There are some basic functions that every business manager has to perform routinely. These functions apply to international managers as well. Due to the peculiar nature of international business, however, international managers have to perform them a little differently.
International business basically refers to commercial transactions that involve more than one country. Globalization has made it possible for business organizations and nations to carry out such transactions.
Business managers have to perform several important roles to earn profits and minimize losses. Since cross-border transactions require large-scale operations, management becomes very difficult. Due to this reason, international management has gained immense significance over the years.
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Role of International Managers
Planning, organizing, staffing, directing and controlling are basic functions of management. Given the peculiar characteristics of international business, these functions also require some changes in implementation.
To do business internationally, managers must first plan their approach well. They have to decide how exactly will they be conducting their activities.
This includes deciding whether they will export products or enter into joint ventures with a local business. They may even function as an MNC by opening offices in various countries by operating from one location.
International planning always requires a thorough understanding of local political, social and economic environments. These factors also include political stability, government pressure, intellectual property policies, competition, etc.
It is not possible for an international business to operate in multiple countries using standard and common practices. International managers always have to organize their business to adapt to local requirements of all countries.
Firstly, they have to create a command hierarchy that involves people operating in multiple countries. Then, they have to adhere to local laws and regulations of the nations they operate in. Managers even have to keep local business practices and customs in mind while organizing.
International businesses also have complicated management hierarchy structures as people operate from many nations. Managers must ensure that they have a robust communication protocol to deal with this problem. Employees must always be able to address their grievances, ideas and suggestions.
International managers next have to figure out whether they will hire local employees or send their own staff abroad. Consequently, they will need to be aware of all local labour laws if they decide to hire employees locally.
Directing can often become very difficult when people from multiple countries work together. Since cultural differences influence people to work differently, managers have to adapt themselves in every unique situation. Even language can become a barrier in cross-border business.
To deal with such problems, managers can try to involve people of diverse cultures and nationalities in management. Human resource departments of large companies always try to encourage cultural diversity in their organizations. They even conduct sensitivity seminars to make employees and managers aware of diverse cultures among their workforces.
The problems that affect the function of directing apply to the process of controlling as well. Controlling requires meetings between people which helps in the exchange of information on a routine basis. Reporting and inspections are also important aspects of control.
Cultural differences amongst employees can always affect these kinds of functions. Managers, thus, should be able to adapt to all peculiarities and facilitate the controlling process.
Solved Examples on International Managers
Question: Mention the missing word in these following sentences.
(1) __________ has made it possible for business to become international.
(2) The __________ process of management requires managers to be aware of local labour laws.
(3) __________ requires managers to thoroughly understand social, political and economic environments.
(4) Managers can include people of diverse cultures to curb possible problems arising from __________.
Answers: (1) globalization (2) staffing (3) planning (4) directing