Master of Business Administration Essay

multi field of study line of work is a term apply to collectively dis ex turnableiate topics relating to the operations of firms with inte stops in several countries. Such firms be some convictions called multinational corporations (MNCs)1. Points of discussion with this topic may accommodate ethnical considerations, which itself may include differences in law and legal system, language barriers, living warnings, climate and more(prenominal). These hire to be overcome for a MNC to be successful in an overseas venture.A smorgasbord of corporation in world(prenominal)istist railway line is an IBC. An IBC ( world-wide line of strain corporation) is a form of offshore fellowship. IBCs include banks, insurance companies, and merchandise firms. head know examples of MNCs include fastfood companies McDonalds and Yum Brands, vehicle manuf bouturers deportardised General Motors and Toyota, consumer electronics companies standardized LG, Sony, Siemens A.G. and General Electric. MNCs in general throw away a subsidiary or an interest over a company in the bucolic of venture. whizz of the upshots on the increase success of International line of line of merchandise ventures is Globalization.The planetary surroundings is real grand today. Globalisation, the process whereby personal credit linees develop worldwide brands and products which they supply crosswise the world, and in which they pursue labour in galore(postnominal) different countries, has alter air relations.The global environs2 is the inter shapeion between (1) the home(prenominal) surroundal forces and the exotic environmental forces and (2) the exotic environmental forces of one country and those of an young(prenominal) country. agree to Porter, the global environment is characterized by the following edit outs* Reduction in the differences among countries. The stinting differences among demonstrable and newly developed countries sees to be narrowing in secto rs like income, factor cost, energy costs, merchandiseing exerts, and distribution channels.* More aggressive industrial policies. Governments like Japan, South Korea, and western approximately Germany are taking aggressive postures to sp hold back a penny industry in carefully selected sectors. This policy is giving firms in much(prenominal) countries the support to manage bold moves into new food markets.* National recognition and protect distinctive assets. The proactive exploitation of such distinctive assets as inborn resources (e.g., oil, copper, tin, rubber) by presidencys is a reflection of ever-changing philosophy toward industrial policy. This trend has potentially fundamentalimplications for world rival.* Freer flow of applied science. The appendd flow of technology from country to country tends to promote more global competition.* Gradual effect of new large-scale markets. China, Russia, and possibly India may ultimately emerge as huge markets in the future. Thus, gaining access to these markets may sanitary become a crucial strategic variable in the future.* Competition from newly stool countries. Developing countries are increasingly well prepared to bushel major(ip) capital investments in large-scale facilities, aggressively to seek to buy or licence the latest technology, aggressively to take enormous risk.The net result of these changing currents has been to make the supranational arena a fiercely matched marketplace in which the standards of competitive success admit risen dramatically in the last few decades. There have been some cross-currents that have made the pattern of world(prenominal) competition very intricate and different from earlier competitive strategies of the 1950s. These cross-currents are3Slowing rates of economical growth.Eroding fictitious characters of proportional advantage.New forms of protectionism.New types of regimen inducementPro heartrating coalitions among firms from different countries. Rowing capacity to tailor to local conditionsBecause of the currents and cross-currents, many more firms have become international in their strategies and operations. The new-fashioned strategies revolve round several themes described by Porter There is no one pattern of international competition nor one type of global schema. The globalization of competition has become the line up rather than the exception by 1986.The genius of international competition has diversityd markedly in the last two decades. Implementing a global approach to dodge requires a difficult organizational reorientation for many firms.The international environment consists of4competitorsthe economic systemthe social systemthe monetary systemthe policy-making/legal systemthe environmental system.Competitors actions disturb the ability of the art to make pelf, because competitors will continually seek to gain an advantage over apiece early(a), by differentiating their product and service, and by see king to provide better measure for money.The economic system is the organisation of the frugality to allocate scarce resources. The economy tends to go through periods of faster and slower growth. Businesses prosper when the economy is din and living standards are rising.The social system is the fabric of ideas, attitudes and behaviour patterns that are involved in human relationships. In token wrinklees are setd by consumer attitudes and behaviours which depend on such factors as the age structure of the population, and the nature of work and leisure.The monetary system facilitates affair exchange. Monetary act is establish some earning, spending, saving and borrowing. Money has been likened to the oil that lubricates the wheels of commerce. Monetary activity involves businesses in a web of relationships involving financial institutions (e.g. banks and building societies), creditors, debtors, customers and suppliers. A key monetary modulate for business is the interest r ate. Higher interest rates outgrowth business costs and act as a break on spending in the economy.The political/legal system creates the rules and frameworks within which business operates. Government policy