International Management: The Challenges Of Globalization In International Business

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The increase of globalisation has presented businesses with unexampled opportunities for global investment and trade. Deemed by Rosabeth Moss Kanter as “one of the most powerful and pervasive influences on nations, businesses, workplaces, communities and lives” (1995, as cited in Schermerhorn et al., 2014), globalisation has allowed many multinational corporations (MNCs) to expand coordination and control of their activities to foreign countries by forming subsidiaries and joint ventures. This is necessary to establish a presence in the increasingly competitive international market and is now a pre-requisite for business survival and growth. To maintain and improve their global competitiveness, MNCs must manage both local and foreign enterprises effectively. This concept of international management can be simply described as the “management in organisations with business interests in more than one country” (Schermerhorn et al., 2014, p. 90) and is applicable to MNCs, who are defined as organisations with “extensive international operations in more than one foreign country” (Schermerhorn et al., 2014, p. 101). Undeniably, administrating operations on such a vast basis will present challenges. These challenges have been thoroughly analysed in numerous studies, which have also offered methods to develop effective policies and practices that allow MNCs to best control these factors. Despite the immense range of suggested solutions made available, these difficulties remain a steadfast force that managers must consider in every decision made for the company. Whilst the foundation of each individual challenge seemingly differs so greatly from one another, there is a connection between most that can be referred back to cultural difference...

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...in mind whilst developing the new plan. This demonstrates one of the many considerations managers face; two societies, culturally unalike, must both be somewhat satisfied with new policies introduced internationally. This reinforces the idea that challenges originate from cultural differences; the differences heavily influence intra-organisational interactions.
Interactions – especially transference of knowledge – within an organisation can be seen to have a negative association with national and organisational cultural differences. It is now realised that “knowledge-based resources are the most strategic resources of the firm” if there is a desire to sustain a competitive advantage (Ordonez de Pablos, 2004, 105). As stated prior, diverse perspectives and knowledge can improve the workforce dynamic (Combs et al., 2005, p. 348) yet the resources based off knowledge

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