Managing International Business: Case Study and Analysis Report

This report analyzes the management of international business, focusing on Unipro Incorporated's diversification strategy and organizational structure. It examines the functional organizational structure, detailing its advantages such as specialization, operational speed, and clarity, while also addressing disadvantages like segregation, unhealthy competition, and lack of communication. The report explores centralized and decentralized decision-making approaches, particularly within the context of airline operations. Furthermore, it delves into the reasons behind Berjaya Land's acquisition of Icelandair hotels and potential causes for business failures. The analysis provides insights into organizational structure, decision-making processes, and strategic considerations in international business management.

Running Head: MANAGING INTERNAIONAL BUSINESS
0
MANAGIN INTERNATIONAL BUSINESS

MANAGING INTERNATIONAL BUSINESS
1
Table of Contents
Introduction.................................................................................................................................................2
Organizational structure..............................................................................................................................2
Advantages..................................................................................................................................................4
Disadvantages..............................................................................................................................................6
Centralised decision making and decentralized decision making................................................................7
Centralised decision making....................................................................................................................7
Decentralised decision making................................................................................................................8
Answer 2.....................................................................................................................................................9
a) Reasons of purchasing the Icelander hotels by the Berjaya land......................................................9
b) Possible reasons for failure..............................................................................................................9
Conclusion.................................................................................................................................................11
Bibliography..............................................................................................................................................12

MANAGING INTERNATIONAL BUSINESS
2
Introduction
Unipro incorporated is known as the manufacturer of the small jet aircraft within the USA and
deals at global level. This organization has single product strategy and set up the functional
organization structure. The board of directors is concerned regarding the dependency on the
single product as it decided to diversify the organization. The organization has implement the
diversification strategy and required to implement the appropriate organizational structure. This
discussion will include the new functional organizational structure with the benefits and
drawbacks of the functional organizational structure. It will cover the argument regarding the
centralised and decentralised decision making approach. Further discussion will cover the
reasons behind the acquisition of the Icelandair hotels by the Berjaya land. It will discuss the
possible reasons of failures.
Organizational structure
Large and small organizations both required the structure to operate and meet the organization
objectives (Winnbust 2017). The organizational structure is known as the activities like
allocation of task, coordination, and supervision which are directed to achieve the organizational
objectives. The functional structure of the organization has been theorized by the Fayol and most
common structure which is yet not be adopted by the Unipro Incorporated. In this organizational
structure activities are collected together by the use of functional criteria as distribution of the
responsibilities in the first level follows the key functions of the organization (Ashkenas, et al.,
2015).

MANAGING INTERNATIONAL BUSINESS
3
This model will be supportive for the Unipro Incorporated to gain the benefits from high
specialization of functions to the better exploitation of the economies of scale and build the
unique plant in place of the every process of production. It will be efficient for the organization
within the particular constraints. This will be effective for the environment, technology, and
strategies of the organization to gain the stable results and strategies will be supportive to focus
and develop the existing strategies and penetrate. This model is effective for the Unipro
Incorporated as dimension of the organization are small. It will be good enough to manage and
alleviate the negative aspect. This will give higher level of specialization and make the
organization stronger under the uncertainty. The unexpected events which occur within the
bottom line will be better to managed within the functional structure. Every issue within the
organization will be solved as delivered upward to preceding levels and system will become
faster compare to the competitors. The high specialization will lead to the sufficient coordination
within the employees and lead to organize the workers (Fan, Wong, and Zhang, 2013).
CEO
Production Finance &
Accounting Marketing R&D
Advertising
Sales

