Why is Managing an international Business Different from a Domestic Business - Essay Example

Why is managing an international business different from a domestic business? Discuss reasons/issues involved Globalization is a term identical with big companies, multinationals and NGOs, as well as a host of other industries, one such of them keeping pace with time is the hotel management business. These companies and the similar ones tend to go on the international map in order to seek for larger and much bigger businesses than they had when they were confined in a local region or sometimes at a national level. Globalization also thus became a way for the hotel companies to take up their growth at a rate which not only satisfied their shareholders but also avoided the possible problems that were attached with this very new happening of business world. Everyone related with business tries to make an effort at gaining possible new markets internationally but at a risk worth taking. No company would like to grow beyond means and afford losses be it for a single month, no matter. Trying to go global and market at the international level is one risk which has to be taken with the bosses and shareholders being very calculated as there is a potential chance of falling back to the old ways the business carried out before it went global. (Korzeniowski, 2001) There are certain risks and issues when an organization tries to go the international way as it has to take a global stance by becoming worldwide. The goal of international business is basically to create important value by taking care of its products and services or other items in a hard line approach whereby the business attached with it continuously prospers and grows beyond means for the better. No company can afford a business doing the opposite of it, extracting losses for all and sundry and thus pushing the business to the wall. (Wells, 1998) The international business of a particular company will then remain only a dream and the shareholders will hardly hope for a miracle to change their business. Domestic businesses are so much easier to understand and thus run. International businesses change the course of working methodologies in an instant fashion. One of the major issues that are faced by firms when they decide to go the global way is to understand the culture and language of the place they have invested their money and resources in. This means that the new alien land becomes a problematic equation for the people who took the decision to move to that city or region initially. Every country has its own unique set of principles and rules which need to be followed and in this case the firm which has opened up its offshore offices needs to make sure that it complies and agrees with these rules and procedures even before it decides to open these new offices. (Benton, 1994) The legislation of the region or country might be so hard to understand that the organization even before entering into this new territory can simply run away. This suggests that the organizations must be ready always to keep away the problems that might arise at some point in time within the new operational territory of the already existing business. Firms are having a hard time understanding the bureaucratic language which is conveyed within the different channels of a country. This suggests that the hard line policies do not bend backwards for a major corporate player which is entering into the market. The policies are either too strong to be changed or just not given the permission to be made amendable at some point in time. The problems could be endless in the whole discussion, however the significant thing is to understand what is applied where and which kind of meaning is related with the different activities and tasks. The bureaucracy of a particular nation does not allow the big companies and organizations from entering within it since it fears that people would easily go for them and hence forget the public sector. (Kay, 1995) The attraction that the private firms and indeed the whole of the private sector bring with it is something of a confusing situation. This situation is made understandable by the presence of private firms and organizations within the public sector domain. If the government with the help of its different institutions and corporations does not allow the private firms and the conglomerates to have their say within the different matters of the country, it is very important that the whole infrastructure of the nation would be brought to a standstill and people would have negative feelings about the private sector and/or the public sector. The firms understand that they could earn so much more if they invest within different nations of the world. This could be due to their future thinking and visionary policies. However what they forget is that in the search of getting to the right people, are they missing the relevant target audiences within the present markets? This question needs to be answered so that one can have a proper perspective of the issue that is present in the current times. The motivation could be to earn as much in terms of revenue as possible or it could be in the form of having a sound base from where the organization can bring in more incentives for itself when it compares itself with the different organizations working under the same industrial zone. This could be a point which could have give enough confidence to this organization and hence raise its standards immediately, thus forcing it to reach out to newer and unexplored markets across the different world regions. (Barr, 2000) The basis of the motivation however is more or less from the angle of earning more and more revenue as well as having a solid connection with the correct target audience. These motivations could fade out when the pressures are too much to handle and they are simply out of control due to domestic pressures, which seem to come from the local companies and organizations as well as the government which has its opinion in every matter of this new entrant possible. International businesses get introduced in different nations due to other reasons as well. This could be due to their interest and potential in the growth environment of the new country which could have a good impression on the target audiences of the new country. This increases the sales potential of the organization’s products and/or services and in the end everyone is a winner. However the local organizations face a lot of problems in the whole setting since they are the ones who have a cut down on their share of spending and revenue coming from the similar set of target audiences. Furthermore, there is a race to cut through the clutter and make the organization heard amongst the different firms which are present with respect to their own respective offerings, services and products. The mergers and alliances are made with different companies and hence they are forced to come into a region where they never thought of even entering in the past. This is made more discouraging by the fact that this new company which is entering an alien market has to face challenges much like the companies which are already in the business and are facing problems on a regular basis. (Dunning, 2001) Formulating organizational strategies in such a manner that it boosts trade everywhere is the important word in the present times and it must be stuck on to no matter how trying the circumstances are, with respect to the changing environmental and industrial regimes in the wake of the political and economic systems in place. Global organizations need to evolve over a period of time to remain one step ahead of where they are presently and for doing the same, there is a need to do what has been the norm, however creativity is one such aspect that must be considered in the whole scheme of thing too. The hierarchical systems of these organizations are something that must be understood in the proper perspectives before one move on further towards the relevant understanding criterion, which sadly has been different in differing circumstances, times and regimes. Works Cited Barr, Pamela S. When Firms Change Direction. Oxford University Press, 2000 Benton, Ted. Social Theory and the Global Environment. Routledge, 1994 Dunning, John H. Multinational Firms: The Global-Local Dilemma. Routledge, 2001 Kay, John. Why Firms Succeed. Oxford University Press, 1995 Korzeniowski, Paul. The Challenges of Going Global. Business Communications Review, Vol. 31, 2001 Wells, Louis T. Multinationals and the Developing Countries. Journal of International Business Studies, Vol. 29, 1998 Word Count: 1,373 Read More