Contemporary Issues in Business - Achieving Effective Global Operations - Essay Example

CONTEMPORARY ISSUES IN BUSINESS Introduction Business operations are commonly faced with challengeswhich must become effectively mitigated for successful operations. Many of the management issues affecting global operations could be identified as internal or external factors. The external factors commonly result form factors which seek to regulate the economic system or the market, within which a business operates. The internal drivers refer to the aspects which are contained within the organisations, and are utilised in enhancing business operations. All these drivers must be considered in seeking to ensure effectiveness of the global operation, and mitigate other challenges which organisations face within the global arena (Hitt et al. 2012). While globalisation presents an attractive approach for business expansion, numerous challenges results following the expansions. Existing differences in legal, economic and political situation present a fundamental challenge for international businesses. The diversity which is achieved through globalisation must also be effectively managed to minimise negative attributes from developing. External drivers External drivers are commonly associated with the various determinants of the economic system and the market within which a business operates. These are factors which the organisation cannot control, and are regulated through the market forces of other forms of regulation beyond the control of the organisation. Competition Within the different regions in which organisations operate, competition remains an omnipresent aspect which presents a significant challenge to business managers. Organisations must factor the aspect of competition and ensure they adopt competitive approaches for undertaking their business activities. Appreciating the existence of competition becomes an essential element in enabling organisations to adopt competitive measures which would provide the organisation with a competitive advantage, within a market (Krugman & Obstfeld 2009). The fundamental challenges for organisations operating in different geographical regions remain achieving effective competition within unfamiliar markets. While the business might be undertaking same activities, the implementation methods must be specific to the different settings. Customers The business customers remain diverse and have different perceptions. Organisations operating in different cultural and geographical regions find difficulties in satisfying customers form different markets. The customer requirements within the various markets commonly vary hence; business must adopt unique and differentiated approaches in seeking to enhance customer satisfaction. The diversity of customer requirements becomes a challenge to the businesses because of the necessity to understand the customers. The customers on the other hand must perceive the organisations as being supporting of their beliefs. The organisations can only achieve this perception through effective management of the internal drivers and determinants of organisational culture. The business environments The business environment is commonly governed by different factors which are essential in determining the operations of businesses. While many businesses might operate within a specific market, there are numerous factors which remain fundamental determinants of the business environment. These factors present a significant challenge to business managers, operating in diverse environments (Buckley & Casson 1999). Economy – the economy remains the fundamental determinant of the method of operations which businesses must adopt. The stability of the economic system within a region commonly affects factors like the income, which is a fundamental determinant of customer purchasing power Politics – politics form an essential aspect which defines other elements like taxation within an economic system. Regulations regarding business operations are commonly implemented politically within many regions around the world. The existing political regimes within a country remain fundamental determinants of the economic stability. The existence of regulation within different markets remains a result of political activities within a country. Sociocultural diversity – this is a determinant of the business environment which commonly focuses on the people existing within a specific region. These individuals commonly become the customers and employees of the organisation. The organisation must support the cultural values and beliefs which the people within the region hold. These remain the determinants of the perceptions individuals hold regarding the organisation, which might be considered “foreign”, when they present different ideologies. Business uncertainties Business uncertainties commonly result for changes which might occur within the business environment. The factors identified as defining the environment remain susceptible to change, and commonly present adverse effects to business operations (Bartlett & Beamish 2010). These uncertainties like political uprisings presents significant challenges to the management of business and are sometimes identified as potential business risks. An assessment of these aspects remains essential before organisation can begin operations within different regions Internal drivers These are the elements which the organisation must continuously deliver in order to sustain business operations. These are commonly the challenges which result from business operations and depend on the business activities. Performance Profitable organisational operations must