MANAGING INTERNATIONAL BUSINESS
4
These will be effective for the organization to formulate the teams within the business on the
basis of particular knowledge and skills. It will be supportive for the organization to vertically
structure the every department within the role form the president to the sales and finance
division, to serve customers, to allocate employees one service and product. Unipro Incorporated
should include and prioritize specialized units that will report to the single authority recognized
as the upper management. Every functional unit will be organized as the aspect of the product
and services like research, development, and information technology. It will help the
organization to refer to the silos to work functionally independently and have the own vertical
structure of management. Employees within the organization will become more capable to
communicate each other exclusively by putting together all informational and human resources
for every activity within the single place. It will also help to run the business appropriately and
earn the more profit (Englmaier, Florian, and Leider, 2012).
Advantages
 Specialization
The organization will be divided within the many departments regarding the key activities to
perform. Every department Unipro Incorporated will be headed through the expert manager. The
most important advantage of the functional organization structure is the grouping workers
through the specialization that ensures the dependable level of the departmental competence. It
will be effective for the Unipro Incorporated that holds the many functional levels in the
department. For example, the specific tech group in organization follows up the tech issues
which not solved through the key telephone tech support team. The membership in this kind of
group required the bachelor degree within the computer science, the recommendation of the
manager and minimum number of the years of knowledge in field. The functional structure will
ensure the support issues to move up to follow up team which handled through the fully qualified
personnel that improve the retention and satisfaction of customers. It will help to get the more
and better work which will be accomplished in lesser time as the benefits of the specialization
become more available. The team within the organization will be managed by the experienced
person with the high capability and abilities that can effectively understand and view the whole
work. The employees within the team will work with the other employees in the areas and allow

MANAGING INTERNATIONAL BUSINESS
5
sharing the knowledge, thoughts, and making the capable to employees to learn the new skills.
Employees within the Unipro Incorporated with the expertise and specialized skills will become
more capable to perform work speedily and efficiently by reducing the work related mistakes.
Appropriate nature of career path in the functional unit will increase the possibilities for the
employees to become more motivated and advanced careers by move up in the hierarchy. It will
keep the employees of Unipro Incorporated aiming for the development and advancement
(Ravanfar, 2015).
 Operational speed
The related benefit of the functional structure is the specialization of the operational speed. The
senior tech will have the right to handle the support issue very faster compare to other which
have the less experience. Employees with the particular knowledge in the specific field will train
the new employees faster too within the functional structure. The employees within the Unipro
Incorporated will get the more chances to get promoted. It will also help the organization to keep
employees for long term. Organization will become more capable to gain the more advantages of
expertise and knowledge. The functional structure for the Unipro Incorporated will maximize the
performance through encouraging the peer cooperation among the different units within the
many levels of management by coordination and supervision. The specialization will lead to the
operational efficiency and improve the level of productivity (Ho, Gene, and Jin‐Ping, 2013).
 Operational clarity
It will create the opportunity for the employees to clarify the functions with the organizational
responsibilities and allocate the task. The functional structure in Unipro Incorporated will incline
to minimize the duplication of assignments and waste time. The efforts of management will
become easier for the management to direct the work to the appropriate employees. It will make
the coordination easy at the level of department. The functional structure of the Unipro
Incorporated will help to control more effectively corporate executives on the operations. The
control will be achieved through the functional groups which correspond to the many areas of
airline business. This redundancy minimizes the operation by the aggregation of activities and
sources on the basis of similarities in the strategic objectives and business function. The

MANAGING INTERNATIONAL BUSINESS
6
minimized redundancy will allow the organization to avoid the unnecessary costs within the
operations of airline (Shafritz, Ott, and Jang, 2015).
Disadvantages
 Segregation
The team with the functional structure will become soiled as departments populated by the
employees specializing in the particular areas of work in Unipro Incorporated. Employees within
the different teams will not get the enough opportunities to encounter and segment the
perspectives that can be dangerous for the business in the long run (Worley, June and Toni,
2015).
 Unhealthy competition
The functional structure in the Unipro Incorporated sometime will lead to the unhealthy
competition while working within the many other areas. There can be lack of indulgent as
request from segment of marketing may not be arranged to attend the issues of department of
sales through adding more people. Employees in the Unipro Incorporated in the functional
structure will be grouped as per the roles, skills, task, and operated well. The strategies of
business and bureaucracy level will make the difficulty to respond to the changes immediately
(Král, Pavel, and Věra, 2016).
 Lack of communication
The disadvantage of the functional organizational configuration is that functional teams will not
remain capable to communicate more frequently that decrease the innovation and flexibility in
the Unipro Incorporated. The Unipro Incorporated in functional structure may face the issue
regarding the poor horizontal coordination in the department. Motivation of the employees will
be affected at large level due to the restricted views of the organizational goals and lack of
innovation. This kind of structure can be inelastic and high formalization and standardized way
can hamper the process of decision making.
 Lack of coordination

