a. International business and management

When a company enters to foreign market to exchange, produce or distribute goods and
services or exchange resources a situation of international business exists. The decision
to get into international business is a corporate strategy to achieve its organization
objectives and goals. Wherein, the primary reason for going international is to earn more
profits. Associated with this decision is planning the ways on how to manage the various
business functions such as marketing, accounting, human resource and so on in that
distinct location and coordinate them with the organization’s overall strategy. This deals
to what we called International management. Therefore, international management deals
with managing foreign operations strategically controlling the various business functions.

b. Planning for international business

Planning is very essential for any kind of business to have better organization of
business activities and effectively develop business strategies. Before entering into
international markets companies should do a market research and draft an International
Business Plan. This document will help them set their goals, allocate their resources
effectively and efficiently and determine which countries offer the most opportunities for
their products or services as well as how to reach the clients and how to create a
competitive advantage. The very purpose of the international business plan is to prepare
companies, especially those middle and small businesses who decided to enter the
international market place. Aside from that, management must monitor internal and
external environments in that foreign market to manage change and prepare for some
adjustments of plans, objectives or strategies. Another important thing is that
businesspeople should be aware of their responsibility and ethical behavior across the
borders as part of their plans.

c. International human resources

For an international organizations/ companies to survive in today’s competitive

environment, it must successfully manage the complexities of human resources from
recruitment, to development and then to maintenance to have an effective workforce.
Employees must be viewed as the most valuable assets- resources that are very
indispensable for the success of an organization. A talented and trustworthy individuals
must be attracted to join the organization, encouraged them to remain in the
organization, and commit to the organization’s objectives.
2. "The study of international business is fine if you are going to work in a large
multinational enterprise, but it has no relevance for individuals who are going to work
in smaller firms."
a. From the point of view of INTERNATIONAL BUSINESS AND MANAGEMENT this
statement is not true.

There is a misconception about international business and international

management as terms that many people used only for large multinational
corporations. People have the perception that a small business does not export, thus
no international activities is involved. But medium and small-sized companies now
operate in the international arena, although the complexity may be less as compared
to large firms. A sample situation given was a medium-sized ceiling fan manufacturer
that operates in the Eastern region of India since 1954. Since the company did not
foresee any threat of competition in their home country and the financial position and
performance is healthy as its rate of return over the years had been more than
adequate, it decided not to export or expand to foreign country. However by the time
of 1992, the company found itself competing to the same products from foreign
countries which penetrated the market. They have to match with the competitor’s
price, quality and service. However, several attempts failed to out-compete the
foreign firms. To potentially increase its sales and profits, it decided to go global.

I have read a statement of a Vice- President who is involved in International

Trade of a company, the leading supplier of material and equipment for cast polymer
production based in Valencia, California indicated: "We would be out of business if
we had not gone global when the domestic market was extremely slow." He says,
"Sales are sales regardless where they are coming from". Let’s take note that the
size of the company is not always important. It also does not need to have a huge
management and marketing department just because it is going international. Its
success depends on the quality and competitive pricing of its products or services
and other key factors involved.

The application of concepts for international business and management is just

the same whether small, medium or large business. They just differ on the degree of
complexity.

b. From the point of view of PLANNING FOR INTERNATIONAL BUSINESS, even

small firms can go internationally through exporting. Therefore, there’s a relevance
for individual to study international business even working in small firms.

Most small businesses start with the domestic market first before going into
exporting. Thus, they still need to plan their business activities whether they are
operating in domestic or international market, and whether they are small, medium or
large companies. The benefits of planning are the same for large and small
companies although it will differ on the formality, persons involved in making plan
and information availability other factors.
 For Large multinational company, planning can be a formal process with a
calendar that shows key deadlines for each department to submit their plans for
consolidation. Large companies often have a standardized format they use for the
plan. While Small Company planning can be as simple as creating forecasts using
spreadsheet software, and writing down major goals for the next year.

In large companies, most managers or at least heads of departments are

involved in the creation of the plan. Before implementation, the plan is approved by
senior management and sometimes the board of directors. The plan in a small
company may be the work of just the company owner, or the owner and several
other key staff members.