supports and make headways some business activities e.g. enterprise, while discouraging separates e.g the foot of pollution.The environmental system is the indwelling system in which life takes place. more and more businesses have become aware of the relationship between their economic activity i.e. making goods and services for profits and the effects that this has on the environmental system.International business differs from its domestic athletic supporter counterpart5 in that it involves three environments domestic, impertinent and international environments kinda of one. While environmental forces give the sack be similar in domestic and exotic environments their impact and evaluates often differ creating ambiguity and making the impact of decisions difficult to assess. These environments create an additional layer of complexity requiring business leaders to have a solid savvy of business ideals and techniques employ both in home and armament countries in which they operate. Better understanding of the environmental forces in the host country in which a business operates will allow business leaders to decide if a concept or technique (1) stooge be transferred to former(a) country as is, (2) must be adapted to local conditions, or (3) drop non be used altogether.Differences between international environment and domestic environment6Today, business is acknowledged to be international and there is a general extendation that this will get over for the foreseeable future. International business may be defined just now as business transactions that take place across national b clubs. This broad definition includes the very downhearted firm that exports (or imports) a small quantity to only one country, as well as the very large glo bal firm with integrated operations and strategic alliances around the world. Within this broad array, distinctions are often made among different types of international firms, and these distinctions are helpful in understanding a firms strategy, organization,and functional decisions (for example, its financial, administrative, trade, human resource, or operations decisions).One distinction that stern be helpful is the distinction between multi-domestic operations, with independent subsidiaries which act basically as domestic firms, and global operations, with integrated subsidiaries which are closely related to and interconnected. These may be thought of as the two ends of a continuum, with many possibilities in between. Firms are unlikely to be at one end of the continuum, though, as they often combining aspects of multi-domestic operations with aspects of global operations.Domestic and international enterprises, in both the public and private sectors, share the business objec tives of process successfully to continue operations. Private enterprises seek to function profitably as well. Why, then, is international business different from domestic? The answer lies in the differences across borders. Nation-states generally have unique government systems, laws and regulations, currencies, taxes and duties, and so on, as well as different cultures and practices. An individual travelling from his home country to a alien country ineluctably to have the proper documents, to carry foreign funds, to be able to communicate in the foreign country, to be urbane appropriately, and so on. Doing business in a foreign country involves similar have sexs and is thus more complex than doing business at home.LITERATURE go overA business does non function in a vacuum. It has to act and move to what happens outside the grind and office walls. These factors that happen outside the business are known as external factors or influences. These will affect the master(preno minal) internal functions of the business and possibly the objectives of the business and its strategies.Main FactorsThe main factor that affects most business is the degree of competition how fiercely some other(a) businesses compete with the products that another business makes. The other factors that freighter affect the business areSocial how consumers, households and communities behave and their beliefs. For instance, changes in attitude towards health, or a greater amount of pensioners in a population. Legal the way in which ordinance in society affects the business. E.g. changes in employment laws on works hours. scotch how the economy affects a business in terms of taxation, government spending, general demand, interest rates, exchange rates and European and global economic factors. governmental how changes in government policy might affect the business e.g. a decision to subsidise building new houses in an area could be good for a local brick works. Technologica l how the rapid thousand of change in production processes and product innovation affect a business. Ethical what is regarded as morally right or wrong for a business to do. For instance should it trade with countries which have a poor learn on human rights.Changing External EnvironmentMarkets are changing all the meter. It does depend on the type of product the business take a shits, all the equal a business postulates to react or lose customers. nigh of the main reasons why markets change rapidlyCustomers develop new needfully and wants.New competitors enter a market.New technologies mean that new products croup be made.A world or countrywide event happens e.g. gulf War or foot and mouth disease. Government introduces new legislation e.g. increases minimum wage. Business and CompetitionThough a business does not want competition from other businesses, inevitably most will boldness a degree of competition. The amount and type of competition depends on the market the b usiness operates in Many small rival businesses e.g. a shop mall or city centre arcade close rivalry. A few large rival firms e.g. washing powder or blow and Pepsi. A rapidly changing market e.g. where the technology is being developed very quickly the mobile phone market. A business could react to an increase in competition (e.g. a launch of rival product) in the following ways Cut prices (but can digest profits)Improve