MANAGING INTERNATIONAL BUSINESS
7
The disadvantage of the functional structure of the Unipro Incorporated could be the lack of
entity coordination. The functional divisions can perform through the high level of competence
and bring the difficulty to work well with the each other. These kind of unhealthy coordination
can lead to the delays, minimized the commitments, competing the interests, waste of timing and
getting late to complete the project (Sommerfeldt, 2013).
 Complexity
Functional organizational structure of the Unipro Incorporated operation will be complicated and
not understood easily because of the many technicalities. Employees could by surprised by the
many number of directions from the different functional heads. This violates the codes of unity
of facility as an employee is responsible for more than the one boss (Lin, 2014).
Centralised decision making and decentralized decision making
Centralised decision making
 Commercial planning
The centralized decision making of the organizations are optimizing the revenues that need the
different approach. This is investing within the solutions which enable the total revenue
optimization by leveraging the insight about the buying behaviour of customers and trip
segmentation. Unipro Incorporated provides the capability to create the schedules of network
which enable and empower the organizational excellence as the key focus area. Investment in
revenue management, network planning, and planning include the capability to optimize and
forecast the profitability by keeping the operational constraints in the centralized decision
making (Claver-Cortés, et al., 2012).
 Connected airline
Operations of the airline businesses are becoming critical with the many facets to cope, ranging
from the crew around the globe to deliver on commitment to the experience of customers. This is
becoming apparent while commercial and functioning demands need a shift from the traditional
decision making. The strategic approach connects the aspects of operations that are important to
manage the complications of the operations. The integrated procedures, real time, system,

MANAGING INTERNATIONAL BUSINESS
8
streamlined communications, and actionably insights are backbone for the holistic solution
which will allow the connected airline. The centralized decision making of the Unipro
Incorporated is focused on the next group of crew management through investing in the
constructing ideal crew atmosphere with the open source approach which centre on the
optimization, compliance, experience of crew and tracking (Fan, Wong, and Tianyu, 2013).
 Airline retaining
Travelers likes to shop for the products at anywhere on any device, at any time. The data driven
retailing has moved beyond the pricing seats to deliver the simplified and personalized the
experiences in the all channels. The centralized decision making approach enables the customer
centric retailing within the entire journey of customer. The Unipro Incorporated is regularly
investing within the responsive design for the self-service experience and e-commerce by
supporting the dynamic retailing abilities across the evolving models of distribution (Mazur, et
al., 2016).
Decentralised decision making
 Turnaround timing
Organizations in the airline business minimizes the turnaround time regarding the aircraft on the
ground. Organization set the target of fifteen minutes. The organization got it down to the ten
minute. The supervisors of maintenance and frontline workers came up with the innovation and
after innovation meet the impossible standard. One of the airline organizations southwest has
established the decentralized process of decision making and culture of performance.
 Improves level of satisfaction
Decentralized decision making process of the organizations is the process to push decision
making power down to the organizational hierarchy and give the lower level employees more
obligation and power to implement and make the decisions. The organizations have the benefits
of the decentralization which includes the quicker decision making processes, improve the level
of creativity and innovation, great flexibility, and improve the level of satisfaction of job and
commitment of employee. According to (Wagner, et al., 2014) sometime it can be risky, if low