Large companies often have much more data available to assist with the
planning process than small companies have. They may purchase market studies
from research organizations and subscribe to database services that provide them
with statistical information they need to prepare a financial forecast. Small
companies often rely on their own primary research, such as studying trade
publications, and talking to customers, suppliers and competitors.

c. From the point of view INTERNATIONAL HUMAN RESOURCES, this statement is

far from the truth.

When we study international business this involves also the study of managing
the human resources. These resources are considered the most valuable because
business activities will work or operate through the human hands and minds of our
people/employees regardless of the size of the company. However, the system of
managing people is more complex in multinational corporations than small
businesses. In a small company, you usually have a smaller employee base. This
allows for easier development of a certain work culture and an intimate workplace.
Large Multinational companies have to figure out how to implement HR systems
across varying countries and cultures, while maintaining a unified company
environment. Human resources play an essential role in developing a company's
strategy as well as handling the employee-centered activities of an organization.

3. "Ultimately, the study of international business is no different from the study of

domestic business. Thus, there is no point in having a separate course on
international business."

a. From the point of view of INTERNATIONAL BUSINESS AND MANAGEMENT this

statement is not true. There is a difference from the study of domestic business.

The two must be treated separately as a field of study. From the area of
operation, there’s already a difference. The trade which takes place within the
geographical boundaries of the country is called domestic business, whereas trade
 which occurs between two countries internationally is called international business.
Entities engaged in international business often face more difficulties than the
entities which conduct domestic business. The international market will be always
larger than the domestic market in all cases. Therefore doing business internationally
is not the same as doing business at home. We need to study new skills to learn and
new knowledge to acquire about the country we will be going into. We will need to
learn about the different laws and regulations, the different cultures, the different
customer buying habits, and change or adopt the marketing strategies and materials
to appeal to the new country where we are trying to target. It is important to
understand the differences between domestic and international business.

b. From the point of view of PLANNING FOR INTERNATIONAL BUSINESS, there are
main features that mark the difference between the study of international and
domestic business as to planning in the international and domestic market although
domestic plans and international business plans share a same structure, and basic
concepts.

Well, the main issues here are the different currencies, regulations and political
problems of different states. There are other environmental factors to be considered
also such as languages, economic, socio-cultural, and technology that can possibly
affect the firm’s strategic planning. Thus, making plans for the business in a global
environment will encounter new and different issues with additional risks. Therefore,
we need to revise our domestic business plan to adapt to international business
environment.

We can conclude that the strategic planning in international market seems more
unpredictable, complex, difficult and challenging as more number of country are
entered for international business. On the other hand, the firms in domestic market
may conduct strategic planning easier, simpler, and smoother.

Ultimately, strategic planning on the domestic and the international will have to
develop two very different approaches to achieve the firm goals

c. From the point of view INTERNATIONAL HUMAN RESOURCES, this statement is

far from the truth.

There is a need to better understand the human resources as a different study as

to domestic business and as to international business aspects. For domestic
company, one organizational structure can be set up and followed by all future or
other locations of expansion within the country in the same manner. This makes it
easier for HR to examine performance and potential risk factors within the company.
However, in an international setting one cannot prepare the same particular style of
human resource management because each geographic area needs a unique
human resource management styles and different type of human resources. Thus,
 studying the increasing complexities of the workforce because of diversity of
cultures, legal systems, business practices, and others is a must to successfully
manage its human resources. Not only must the company follow all laws in their
home country, HR must make sure all laws in all foreign countries of operation are
being followed.

We also need to consider that doing international business requires multi-lingual,

multi-strategic & multi-cultural human resources to handle varied risks spread over
countries so can develop them as a competitive advantage of the company. Thus the
task of human resource management is much more complex when it comes to
recruitment, development, staffing and maintenance.

4.

Study the
market/
Conduct
market
research
Evaluate the
Make an
changes in
international
the business plan
environment

Evaluate and create

Evaluate strategies and
determine methods
the to distribute goods
results or provide services

Implement
the strategies Create a good
and methods team

FUNCTIONAL PROCESS IN DOING BUSINESS INTERNATIONALLY