become efficiently monitored from within the organisation. This becomes defined as the performance of the organisation. The organisations must be able to adhere to different regulations existing within the various geographical regions where they operate. Multinational businesses commonly measure performances based on the international level of operations as opposed to the different geographical regions in which they operate. The organisational performance becomes a fundamental measure of the effectiveness of the operations within different regions. These measures are commonly defined according to the existing regulations governing business operations. Leadership This is commonly depicted through the performance of the management in undertaking responsibilities on behalf of the organising. The managers must provide sufficient and effective leadership to ensure that other employees within the organisations remain motivated and desire to achieve the best for the organisations. The management of an organisation performs a fundamental role in ensuring success within the organisation. The establishment of the organisational culture dependents heavily on the leadership provided. Aspects of discrimination by the top managers commonly initiate the glass ceiling theory within many organisations. Meritocratic approaches to promotions within the organisation could effectively overcome this problem which commonly faces many organisations (Mendonca 2001). Employees The employees of an organisation remain the fundamental causes and determinants of the organisational culture. Their behaviour is commonly utilised by individuals form outside the organisations in identifying and defining how the organisation work. Empowered employees within an organisation might immensely contribute to successful operation of a business operating within diverse cultural settings (Schein 2010). The work relationships existing between different employees remain essential determinants of the organisational culture and present a challenge in organisations operating in different cultural settings. Responsiveness This refers to the capacity by an organisation to respond effectively and positively to changing global business environments. Organisations operating in different geographic locations must ensure effective response to external forces which directly affect business operations. This commonly refers to the organisations capability to react positively to the internal and external challenges which occur. The responsiveness of the organisation becomes a fundamental determinant of the organisation’s profitability and success in business operations. Global management Globalisation has been identified as the ultimate result of business operations within different regions. Diversification of business operations through globalisation presents surmountable business risks to multinational operations. In effectively achieving globalisation of business operations, organisations commonly utilise different approaches in mitigating the existing discrepancies, within different regions (Gangopadhyay & Chatterji 2005). Effective management of these discrepancies presents organisations with a smooth transformation into globalised organisations. Organisations must effective address different challenges of globalisation at the global level. Strategic development for example, becomes diversified and expanded and must be approached from a global perception, within the same organisation. The developed strategies must remain effective within different regions. The numerous challenges faced in global management include the following. Exchange rates The global currency markets keep on fluctuating because of the various economic factors existing within different economic regions. The effects of currency valuations commonly have detrimental effects on the profitability of organisations operating in the global market. This presents a significant challenge when economic systems become faced with effects of fluctuation. Under such situations production costs sometime increase as a result of inflation, this is sometimes controlled through regulation. In seeking to minimise the effects of varying production costs for commodities, many multinational corporations undertake manufacturing activities in from single location. Coca cola, for example, sells transports finished products for bottling to all the countries. Production costs become controlled through manufacturing from a single location. International conflicts Political conflicts existing between countries have commonly presented detrimental effects to businesses operating internationally. Corporations become awarded operation certificates based on their origins. Negative perceptions commonly exist between people based on the perceptions of a certain country. Multinational organisations must remain independent of political attachment and identify themselves as global entities rather than regional entities (Bartlett & Beamish 2010). This effectively enables organisations to become perceived as independent of any political attachment. Many multinational corporations undertake various activities within different regions to overcome the effect of international conflicts. The car manufacturer, Toyota, operates globally and has manufacturing plants in different locations. This enables the organisation to sell within different countries despite the existence of conflicts between different nations. American corporations might find immense difficulties in seeking market entry into the Arab league nations, because of the war on terror, which resulted in international conflicts between the countries. Government policies Government