BUMGT 5920: Global Management Challenges and Opportunities

This essay delves into the challenges and opportunities encountered by managers operating within the global business environment. It explores various factors, including cultural differences, political climates, and legal issues, that impact international business expansion and operations. The paper highlights the significance of thorough market research, effective leadership, and strategic decision-making in navigating these complexities. It presents case studies of companies like Qantas and Ford, illustrating the consequences of inadequate planning and the importance of innovation and adaptability. The essay emphasizes the crucial role of managers in formulating strategies to gain a competitive advantage and ensuring the successful expansion and sustainable growth of organizations in the global market. It also emphasizes the importance of good leadership and effective decision making for the success of the business.

Running head: MANAGEMENT IN GLOBAL BUSINESS ENVIRONMENT
MANAGEMENT IN GLOBAL BUSINESS ENVIRONMENT
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Globalization in recent times has paved way for business making attempts to expand
their business and operate in the foreign market in order to make a mark in the global market
(Rasche et al, 2017). In order to expand and operate successfully in the foreign market an
organization or a company needs to understand and assess the international environment of
the desired country where they want to operate to understand the market and make strategic
decisions that will help the organization gain competitive advantage in that market and also
help them in operating successfully (Bowen, Baker & Powell, 2015). The international
environment consists of regulatory, economic, social and cultural, political, technological and
legal environments (Ibrahim, Abdullah & Ismail, 2016). These factors need to be assessed to
make sure that the expansion of the business is successful and profitable. This paper is going
to focus on the challenges of the organizations when operating in the foreign market or
international market and also focus on the possible opportunities for the managers of the
organization who operate in the global environment.
There have been many companies that have failed to expand in foreign markets or
international markets because of lack of proper research about the consumer behaviour, the
political environment, cultural differences and also the inability to change according to the
international environment. This failure has resulted in companies having huge loss in terms
of money and has also made the organizations lose their relevance in the market.
Every country is different from another country in terms of their political climate,
culture, and way of operation, laws, ethics and many more. People of each country have
different desires and needs and wants that needs to be fulfilled thus if a product is doing very
well in the domestic market then it is not necessary that the product will have the same
business and demand in some other country. This is one of the major reasons why a popular
and a big company like Starbucks failed to succeed and thrive in the Australian market.

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Therefore, thorough assessment of the international business environment is very necessary
before making an attempt to expand in the foreign market.
The international business environment is often considered to be multidimensional as
it includes cultural differences, taxation issues, legal issues and political risks (Hamari,
Sjöklint & Ukkonen, 2016). These factors have a huge effect and impact on the organizations
that are trying to expand in the foreign market. These factors often come across as a
challenge or a barrier for the organization and especially for the managers of the organization
who have to ensure the smooth operations of the organizations in the foreign market or
country. Managers have a vital role to play in the expansion of business as they are highly
involved in the decision making process as to which country or environment will be
favourable for the growth prospects by conducting proper research and analysis of the
country (Holling, 2017). However, every organization and the managers face some teething
problems in the initial stages when the first expand their business in the foreign market. With
time and by implementing effective strategic decisions the problems become less harmful for
the business however needs constant monitoring so that the issues do not crop up.
When expanding in the foreign market, managers face several difficulties and
challenges which have the potential and the capability to affect the organization negatively
and also decide the fate of the organization in their country. One of the major issues of the
managers when an organization expands in the foreign market is cultural difference.
Every country follows a different culture and this difference in culture often paves
way for miscommunication, language barriers, difference in opinion, lack of sense of
belonging and many more that impacts organizations negatively. According to scholars, it is
important for an organization to have mutual understanding of the culture of the country
where the business is expanding or establishing (Deresky, 2017). It often becomes difficult

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for the managers to communicate important information that is necessary because of
language barriers. Managers often find it difficult to handle projects as the people may have
different perspectives which sometimes do not align with their thought process and approach
of the managers.
The other important factor that managers often face while operating in some other
country is political environment. Each country has a different political environment that
affects the operations of the organization in that particular country (Rajwani & Liedong,
2015). Managers have to make decisions keeping the political climate of the country in mind
as this may have negative consequences on the organization if the decision upsets the
sentiments of the ruling party who have the capability to throw the organization out of the
country.
Every country has some different set of laws that they implement keeping the interest
of the citizens in mind and for the betterment of the country (Strange & Zucchella, 2017)..
This is an issue which managers sometimes have to deal in order to make some change in
structure of the organization or while making some decision. Often the necessary decision
that has to be made contradicts with the laws of the country which becomes a challenge for
the managers as they need to make alternate decisions that will be suitable for the
organization and uphold the law (Strange & Zucchella, 2017).
When organization establishes themselves in other countries in order to acquire
foreign market, the size of the organization automatically increases or expands. Managers
often find it difficult to manage a huge organization and people overseas. The monitoring
becomes difficult for the managers and many times fail to satisfy the needs of the employees.
Taxation issues are one of the major issues or challenge that the manager of an
organization faces (Vidgen, Shaw & Grant, 2017). Each country as different tax laws and it

