Integrating Multinational Firms Into International Economics - Research Paper Example

The Challenge of Global Management The article “The Challenge of Global Management” by David B. Montgomery and George S. Yip published in the year 2000 talks about the challenges faced by multinational companies in managing global customers. Here a critical summary of the article is provided. Companies in their attempt to reduce cost and spread their business in the international arena are seeking global contracts from their suppliers. Previously multinational companies gave free hand to their national subsidiaries to buy on global basis, but this approach faced a number of problems like product inconsistency, incompatibility of equipment.

This led them to buying on more centralized basis. Multinational firm formulate global strategies and therefore they demand international standard from their suppliers. The vital way to make Global customer management a success is to amalgamate the program with the firm’s overall corporate strategy. Simply integrating domestic or regional account management into the program will not bring expected results (Wagner & Barkley, 2009). In this era of globalization, Global Customer Relationship Management is becoming very important and it can be achieved by proper and methodical application of activities of Customer Relationship Management by firms who have business in different countries or firms which have customers based in different countries (Montgomery and Yip, 2000; Ramaseshan, Bejou, Jain, Mason & Pancras, 2006).

This article suggests a structure that can guide the managers to maintain better relationship with global customers. If Global Account Management is properly implemented the companies can achieve customer satisfaction and improved performance in the context of profits and revenues. Implementation of Global Account Management can be quite expensive. So the companies need to learn the extent of demand of customers for such services and the process of implementing such services. Several factors are to be considered before designing the framework of Global Account Management like globalization drivers of customers and suppliers, the variety of demands of customers for Global Account Management, the variety of supply from suppliers of such services and also the effect of performance of Global Account Management on retention of customers and on profits and revenues (Montgomery and Yip, 2000).

Companies now develop globally intricate strategies which include development of global sourcing in coordination with their global production system. As a Global Account Manager it is vital to know the business agenda of the global customers. There is a difference in the way the company’s customer and the customers’ customer buy and use products and services. This has to be considered to gain clarity on the customer’s strategy and priorities. From interviews global customer’s requests on various aspects of Global Account Management have been recognized.

Global customers find a single point of contact more convenient for negotiation purposes. Global customers need better coordination of supply of their required products or services. They also need globally uniform prices as well as global uniformity in terms of trade and finally they need standardized range of products and services (Montgomery and Yip, 2000). The companies need to make changes in their management and organization to implement Global Account Management. The manager needs to have a dedicated sense of responsibility for global accounts.

The manager needs proper support staff for smooth operations. To maintain and evaluate global accounts it is necessary to keep track of revenues and profits on global basis rather than national or regional basis. A Global Account Management program should comprise processes for reporting not only on earnings or profits but on client satisfaction and presentation as well. Global account managers need to be evaluated on global basis. Finally, global account management centers on a mutual relationship and hence there must be continuous flow of feedback between the supplier and the customer.

Global account management is not an easy task but it is necessary for the growth of business worldwide. The complexity of the challenge of managing global accounts will depend upon how far Global Account Management has evolved in a company. References Montgomery, D.B. and G.S. Yip, (2000). The Challenge of Global Customer Management, MM Winter. Ramaseshan, B. Bejou, D. Jain, S.C. Mason, C. and J. Pancras (2006), Issues and Perspectives in Global Customer Relationship Management, Journal of Service research, 9: 87-94 Wagner, P.

& Barkley, B.T. (2009). Global Management Program. New York: McGraw Hill Professional, 2009.