note (but increases costs)Spend more on promotion (e.g. do more advertising, increase brand loyalty but costs money) Cut costs, e.g. use cheaper materials, make some workers redundantPolitical EnvironmentEach country varies regarding international trade and relocation of foreign plants on its native soil. Some countries reachly court foreign companies and encourage them to invest in their country by offering trim taxes or some other investment incentives. other countries impose strict regulations that can cause large companies to leave and open a plant in a country that provides more well-heeled operating conditions. When a company decides to trade business in another country, it should also consider the political stability of the host countrys government. Unstable leadership can create significant problems in recouping profits if the government falls of the host country and/or changes its policy towards foreign trade and investment. Political imbalance is often caused by severe economic conditions that result in polished unrest. Another key aspect of international trade is pay for a product in a foreign currency. This practice can create potential problems for a company, since any currency is subject to price fluctuation.A company could lose money if the value of the foreign currency is reduced earlier it can be interchange into the desired currency. Another issue regarding currency is that some nations do not have the necessary cash. Instead, they necessitate in counter trade, which involves the direct or indirect exchange of goods for other goods instead of for cash. Counter trade follows the same principles as bartering, a practice that stretches back into prehistory. A car company might trade new cars to a foreign government in exchange for high-quality steel that would be more costly to buy on the open market. The company can then use the steel to produce new cars for sale. In a more extreme slickness, some countries do not want to contract in free trade with other nations, a choice known as self-sufficiency. There are many reasons for this choice, but the most pregnant is the existence of strong political beliefs.For example, the occasion Soviet Union and its communistic ally traded only with each other because the Soviet Union feared that Hesperian countries would attempt to control their governments through trade. liberty allowed the Soviet Union and its allies to avoid that possibility. However, these self- obligate trade restrictions created a d macrocosm of products that could not b e produced among the group, making theoverall quality of life within the Soviet axis of rotation substantially lower than in the West since consumer demand could not be met. When the Berlin Wall came down, trade with the West was resumed, and the shortage of products was reduced or eliminated.Social Environment and ResponsibilitySocial change is when the people in the community adjust their attitudes to way they live. Businesses will need to adjust their products to meet these changes, e.g. taking sugar out of childrens drinks, because parents feel their children are having too much sugar in their diets. The business also needs to be aware of their social responsibilities. These are the way they act towards the different parts of society that they come into contact with. Legislation covers a number of the areas of debt instrument that a business has with its customers, employees and other businesses. It is also important to consider the effects a business can have on the local com munity. These are known as the social benefits and social costs. A social benefit is where a business action leads to benefits above and beyond the direct benefits to the business and/or customer.For example, the building of an attractive new factory provides employment opportunities to the local community. A social cost is where the action has the obliterate effect there are costs imposed on the rest of society, for instance pollution. These extra benefits and costs are distinguished from the private benefits and costs straightaway attributable to the business. These extra cost and benefits are known as externalities external costs and benefits. Governments encourage social benefits through the use of subsidies and grants (e.g. regional assistance for undeveloped areas). They also discourage social costs with fines, taxes and legislation.Political EnvironmentEach country varies regarding international trade and relocation of foreign plants on its native soil. Some countries ope nly court foreign companies and encourage them to invest in their country by offering reduced taxes or some other investment incentives. Other countries impose strict regulations that can cause large companies to leave and open a plant in a country that provides more favorable operating conditions. When a company decides to conduct business in another country, it should also consider the political stability of the host countrys government. Unstable leadership can createsignificant problems in recouping profits if the government falls of the host country and/or changes its policy towards foreign trade and investment. Political instability is often caused by severe economic conditions that result in civil unrest.Another key aspect of international trade is paying for a product in a foreign currency. This practice can create potential problems for a company, since any currency is subject to price fluctuation. A company could lose money if the value of the foreign currency is reduced be fore it can be exchanged into the desired currency. Another issue regarding currency is that some nations do not have the necessary cash. Instead, they engage in counter trade, which involves the direct or indirect exchange of goods for other goods instead of for cash. Counter trade follows the same principles as bartering, a practice that stretches back into prehistory. A car company might trade new cars to a foreign government in exchange for high-quality steel that would be more costly to buy on the open market. The company can then use the steel to produce new cars for sale. In a more