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often becomes difficult for the manager to make decision according to that as it might affect
the finance of an organization resulting in making the organization shell out more money than
what they have prepared for.
Managers of organizations that operate internationally face these challenges and
issues while performing their jobs. However, with their knowledge, experience, efficiency
and competency has made them make successful strategic decisions and change that are
necessary for the organization in order to operate in the foreign market. It has been seen in
successful international companies, managers have a huge and vital role to play in order to
maintain the smooth operations of the organizations irrespective of the challenges and the
issues that they face and often crops up which has contributed to the success of the
organizations to make a mark in the global market and acquire sufficient benefits (Maretich,
Emerson & Nicholls, 2016).
Expanding in the foreign market marks the growth of an organization and therefore
this expansion increases the competition of the organizations as well. It is important for the
organizations to find out strategies that make them unique and different from others and also
cater to the customers in a better way in order to gain competitive advantage to make sure
they do well in the market and grow more. It has been seen that lack of innovation and
efficient management often leads to the downfall of the business or make the business face
several challenges for their retention in the market.
Recently it has been seen that the Australian airline company, Qantas had faced issues
with their expansion in the foreign market. Qantas has had been a success and continues to be
successful in the domestic market however the airlines faced issue when they expanded in the
international market operating their business in UK, Indonesia, New Zealand, Thailand and
America (The Economist, 2019). However, after the internationalization of the company,

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Qantas faced immense competition from the airlines from the Middle-East and Asia which
Qantas did not apprehend before that these airlines were slowly entering the Australian
market. The hike in prices and the competition of the routes had also lead to Qantas face huge
loss while expanding in the foreign market (The Economist, 2019).
There are several other companies who have been facing problems in the foreign
market like Ford, who has been recently going through a tough time because of the poor sales
of the company. One of the major issues that have been identified for the issues faced by the
company is strategy of the company. Ford has been only selling the products that have been
in demand in different countries (Ferris, 2019). The company is however being unsuccessful
in manufacturing and creating new products in the market. China is considered to be the
largest automobile market in the world and they offer variety of automobiles at a cheaper rate
which has been a huge issue for Ford for the immense competition as well as the lack of
innovation (Ferris, 2019).
It has been seen that most of the organizations that face problem in the international
market is because of the lack of creativity and innovation that leads to unable to cope up with
competition and the other is inefficient decision making by the managers or the person in
charge of the organization. In both the stories of companies facing issue in the foreign
market it can be seen that the competition has been a huge problem and a barrier for these
companies to make a mark in the foreign countries. In context to the news of Qantas, it can be
seen that the lack of research and competition had become huge problem for the organization.
Qantas before entering the market should have done proper research about the market and
about the other airlines in the business and should have evaluated properly the pros and the
cons which are important while expanding in the foreign market. Before entering a new
market proper research is the key to understand the potential of the market and the potential
gains it can bring to the organization. In context to Ford, it can be seen that the lack of

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innovation and poor decision making has led the company in this vulnerable position. The
company should have used a good leader to make proper decisions for the organization and
should have introduced new car models that would satisfy the people they were catering to
the market.
In order to successfully expand in the foreign market and to overcome the problems, a
good leader should be hired in the organization as a manner so that they can make effective
decisions and carry out their work efficiently to achieve the desired goals set by the
organization and also to make profits in the desired market the company or the organization
has been aiming for. According to scholars, a good manager is efficient in making fruitful
decisions and strategies for the benefit and profit of the organization (Fransen et al, 2017).
The decisions of the managers have a role and often contribute to organization’s gaining
competitive advantage over the market. Meng & Boyd, (2017) opines that a good manager
should have competency and should have a quality to understand the future that is fruitful for
the organization especially when the organization aims on expanding their business.
Vovchenko et al, (2017) states that managers operating globally should ensure the business
operates aligning with the needs of the organization as well as the country they are operating
in. Most of the organizations face issues and often fails to expand successfully in the foreign
market is mainly because of the lack of a proper leader in the company who has the ability
and the capability to make concrete discussions based on the research and available data and
also have the courage to make strategic changes during situations of crisis.
Most organizations these days aim on expanding their business in the foreign market
to generate more profits and have a positive reputation in the global market. However, it has
been seen that most of the organizations and the managers of these companies face serious
issues that often results in the loss of the company. To expand the organization in the foreign
market the organizations should to proper research and be prepared to overcome challenges

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by effective and strategic decisions making, maintaining smooth operations of the company,
create innovative ideas in the marker, build a positive reputation in the market and most
importantly have a good manager or a leader who will ensure all these and maintain peace
and harmony which will help in achieving the goals of the organization and also help the
organization acquire good position in the foreign market.

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