Interdependence and integration of individual countries of the world is called globalization. The globalization integrates not only economies but also societies. The globalization process includes globalization of markets, production, technology and investment. However globalization has two important components, one is globalization of market and other is globalization of production. Today, a company can view the entire world as one country for its business operation. In fact the businessmen were doing their operations even in the past. History indicates that business operations were existing across the countries even in the old days. Therefore the concept of global business is as old as civilization. Crossing national and political boundaries for the purpose of business may be called as globalization. Globalization has the following features: Planning and operating to expand business throughout the world. Removing the differences between domestic and foreign markets. Buying and selling goods and services from one country to another Continue reading
International Business
International Business Management deals with the maintenance and development of a multinational operation across national borders, whose manager has the knowledge and the skills to manage and handle cross-cultural processes, stakeholders and business environments in a right way.
Top Reasons for Mergers and Acquisitions in Global Scenario
Mergers and acquisitions are considered as one of the routes by which organisations can expand their presence into new markets across geographies or product segments. Essentially these forms of expansion are external in nature in that they all have an element of foreign presence attached to them. These methods of expansion of business have the advantages of reducing risks as there is a new local knowledge or expertise which is added onto the organisation. There are potential for the acquired organisation to bring in new knowledge and synergies to the total organisation which may be valuable in operating in the new market conditions. But along with the advantages to the organisation there are also associated disadvantages also of falling into debt due to the leveraged nature of the acquisition and higher risk of bankruptcy of the organisation. These factors are analysed below. Too much Debt and Risk of Bankruptcy Mergers Continue reading
Levels of International Strategy
The globalization of the economy, internationalization of businesses and emergence of new markets are all key themes in contemporary business. Whereas international business may once have been the province of organisations with sufficient scale and reach, these types of companies — typically multi-national corporations – no longer have a monopoly on this kind of business. Increasing numbers of firms, of varying scale, are confronted with compelling reasons for expanding their activities across multiple national boundaries. In some cases, such motivation includes the knowledge that success in international markets is a pre-requisite for survival; if competitor organisations succeed in international markets, they may achieve the scale and liquidity which affords them sustainable competitive advantage. There are mainly three levels of international strategy. They are; Corporate Strategy Business Strategy Functional Strategies Short description of these three are given bellow, 1. Corporate Strategy: Corporate strategy attempts to define the domain of businesses the Continue reading
Emerging Trends in Global Organizational Structures
Though global organizational structures tend to depict certain kind of rigidity, structure tends to change and new trends emerge. Mixed Nature of Structures Because of growth dynamics, companies change their organizational structures. Simplified organizational structures get replaced by complex or mixed structures. Until organizational re-structuring is made, new acquisitions might report to headquarters. Circumstances prevailing in a particular country, product, or function might necessitate separate handling until a re-structuring is effected, apart from the overall structure. The structure of 100% subsidiaries is different from that of JVs. 100% subsidiaries enable a deeper network of communications. Overall structure may be incomplete and less revealing. PepsiCo is organized by product lines, namely soft drinks and snacks. This would seem to imply that each product line is integrated globally. However, each line has its own global division, which separates it from domestic operations. Structures Evolve to Suit Growth and Need A company that Continue reading
Foreign Exchange Department of Banks
The Foreign Exchange department, which is also being called as the International Banking Division, is one of the important departments of the banks operating in international market. In India also all scheduled commercial banks, both in the nationalized or non-nationalized sectors, do have Foreign Exchange departments, both at their principal offices as well as offices, in metropolitan centers. This department functions independently under the overall change of some senior executive or a senior officer well-versed in foreign exchange operations as well as in the rules and regulations in force from time to time pertaining to foreign exchange transactions advised by various government agencies. The principal function of a Foreign exchange department is to handle foreign inward remittances as well as outward remittances; buying and selling of foreign currencies, handling and forwarding of import and export documents and giving the consultancy services to the exporters and importers. Besides this, the department Continue reading
Global Functional Structure of MNE’s
An organization based on functions is the traditional and the most logical. International Functional structure of Multinational Enterprises, involve grouping together functionally like-activities along functional lines like marketing, R&D, production, etc and place them under specialist classes of personnel. Functional heads of foreign affiliates communicate to and get communication from same functional specialists at the parent concern. Marketing people of the foreign affiliate report to marketing people of the parent or their order. Finance people of the foreign affiliate report to finance people of the parent or their order and so on. But a firm offering many product lines will find this structure less successful. Following figure gives a simple model of Global Functional Structure. Merits of the Global Functional Structure Some advantages of the functional structure are: The structure is simple and clear, making communication lines distinct and direct Reduces overhead Provides clearly marked career paths for hiring and Continue reading