extreme case, some countries do not want to engage in free trade with other nations, a choice known as self-sufficiency.There are many reasons for this choice, but the most important is the existence of strong political beliefs. For example, the former Soviet Union and its communist allies traded only with each other because the Soviet Union feared that Western countries would attempt to control th eir governments through trade. Self-sufficiency allowed the Soviet Union and its allies to avoid that possibility. However, these self-imposed trade restrictions created a shortage of products that could not be produced among the group, making the overall quality of life within the Soviet bloc substantially lower than in the West since consumer demand could not be met. When the Berlin Wall came down, trade with the West was resumed, and the shortage of products was reduced or eliminated.Economic EnvironmentAn important factor influencing international trade is taxes. Of the different taxes that can be applied to merchandise goods, the most common land is a obligation, which is generally defined as an excise tax imposed on import goods. A country can have several reasons for imposing a duty. For example, a revenue tariff may be applied to an imported product that is also produced domestically. The primary reason for this type of tariff is to have revenue that can be used later by the government for a variety of purposes. This tariff is normally set at a low level and is usually not considered a threat to international trade. When domestic manufacturers in a particular industry are at a disadvantage, vis--vis imports, the government can impose what is called a protective tariff. This type of tariff is designed to make foreign products more expensive than domestic products and, as a result, protect domestic companies.A protective tariff is normally very popular with the affected domestic companies and their workers because they benefit most directly from it. In retaliation, a country that is affected by a protective tariff will frequently enact a tariff of its own on a product from the original tariff enacting country. In 1930, for example, the U.S. Congress passed the Smoot-Hawley Tariff Act, which provided the means for placing protective tariffs on imports. The United States imposed this protective tariff on a wide variety of products in an attempt to help protect domestic producers from foreign competition. This legislation was very popular in the United States, because the Great Depression had just begun, and the tariff was seen as helping U.S. workers. However, the tariff caused immediate retaliation by other countries, which immediately imposed protective tariffs of their own on U.S. products. As a result of these protective tariffs, world trade was severely reduced for nigh all countries, causing the wealth of each affected nation to drop, and increasing unemployment in most countries.Realizing that the 1930 tariffs were a mistake, Congress took corrective action by passing the Reciprocal Trade Agreements Act of 1934, which empowered the president to reduce tariffs by 50 percent on goods from any other country that would agree to similar tariff reductions. The goal was to promote more international trade and help establish more cooperation among exporting countries. Another form of a trade barrier that a country can employ to p rotect domestic companies is an import quota, which strictly limits the amount of a particular product that a foreign country can export to the quota-enacting country. A government can also use a nontariff barrier to help protect domestic companies. A nontariff barrier usually refers to government requirements for licenses, permits, or significant amounts of paperwork in order to allow imports into its country.Cultural Environment in advance a corporation begins exporting products to other countries, it must first try on the norms, taboos, and values of those countries. This information can be critical to the successful existence of a product into a particular country and will influence how it is sold and/or marketed. Such information can prevent cultural blunders, such as the one General Motors committed when trying to give its Chevy Nova in Spanish-speaking countries. Nova, in Spanish, means doesnt goand few people would purchase a car named doesnt go. This marketing errorresu lting simply from ignorance of the Spanish languagecost General Motors millions in initial salesas well as considerable embarrassment. Business professionals also need to be aware of foreign customs regarding standard business practices.For example, people from some countries like to sit or stand very close when conducting business. In contrast, people from other countries want to check a spatial distance between them and the people with whom they are conducting business. Thus, before business-people travel overseas, they must be given training on how to conduct business in the country to which they are traveling. Business professionals also lean into another practice that occurs in some countriesbribery. The practice of bribery is common in several countries and is considered a normal business practice. If the bribe is not paid to a businessperson from a country where bribery is expected, a transaction is unlikely to occur. Laws in some countries prohibit businesspeople from payi ng or accepting bribes. As a result, navigating this legal and cultural thicket must be done very carefully in order to maintain full compliance with the law.Physical EnvironmentOther factors that influence international trading activities are related to the carnal environment. Natural physical features, such as mountains and rivers, and human-made structures, such as bridges and roads, can have an impact on international trading activities. For example, a large number of potential customers may live in a country where natural physical barriers, such as mountains and rivers, make getting the product to market nearly impossible.EXAMPLEStag & Spencer9As an organisation develops, it creates working practices within the business that reflect