Challenges and Strategies in Global Expansion of Multinationals

The analysis highlights how multinational corporations (MNCs) navigate international expansion through strategic entry modes and market assessments. Companies like Corning Glass Enterprise leverage their strengths in specific sectors to mitigate weaknesses during global ventures. However, challenges such as cross-cultural communication, lack of local knowledge, and cultural adaptation persist. Emerging multinationals often confront distinct obstacles compared to established MNCs, particularly in developing effective international strategies and managing ethical implications. The assignment explores how organizations can overcome these barriers by understanding cultural nuances, fostering open communication channels, and employing strategic frameworks tailored to their unique strengths and market conditions. It underscores the importance of a cohesive global strategy that integrates local insights with overarching corporate objectives to achieve successful expansion.

Running head: INTERCULTURAL GLOBAL MANAGEMENT ISSUES
Intercultural global management issues
Name of the student:
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Table of Contents
Introduction:....................................................................................................................................2
Global managers and their challenges:............................................................................................2
Global management competencies:.................................................................................................5
Global management strategies:........................................................................................................6
Ethical implications:........................................................................................................................7
References:......................................................................................................................................9

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Introduction:
In the face of globalization and consumerism, the impact of internationalization is great
on the business process management of the bigger fishes in the market. In most cases expansion
is the most important strategy in order to expand the target market continues to sustain in the
market for the future. However in the present scenario, the concept of globalization has turned
ironical with the massive lack of any intercultural business strategies in place for the most of the
business companies. It has to be understood when a particular company needs to overcome the
challenges of cross border expansion, a business organization desperately needs a intercultural or
global management strategy (Terpstra, Foley & Sarathy, 2012). Although, the conception of
global or intercultural management has been observed to be quite flawed in the multinational
companies. This assignment will reflect upon the article “What is a global manager” published
in the Harvard Business Review, and attempt to explore global management problems faced by
two companies and how the challenges can be overcome with strategic actions.
Global managers and their challenges:
Drawing inference from the article chosen for the assignment, the concept of global
management, as discussed by the author in the article, is not limited to just universal business
management ideas; rather, global management required in the present age utilizes principles of
three different sectors of business management, business process management, host country
management and functional management (Nahavandi, 2016). According to Bartlett and Ghoshal,
multinational companies that attempt to overcome cross-cultural challenges while trying
international expansion need to employ the specialist knowledge of all the above mentioned sub-
disciplines of business process management. Elaborating more, it has to be mentioned, that many

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of the authors have agreed to the argument raised by Barlett and Ghoshal, the perception of
global management is in dire need of complete transformation. There is need for recognizing
global management as an extension of transnational management that takes into consideration
the regional and intercultural differences between the host country and location of expansion.
According to the Mendenhall, (2012), cultural ethics play a pivotal role in the business process
management in cross-cultural settings, and transnational business management has been
discovered to be one of the most advantageous techniques to maintain the key challenges that
arise when establishing brand image or brand reputation in a target market that have not been
explored by the business company yet.
A similar business management problem or concern has arisen in the case study
represented in the media article chosen for the assignment; the article features Corning Glass, the
company that hired the ex-ambassador as the global management leader for its international
division. However, there had been many challenges that have been discovered in the business
management procedure as time progressed. The benefits of the recruitment had been in the fact
that the ex-ambassador had many connections and allies in the government which can favor the
best interests of the company and its expansion plan. However the company soon realized that
the decision had not been in par with most of the expansion management needs and requirements
of the company and many of the key areas of concern had not been addressed which eventually
affected the outcome of the expansion. A very similar example of failed global management
decision had been taken by the ITT as discussed in the article, where the management hierarchy
opted for a massive educational program to globalize their entire overseas operation management
team so that the multinational telecom company can replace its national specialists with the
global generalists. The primary strategy behind taking this step had been to include all the

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external and internal factors associated with the expansion needs and establishment of a brand
image in all the sectors, however, the initiative taken to improve the business management had
been a complete failure due to the lack of any specialized division devoted for the expansion
organization and international management (Ramamurti, 2012). The lack of job role clarity and
organization resulted on a massive management problem for the company and its expansion
plans.
Now the major concern in both the business problems discussed above is the lack of
significant global management activities. Elaborating on the role of the global managers it has to
be mentioned that, by core definition, there are a few core responsibilities that a global manager
must carry out. First and foremost, international strategic management and asset co-ordination is
the primary job responsibility of a global manager. In the context of host country management,
co-ordination and interlinking between the local market operation and global business goals of
the company is also overlooked by the global manger. Lastly, the global managers are also
entasked with overseeing the overall functional management of the organization all throughout
the different operational centers.
However the business problems that had been discussed in the article illustrate the
various challenges that arise for the global managers. For instance, it has to be mentioned that in
case of cross-cultural expansion, analyzing the corporate cultures of the host country is
extremely important, as it discovers the key requirements of the target market in that country. A
key challenge that has been considered as one of the most influential factor for the job
responsibilities of the global managers is the faulty corporate culture analysis and market need
assessment. It has to be mentioned in this context, that with a multitude of operational centers,
and a multicultural staff, interpersonal conflict is one of the most inevitable phenomenon.