policies are commonly implemented in seeking to regulate business conduct within various economic systems. These regulations commonly present challenges to multinational corporations as they sometimes create barriers to international trade. Regionalisation of economic systems has significantly reduced government control over different economic elements regarding global business (Sinha & Sinha 2008). Within the euro region, for example, all government regulations must adhere to the European Union regulations. This has significantly opened up the borders and increased cross-border business within Europe. Multinational operations must consider the different government policies which might be implements, and subsequently affect business operations, within the global market Diverse workforce Diversity remains an aspect which must be effectively managed in seeking to ensure effectiveness of global operations. Within the global market, the aspect of diversity remains extremely wide and presents numerous challenges to managers working within multinational corporations. Employee diversity remains a significant attribute which an organisation’s management must effectively understand in order ensure effective operations(Daft 2009). Within these organisations employee diversity ranges from cultural values, skills, beliefs and many other attributes which differentiate individuals. Efficiency of the management must ensure that some minority groups within the organisation do not feel oppressed by the management. Such oppression becomes defined by the glass ceiling theory within large corporations. The organisational culture remains an essential determinant of the existence of diversity of the workforce. A diverse workforce remains an inevitable element within multinational corporations and this must become effectively handled for successful business operations. The presence of prejudice and ethnocentrism within many organisations results in the occurrence of discrimination, stereotypes and even the problem of glass ceiling. Workplace discrimination still remains a challenge for many organisations and not only multinational organisation (Cotter et al. 2001). The discrimination remains commonly associated with the existence of difference between employees, which result in different beliefs and cultural values. Prejudice This is the holding of perceptions regarding individuals from certain background. The element of prejudice results in judgements being made subjectively, rather than objectively. Within the working environment, employees should be evaluated according to their performances in undertaking their responsibilities. Predetermined perceptions commonly result in errors regarding performance of individuals. In the management of diverse workforce, prejudice presents a challenge for managers and decisions based on prejudicial judgements are commonly erroneous. Many countries and organisations commonly have regulation regarding prejudice within the workplace, though implementation of the regulations remains difficult because of the organisational culture. Ethnocentrism This has been defined as the belief that an individual is superior to another person within the same environment. Ethnocentrism remains a common problem among many individuals working within the corporations with a diverse workforce. Personal beliefs commonly become associated with the development of an ethnocentric perception towards other individuals. Many multinational corporations pride themselves as having diverse workforces; hence possess significant skill in the delivery of certain professional attributes. Conclusion Global business is commonly faced with numerous challenges which do not face other businesses operating within a limited geographical region. The global business becomes subjected to different operational regulations within different regions. This effectively necessitates the adoption of operations which adhere to the existing regulations and also ensure competitiveness of the business. Achieving effective global operations requires the adoption of operation methods which enhance the diversity within the organisation(Daft 2009). The diversity of global business occurs within different segments and is immensely affected by various activities. A consideration of the various cultural values and the aspect of diversity remain essential in achieving successful global operations. References Bartlett, C. & Beamish, P., 2010. Transnational Management: Text, Cases & Readings in Cross-Border Management 6th ed., New York: McGraw-Hill Education. Buckley, P.J. & Casson, M., 1999. A theory of international operations. In The Internationalization Process of the Firm. London: International Business Thomson, pp. 55–60. Cotter, D.A. et al., 2001. The glass ceiling effect. Social forces, 80(2), pp.655–681. Daft, R.L., 2009. New Era of Management 2nd ed., New York: Cengage South-Western. Gangopadhyay, P. & Chatterji, M., 2005. Economics of Globalisation, London: Ashgate Publishing. Hitt, M.A., Ireland, R.D. & Hoskisson, R.E., 2012. Strategic Management Cases: Competitiveness and Globalization, London: Cengage Learning. Krugman, P.R. & Obstfeld, M., 2009. Economies of Scale, Imperfect Competition and International Trade. In International Economics - Theory and Policy. Calcutta: Pearson Education India, p. 142. Mendonca, M., 2001. Preparing for ethical leadership in organizations. Canadian Journal of Administrative Sciences, 18(4), pp.266–276. Schein, E.H., 2010. Organizational Culture and Leadership 4th ed., New York: John Wiley & Sons. Sinha, P.K. & Sinha, S., 2008. International Business Management: A Global Perspective, New Delhi: Excel Books.  Read More