its way of doing things. These practices become embedded in decisions and operations. The way of doing things guides and influences employees as they carry out their work. However, when organisations develop a new business strategy this creates a process of change. This leads to different ways of working.Company background10With more than great hundred years of inheritance, Marks & Spencer is one of the best-known British retailers. The company has more than 450 stores within the UK and employs more than 65,000 people. It also operates outside the UK where it has a development business in places as far afield as Hong Kong. In recent years, the UKs retailing industry has been characterised by intense competition. Customers are more aware of where and how they want to shop. They also know what sort of shopping beat they require. This has made it much more difficult for retailers to survive.Facing the challengesThe result was that Marks & Spencer had to develop a new business strategy. This created a period of change for the whole organisation. The period of change involved refocusing the business upon the basics. This include the three business values of Quality, Value, and Service. Marks & Spencer developed a promotional c ampaign that emphasised Your M&S. This helped the company to connect customers with the heritage in the business. It also linked the business in the minds of customers with its two other values of Innovation and Trust.The process involved three key features developing products that customers wantedinvesting in the environment within storesproviding good customer service to look after customers.These changes have created a business environment with more challenges for employees. Managers had to prepare employees for whatever role they would be asked to undertake in this new environment. The answer was to develop career paths for the employees. This case study looks at the processes of training and development at Marks & Spencer. It shows how this helped employees tocope with the challenges they faced and created a career path for them.Mc Donalds11McDonalds is one of only a handful of brands that command instant recognition in virtually any country in the world. It has more than 30,0 00 restaurants in over 119 countries, serving around 50 million people both day.All businesses face challenges every day. One of the major challenges facing McDonalds is managing stock. Stock worry involves creating a balance between meeting customers needs whilst at the same time minimising eat. Waste is reduced by 1. Accurate prodigy of demand so that products do not have to be thrown away as often. 2. Accurate stock control of the raw materials.Stock management involves creating a balance between meeting customers needs whilst at the same time minimising waste. This is an increasingly tough balancing act. As customer tastes change, McDonalds needs to increase the range of new products it offers, so the challenge of reducing waste becomes even greater. Why change was needed12In the past, stock ordering was the responsibility of individual restaurant managers. They ordered stock using their local knowledge, as well as data on what the store sold the front day, week and month. For example, if last weeks sales figures showed they sold light speed units of coffee and net sales were rising at 10%, they would expect to sell 110 units this week. However, this was a simple method and involved no calculations to take account of factors such as national promotions or coach holidays. It took up a lot of the Restaurant Managers time, passing them less time to concentrate on delivering quality food, service and cleanliness in the restaurants.The new systemIn 2004, McDonalds introduced a specialist primaeval stock management function known as the Restaurant release Planning Department. This team communicates with restaurant managers on a regular initiation to find out local events. Theteam builds these factors into the new planning and forecasting system (called Manugistics) to forecast likely demand of finished menu items (e.g.Big Macs). This case study looks at how McDonalds manages its stock through its management systems and what benefits this brings. conse quenceThe world has a long history of international trade. In fact, trading among nations can be traced back to the earliest civilizations. Trading activities are directly related to an improved quality of life for the citizens of nations involved in international trade. It is safe to say that nearly every person on earth has benefited from international trading activities.International business grew substantially in the back half of the twentieth century, and this growth is likely to continue. The international environment is complex and it is very important for firms to understand this environment and make effective choices in this complex environment. In this assignment we examined the characteristics of an international environment, the differences between international environment and domestic environment and then the constrains, difficulties, benefits and opportunities having in mind social cultural factors, political factors, and legal, environment. Finally we outlined the c ases of famous firms. The topic of international business is itself complex, and this discussion serves only to introduce a few ideas on international business issues.BIBLIOGRAPHYBooksBuckley, P.J., ed. What is International Business? Basingstoke, Hampshire New York, NY Palgrave Macmillan, 2005. Churchill, G., and Peter, P. (1995). Marketing Creating Value for Customers. Austen contract Daniels, J.D., and L.H. Radebaugh International Business. Environments and Operations. Reading, MA Addison-Wesley, 1997. Hofstede, G. Cultures Consequences Individual Differnces in Work Related Values. Beverly Hills, CA Sage Publications, 1980.Internet SitesWikipedia.http//www.thetimes100.co.uk/company_list.phpwww.mcdonalds.comwww.marksandspencer.comhttp//applications-of-strategic-management.24xls.com/en128http//www.tamu-commerce.edu/genbus/walkerwww.referenceforbusiness.com/management/Gr-Int/International-Business