Risks in International Business Operations

This document discusses the risks involved in international business operations, including infrastructure, sourcing, taxes and tariffs, and security. It explores how these risks can be mitigated and how operations can be optimized based on local factors. The document also provides insights into the challenges faced by multinational companies and offers strategies for successful international expansion.

Contents
Question 1..................................................................................................................................2
Question 2..................................................................................................................................2
Question 3..................................................................................................................................2
Question 4..................................................................................................................................3
Group Project paper:..................................................................................................................3
Infrastructure..........................................................................................................................3
Sourcing.................................................................................................................................4
Taxes and tariffs.....................................................................................................................4
Security..................................................................................................................................4
References..................................................................................................................................6
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Question 1
In the international expansion of Coca-Cola, the company were surprised to understand that
the logistics operations on the national level were vastly different and the times and costs
varied greatly along with the countries based on the transport infrastructure and availability
of logistics partners. Thus, while in America the company has an established supply network
they had to adapt to the new system through periodic contracts in the international market.
This led to their operation being divided based on countries and region where the president at
their regional level was given certain capabilities to manage the operations based on local
factors. Thus, the company could not use a centralised system in their international expansion
but had to use a region based hierarchy that enables them to adjust local operations based on
the local factors (Kraus, 2018). The company has since gained experience in a different
market but still retains their same strategy for the various national markets which have their
own operational policies that meet with the local business environment.
Question 2
For a project distributed over a vast area and multiple locations, there might be some
advantage in decentralised WBS entry but this only complicates the process of consolidating
the individual entries into a single WBS. However, in many cases, the system can be
implemented successfully if the entries use a computerised system and develop real-time
reporting indicators that update the WBS instantaneously to all locations after the latest entry.
This system is currently used by many companies which minimises the possibility of
confusion from the different location-based entries in the implication of the entries for the
entire project (Harrison & Lock, 2017). This is based on the availability of the latest
information for all the teams scattered through different locations which enable faster
decision making and implementation of mitigating measures based on the impact of the
possible action by a single team at one location. Therefore, the system can be seen as
applicable under certain condition only.
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Question 3
In case of dispute in the virtual team as the project manager, I would need to implement
actions that would ensure the successful completion of the objective. The first thing is to
arrange for an open discussion as soon as possible as this is possible due to the virtual nature
and the team members can attend an online discussion without needing to be in the same
location this open discussion is the best way to manage the issue as this does not allow the
time for the conflict to escalate and the issue can be eradicated before it grows to
unmanageable proportions (Nemiro, 2016). As the possibility of changing team members is
non-existent, the interaction needs to be transparent through an online discussion or video
conferencing that would allow them to contribute and give opinions outside their area of
expertise that would reduce the friction between two specific members as the idea would be
vetted individually ion an open discussion.
Question 4
The formation of groups in project teams is not uncommon and this issue can be handled
carefully as the cliques can include members from the same or different field of expertise
which makes their opinion varied. The establishment of a robust vetting process for the ideas
before any discussion on the new ideas or changes are approved by project manager is one
way which can be sued for diffusing the cliques and ensure inclusion as each member would
give their opinion anew idea and vet the ideas of others without having to contend with others
opposition (Dulebohn & Hoch, 2017). The process can, therefore, help each member to make
individuals contribution and offer constructive criticism without opposition that ensures the
inclusion of all team members. This would make the group decision-making the process a
little delayed but as this is a virtual team, the team members can take their time for evaluating
the ideas and give their opinion at any time.
Group Project paper:
The following risks are applicable in the presented scenario
Infrastructure
The infrastructure level of the different countries is different and the reliability and cost of the
railways, roadways and airways transportation differ greatly based on the location. Thus, the
risk needs to be given a high level of importance in international business and both sourcing
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and supply need to be optimised based on the characteristics of the location. However, all
aspects of this risk are not negative as the local customer expectation is also different in the
different location and often they are in line with the in local infrastructure standards which
makes it possible for the cony to meet customer expectation as long as they optimise the
system on local characteristics (Fitzgerald, 2016). In case international organizations the
origin country transport management system level might be higher than the location which
would enable them to gain an advantage over the local competitors because of the higher
level of supporting infrastructure.
Sourcing
The sourcing is also a risk as the quality of the raw material and availability differ based on
location and often this can be managed better if the organizational operations are based on
one country. However, this improbable because of the high cost of transport that makes them
unable to meet the cost limits (Shamim et al., 2016). This can be considered a high priority
risk as maintaining quality is essential for the reputation of the company and the pricing acts
as an inhibitor. While the customer expectations might differ they are often similar only
varying the degree which can use a centralised strategic objective to manage the operations
which is a plus side for the risk. The competitors would also face the same problems in the
market and this is also a positive factor that can be associated with the risks.
Taxes and tariffs
The tax and tariffs are different for each country which causes price variations that affects the
business supply chain differently and this is reflected in the pricing of the products. To
remain in the competition a company needs to leverage the operating expenses and efficiency
to offset this risk (Fitzgerald, 2016). This also affects the profitability of the supply chain
which affects the overall expenditure of the company in both raw materials and finished
product delivery to different locations. The only upside top this risk is that this risk affects the
whole market uniformly and thus there is little change in the competitive advantage for this
risk.
Security
The security is another concern in regards to the shipping and delivery as the risk of
misplacing a product of delays in the supply chain can cause a loss for the company. This risk
also increased exponentially with an increase in the number of elements in the supply chain
(Mudambi et al, 2018). This security can only be maintained by dedicated and capable
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personnel aware and familiar with local issues affecting the securities and address them in a
decentralised manner.
Therefore from the above risks in shipping and transportation aspects of the business, it can
easily be seen that there are two factors that need to be concentrated upon while addressing
these risk which is the customer expectation and the completion. Thus, the as long focus is
given to local factors in each aspect of the problem they can be overcome.
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References
Harrison, F., & Lock, D. (2017). Advanced project management: a structured approach.
Routledge.
Dulebohn, J. H., & Hoch, J. E. (2017). Virtual teams in organizations.
Nemiro, J. E. (2016). Connection in creative virtual teams. Journal of Behavioral and
Applied Management, 2(2), 814.
Kraus, C. (2018). More than Just a Soft Drink: Coca-Cola and China’s Early Reform and
Opening. Diplomatic History, 43(1), 107-129.
Mudambi, R., Li, L., Ma, X., Makino, S., Qian, G., & Boschma, R. (2018). Zoom in, zoom
out: Geographic scale and multinational activity.
Fitzgerald, R. (2016). The rise of the global company: Multinationals and the making of the
modern world. Cambridge University Press.
Shamim, S., Cang, S., Yu, H., & Li, Y. (2016, July). Management approaches for Industry
4.0: A human resource management perspective. In Evolutionary Computation
(CEC), 2016 IEEE Congress on (pp. 5309-5316). IEEE.
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