International Business: Challenges, Opportunities, and Qantas Case

This report provides an overview of international business, defining it as cross-border transactions involving goods, services, knowledge, and capital. It highlights the challenges faced by international managers, such as language barriers, cultural differences, currency issues, and varying laws and regulations. Conversely, it identifies opportunities like economies of scale, increased market size, and enhanced return on investment. The report includes a practical example of Qantas, an Australian airline, and its struggles with international competition and expansion. Furthermore, it offers a personal perspective on conflict resolution strategies, emphasizing the importance of cross-cultural communication, training, and understanding local customs to foster a collaborative work environment and improve business productivity. Desklib provides access to this and many other solved assignments.

RUNNING HEAD: International Business
International Business

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Contents
Introduction......................................................................................................................................2
International Challenges and Possible Opportunities for Managers Operating in a Global
Environment....................................................................................................................................2
Practical Example of Organization that has faced Challenges of International Competition and
Expansion........................................................................................................................................4
Handling of Conflict Generation and Solutions..............................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................8

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Introduction
International business can be defined as conducting transactions and trades at the international
level. It includes the trade of technology, products, services, knowledge and/ or capital. Cross
border transactions are involved in the international business relating to goods and services
between countries. For the purpose of conducting the business overseas, it is essential that the
companies should be aware of the factors due to which the business activities are affected such
as political systems, legal systems, accounting standards, living standards, local cultures, labor
standards, environmental standards, etc. a number of functions are performed by the international
managers for adjusting the business within the environment of a new country (Cavusgil, Knight,
Riesenberger, Rammal & Rose, 2014).
This report focuses on the international challenges and opportunities for the managers while
operating in the global environment. Moreover, it provides the practical example of Qantas that
faced challenges as a result of international competition and expansion. Furthermore, the report
offers personal view regarding the manner in which the conflicts and solutions can be handled
effectively.
International Challenges and Possible Opportunities for Managers Operating in a Global
Environment
The international managers should consider the social, economic and political climate of the
region where the organization is planning to function. There are a number of challenges faced by
the international managers while operating in a global environment.
Language Barriers- Every successful business considers communication as the key factor.
Therefore, a certain level of fluency in the local language should be given preference. In case,
the managers do not have basic knowledge regarding the local language of the country, it can
prove to be costly and dangerous. Moreover, the instructions given to the employees will not be
communicated properly regarding the operation of new piece of machinery and the details
given will be lost in translation due to the existence of language barriers. This can often result in
the damaged equipment or injury to the employee. However, such incidents can be prevented by

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way of taking an immersion course in the local language of the country for the purpose of
improving the ability to communicate properly (Stahl & Tung, 2015).
Cultural Differences- the operation of the business in a foreign country requires a proper
understanding regarding the local culture. The communication by a manager with his clients is
also affected as a result of lack of proper understanding of the culture. Moreover, this also ends
up in affecting the negotiating abilities of the manager with other businesses. Some business
practices is considered to be common is one country while it is considered to be an insult in
another. Therefore, the formal etiquettes of performing the duties must be learned by the
international managers (Forsgren & Johanson, 2014).
Currency Issues- an international manager is required to deal with foreign currencies at the tie
of operating overseas. For the purpose of completing the transactions effectively and efficiently,
the manager is required to keep up with the conversion rates and current exchange rates. The
mistakes made by the managers in the accounts due to incorrect calculations can often result
legal complications and false reporting. This can even result in legal complications and false
reporting. Misappropriations and other related issues can be prevented by way of developing a
company- wide policy for the purpose of instructing the employees regarding the accounting
practices that involve foreign currency including the review of the closing procedures at the end
of the month thoroughly (Cano- Kollmann, Cantwell, Hannigan Mudambi & Song, 2016).
Laws and Regulations- if proper attention is not paid by the international managers towards the
legalities and regulations that govern the country in which the business is operating, it can
weaken the business and can create serious challenges in front of the managers. Tax laws,
government controls and standards for health and safety vary from country to country. Therefore,
it is the job of the international managers to properly understand the laws that affect the
operations of their business. Necessary research is required to be conducted by the managers
along with the communication of the expectations and findings throughout the organization.
Shift in the state of the economy and political power can often lead to changes in certain areas.
For avoiding the pitfalls, the managers are required to stay updated with the circumstances of the
country.