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According to Cavusgil et al., (2014), another key challenge in the job responsibilities of a global
manager is the disjointed conflict resolution. For a single person as a global manager it is
impossible to be present at the nick of time when needed, and hence the conflict issues escalate
in the absence of proper global business process management. Decision making is a great
responsibility for a global manager, however the distance and time difference between different
operational centers, it is extremely difficult for one personnel to keep track of the cultural and
linguistic diversities and hence lack of clarity and resulting slow decision making is the last key
challenge for a global manager (Deresky, 2017).
Global management competencies:
As discussed in the article used in the assignment, in order to overcome the business
problems that arise in international management, emphasis on three core competencies of global
managers is needed. The core competencies of a global manager can be traced back to the
responsibilities within three different sectors of business management, functional management,
host country management, and production or business process management. A global manager
must be capable of overlooking all the elaborate steps of the production and business process
carried out by the company (Peng, 2012). For instance, for Corning Glass, international
management executive had been an ex-ambassador and had intercultural communicational
prowess and government allies in his favor; however he lacked any understanding of the business
process carried out in the company. One the other hand, host country management is another of
the core competencies of a global management professional, without a clear idea of the corporate
cultural patterns of the host country, it is impossible to develop a stable brand reputation.
Considering the functional management competencies, resolving internal conflicts is an
extremely important sector of cross-cultural business. There are a multitude of different

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conflicting issues that can arise, both in between the staff and with the customers or vendors. In
such cases, conflict resolution skills are another prerequisite for a global manager to have in is
arsenal to ensure that business processes of the organization is being operated smoothly (Okoro,
2012).
Global management strategies:
Depending on the information that has been represented in the case study, the global
management initiatives for both the companies failed and morphed into significant business
problems due to the lack of strategic inclusion of all the core competencies of international
management. Therefore there is need for robust global management strategies that will
incorporate all the core competencies required for international expansion success of a company.
 First and foremost, production and distribution process management is needed to
have clarity and transparency among all the different operational centers.
However it also needs to acknowledged that it is absolutely impossible for a
single personnel to oversee the business process management in all expansion
centers, hence in place for a global manager, there is need for a global
management team, complete with a separate business process manager, host
country manager and functional manger, led by a international management
director or leader guiding the middle management in the entire process (Lasserre,
2012).
 The next strategy that can be incorporated to overcome global management
challenges is a reliable and authentic host country corporate culture evaluation
and characterization program by the global management team, and based on the

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information elicited by this program needs to be taken into account before
expansion into a new location.
 Lastly a monitoring framework for overseeing and controlling the international
expansion management initiatives and programs can help in not only making the
most of the global management strategies but will also provide data based on
which further improvisation of the strategies can be achieved, curated according
to the specific needs of the company (Lasserre, 2012).
Ethical implications:
Considering the ethical implication in the case study, it can be stated that for Corning
Glass, the ex-ambassador who had been employed as the international development manager had
no clarity about the business management procedure in place in the company, but had
appreciable internal government contacts. It cannot be overlooked in this context that global
expansion depends on government approval largely, and having connections will undoubtedly
help in smoothing out the kinks of the procedure of expansion. However, the ethical implications
can be the fact that a global manger with no idea of the strengths and weaknesses of the company
and it might bring in opportunities which will not be able to be completed by the organization.
Hence, it can be a detrimental effect on the brand reputation and damage the market stability of
the organization (Lasserre, 2012). On the other hand, the ITT had a massive decision making
error of training their entire staff for global management instead of focusing on a global
management team of competent experts. This unethical attempt of the company to force the
existing staff to take on the responsibility of global management rather than branching out of the
staff into a division designated to just global management actions, eventually resulted into major
expansion failures and a considerable impact on staff loyalty and market reputation. It is clear

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that global management needs to be as close to flawless as possible for the company to gain
smooth sailing success in international expansion. However, with proper emphasis on the three
core competencies of global management discussed, achieving this goal can be possible.

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References:
Banalieva, E. R., & Dhanaraj, C. (2013). Home-region orientation in international expansion
strategies. Journal of International Business Studies, 44(2), 89-116.
Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L.
(2014). International business. Pearson Australia.
Deresky, H. (2017). International management: Managing across borders and cultures. Pearson
Education India.
Kumar, V., Gaur, A. S., & Pattnaik, C. (2012). Product diversification and international
expansion of business groups. Management International Review, 52(2), 175-192.
Lasserre, P. (2012). Global strategic management. Palgrave Macmillan.
Mendenhall, M. E. (Ed.). (2012). Global leadership: Research, practice, and development.
Routledge.
Nahavandi, A. (2016). The Art and Science of Leadership -Global Edition. Pearson.
Okoro, E. (2012). Cross-cultural etiquette and communication in global business: Toward a
strategic framework for managing corporate expansion. International journal of business
and management, 7(16), 130.
Peng, M. W. (2012). The global strategy of emerging multinationals from China. Global Strategy
Journal, 2(2), 97-107.

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Ramamurti, R. (2012). What is really different about emerging market multinationals?. Global
Strategy Journal, 2(1), 41-47.
Terpstra, V., Foley, J., & Sarathy, R. (2012). International marketing. Naper Press.
What Is a Global Manager?. (2017). Harvard Business Review. Retrieved 1 November 2017,
from https://hbr.org/2003/08/what-is-a-global-manager