MANAGING INTERNATIONAL BUSINESS
9
level employees not have the important skills and training as not perform effectively. It can also
increase the inefficient communication lines, efforts duplication and competing objectives.
Answer 2
a) Reasons of purchasing the Icelander hotels by the Berjaya land
The (Berjaya Land) Bland has purchased the 75 percent share in the Icelandair hotels which will
allow the organization to enter in the luxury segment of hotel in Iceland. The organization has
stated that proposed acquisition is within the line of organization revenue expansion and
geographical diversification. It is expected that proposed acquisition in the luxury hotel segment
within the Iceland will enable the organization to enter in the segment by the strategically located
hotels within the heart of Iceland. The hotels of Icelandair are currently operating the 20 hotels
with the total room of 1811 that located around the Iceland. The new five star hotels in the
district of the Reykjavik parliament which are developed within the collaboration of Hilton
Hotels that is planned to be launched in the 2020. This kind of planned acquisition will improve
the inventory of group’s room to 6011 room from the 4200. The hotels of Icelanders are known
as the largest chains of hotel in the Iceland and operated at the high standard through the
dedicated and passionate group. It is delighted to add the hotel group to increasing network of
hotels. This investment will represent the good long term values.
b) Possible reasons for failure
The hotel industry outlook is expected to be challenging with the slower recovery within the
demand from the main long haul travel market. The total gross revenue affected by the lower
contribution of the tourist arrivals. The already located resorts and hotels have the more
understanding and capability to attract the tourist. The acquiring of the Icelandair hotels will be
the risky venture and following are the reasons for the failure.
 Integration obstacles
Merging the business on the paper is easier compare to the merging in the operation and culture.
It can bring the difficulties due to the lack of concrete plan regarding integration or inadequate
communication. There are sufficient resources like financial capital available to form the entity

MANAGING INTERNATIONAL BUSINESS
10
and overcome from the challenges. The lack of updated procedures and policies can lead to the
limitations of the resources (Almandoz, Juan, and András Tilcsik, 2016).
 Unexpected economic factors
There can be any change within the economic variables and relationship that have the substantial
effect on the business performance and consumption. Shocks in the economies of nations are
unpredictable and have the widespread effect on the business of the Bland. These are random,
unpredictable procedures which have the widespread effect on the economy which are caused
through the things outside the economic models scope. It can be classified through the economic
sector which originate though the primarily influence like demand. Economic shocks can be
harmful for the business as most of the parts are connected to the negative shocks. It can be
failure organization as modern economy is dependent on the liquidity flow and credit to the fund
normal operations. Policy shocks can be the reason for the organization failures as create the
negative shock to the domestic customers. The introduction of the new technology can
minimized the productivity of organization as it will take time to manage the business.
 Lack of planning
The biggest reason for the Bland failure will be the lack of planning. The issue will be the actual
execution of plan. Ideas put down on the paper but the deliverables not achieved. The
organization will face the challenge to execute, delegate, follow up, and documented.
Organization can face the issues to move forward with the plan elements. It can be occurred due
to the many number of reasons as employees at all levels are not effectively engaged within the
development of plans, clear accountability not established due to the lack of follow up on the
progress of plan (Habersang, et al., 2019).
 Disconnect with the management and inefficient communication
Successful management requires overseeing the system or processes. Bland can face the issue
regarding the management that pushes the employees to quit. It can be serious consequences on
the satisfaction of employees and cause the turnover in hospitality. Lack of communication can
lead to the organization failure as requires the appropriate communication between the workers
and high management. If team leaders and executives do not feel in the worker on new process

MANAGING INTERNATIONAL BUSINESS
11
can feel the unmotivated. If customers face the issues that employees are not delivering their best
than it can be badly reflect the Bland business to handle the hotels in Icelandair hotels.
 Lack of recognition
The industry of hospitality demands the hard work, often the long time, irregular hours,
irrespective of position. Employees within the organization can face the issue that their work
within the business is not noticed by the upper management. Organization can face the issue of
failure due to the concerns of employees. Change within advertising and marketing trends can
create the issue for the Bland and lead to the failure (Mantere, et al., 2013).
Conclusion
In the limelight of the discussion it can be concluded that Unipro Incorporate new functional
structure will be effective to gain the high benefits. Functional structure will bring the
meaningful advantage through the specialization, operational speed, and operational clarity. It
will also have the disadvantages like segregation, unhealthy competition, and lack of
coordination, communication, and complexity. Centralized decision making process of the
organization will include the commercial planning, connection, and retaining. Decentralized
decision making approach will include the turnaround timing and improved level of satisfaction.
Further discussion covers the Bland buys stake in the Iceland Company. It covers the reasons of
purchasing Icelandair by the Berjaya land. At the end discussion describes the possible reason of
failure.