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On the other hand, there are some opportunities for the managers while operating in the global
environment.
Economies of Scale- while expanding the operations internationally, the international managers
are capable of reducing the total costs of the products of the business along with integrating the
results of critical resource functions in economies of scale. Core competencies can be attained by
the organizations through knowledge and resource sharing with other countries through the
international market. Knowledge sharing helps in the efficient production of goods and services
along with the expansion of its operations.
Increased market size- The international managers get an opportunity to increase the size of the
business in the international market by making requisite investment in research and
development. Such investment is made by the managers in the countries having scientific
knowledge for the purpose of gaining competitive advantage. The managers can prefer an
international strategy for earning profits and expanding their operations across the world
(Brannen, Piekkari & Tietze, 2014).
Return on Investment- there is an opportunity for the managers to increase the return on
investment for the business particularly for capital intensive investments such as research and
development or plant and capital equipment. Managers will get a change to enhance the
operations in an efficient manner in terms of expenditures relating to research and development
and capital investments (Deresky, 2017).
Practical Example of Organization that has faced Challenges of International Competition
and Expansion
Due to the increase in competition and expansion of the companies in the global market, various
organizations face challenges for survival. Qantas which is the biggest airline of Australia and a
largest travel agent had faced immense competition in the recent times due to the reduction in air
fares and adding of more capacity by the carriers. Also, the number of international flights has
also increased rapidly in the past few years which in turn had forced the existing airlines to offer
heavy discounts to the customers. Most of the companies in the airline industry have expanded
their market and have entered the international business. With the growing capacity of the
international competitors on Australian routes, there was a reduction of around 9 per cent in the

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ticket revenue on every international seat. The earning from the international business of Qantas
also suffered from a fall of 22 per cent (Shaffner, Mills & Helms Mills, 2017)).
According to the Chief Executive of Qantas, Alan Joyce, the travelers were completely aware
about the fall in the prices for the oil required for running the air planes. Cheaper oil resulted in
the capacity growth on the international flights resulting in the reduction of fares thereby having
a severe impact on the all of the major airlines. It was creating difficulty in the operations of
Qantas therefore the organization required stabilization in the prices so that their job can become
easier (Mathews, Bianchi, Perks, Healy & Wickramasekera, 2016).
Handling of Conflict Generation and Solutions
Effective conflict resolution is an effective function to be performed by the international
managers. With the expansion of the operations of the business worldwide, there are a number of
differences in customs, cultural background, language which can result in misunderstanding in
the organization. However, the conflict generation is part of the international expansion.
Solutions are required to be found according to the conflicts. More effective process could have
been adopted by Qantas for handling such conflicts and solutions (Usunier, van Herk & Lee,
2017).
The operations of Qantas suffered severely due to increased competition in the international
business as a result of expansion. Automatically conflicts arise for the international managers.
The international manager of Qantas can use a number of social initiatives for the purpose of
promoting understanding which is intended to increase positive relation among the employees of
the organization so that the work environment can be translated into a collaborative and
harmonious work environment (Fatehi & Ghadar, 2014). Stereotypes can be easily identified by
the employees along with the creation of an understanding regarding the manner of distortion of
expectations with the help of workshops designed for encouraging an open dialogue
(Beugelsdijk, Maseland, Onrust, van Hoorn & Slangen, 2015). In case, the conflict arises, it is
the duty of the international managers to understand that the effectiveness of the methods of
resolution depends on the country of origin of the employees. Qantas can also perform the useful
method of bringing the conflicting parties together so that they can discuss the problem openly
and can find a ground for the purpose of reaching the stage of a compromise. However,

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sometimes this method can also proof to be too confrontational. In such case, the use of a third
party is used to be more beneficial. Cultural consultation service can also be used as an
alternative of a third party for the satisfactory resolution of a conflict (Shenkar, Luo & Chi,
2014).
With the expansion of the global business of Qantas, a number of opportunities have been
offered for reaching a higher number of people across regions and countries. The expansion, on
the other hand, results in the increased risk of conflicts in the organization. Such conflicts can be
the result of differences in communication and cultural backgrounds. Sometimes conflicts also
arise due to lack of extensive training provided to the employees of the organization. For
effectively handling the conflicts, the local culture must studied by the international manager
before expanding the business into the foreign market (Fainshmidt, White & Cangioni, 2014).
Being a global company, Qantas also require understanding the role cross- cultural
communication plays in an organization. Therefore, it should further focus on the development
of effective training methods for their managers and expatriate employees. Such cross- cultural
training will be of prime importance in helping the managers and employees for quickly
assimilating to the cultural norms of the new surroundings (Melkman, 2018). Moreover, the
international managers should also try to understand the cultural differences prevailing between
the employees and always keeping such differences into consideration for the purpose of
increasing the satisfaction level of employees and productivity of business (White, 2017).
The factors that motivate the employees should be previously determined through the
development of an in- depth understanding of the cultural backgrounds of the individuals and
making adjustments in the methods accordingly. The organizational objectives and goals can be
build up with the information gained through the understanding along with the tailoring of
strategic decisions (Moran, Abramson & Moran, 2014).
Conclusion
Therefore, it can be concluded that international business includes the cross border transactions
of goods and services that takes place between two or more countries. A number of
responsibilities are required to be performed by the international managers for handling
international business. The international managers face challenges such as language barriers,

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cultural differences, currency issues, laws and regulations, etc. However, while operating in a
global environment, there are opportunities for the managers i.e. to increase the market size for
the business, attain economies of scale and increase the return on investment. The report offers
the practical example of Qantas as an organization that has faced challenges due to international
competition and expansion. At the end of this report, personal view point has been offered for
handling the generation of conflicts and the solution related to it in an effective manner.

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References
Beugelsdijk, S., Maseland, R., Onrust, M., van Hoorn, A., & Slangen, A. (2015). Cultural
distance in international business and management: From mean-based to variance-based
measures. The International Journal of Human Resource Management, 26(2), 165-191.
Brannen, M. Y., Piekkari, R., & Tietze, S. (2014). The multifaceted role of language in
international business: Unpacking the forms, functions and features of a critical challenge
to MNC theory and performance.
Cano-Kollmann, M., Cantwell, J., Hannigan, T. J., Mudambi, R., & Song, J. (2016). Knowledge
connectivity: An agenda for innovation research in international business.
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.
Fainshmidt, S., White, G. O., & Cangioni, C. (2014). Legal distance, cognitive distance, and
conflict resolution in international business intellectual property disputes. Journal of
International Management, 20(2), 188-200.
Fatehi, K., & Ghadar, F. (2014). A measure of international managers’ mindset. International
Journal of Commerce and Management, 24(4), 321-333.
Forsgren, M., & Johanson, J. (2014). Managing networks in international business. Routledge.
Mathews, S., Bianchi, C., Perks, K. J., Healy, M., & Wickramasekera, R. (2016). Internet
marketing capabilities and international market growth. International Business
Review, 25(4), 820-830.
Melkman, A. (2018). Training international managers: Designing, deploying and delivering
effective training for multi-cultural groups. Routledge.

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Moran, R. T., Abramson, N. R., & Moran, S. V. (2014). Managing cultural differences.
Routledge.
Shaffner, E., Mills, A. J., & Helms Mills, J. C. (2017). Reading Qantas History: Discourses of
Intersectionality and the Early Years of Qantas. In Insights and Research on the Study of
Gender and Intersectionality in International Airline Cultures(pp. 445-469). Emerald
Publishing Limited.
Shenkar, O., Luo, Y., & Chi, T. (2014). International business. Routledge.
Stahl, G. K., & Tung, R. L. (2015). Towards a more balanced treatment of culture in
international business studies: The need for positive cross-cultural scholarship. Journal of
International Business Studies, 46(4), 391-414.
Usunier, J. C., van Herk, H., & Lee, J. A. (2017). International and cross-cultural business
research. Sage.
White, R. (2017). Cross-Societal Cultural Differences and the Shaping of Opinions on
International Trade. In Public Opinion on Economic Globalization (pp. 171-229).
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