Intrntinl hllngs and ssibl rtunitis fr Mngrs rting in a Glbl nvirnmnt - Essay Example

INTЕRNАTIОNАL СHАLLЕNGЕS АND РОSSIBLЕ ОРРОRTUNITIЕS FОR MАNАGЕRS ОРЕRАTING IN А GLОBАL ЕNVIRОNMЕNT Name of Student Institution affiliation INTЕRNАTIОNАL СHАLLЕNGЕS АND РОSSIBLЕ ОРРОRTUNITIЕS FОR MАNАGЕRS ОРЕRАTING IN А GLОBАL ЕNVIRОNMЕNT Globalisation is a phenomenon that has been appreciated as a concept, process or trend that managers have taken up in their course to increase their organization trade beyond the national boundaries and increasing their revenues and profit margins. However, the global environment is commonly seen as a brave leap for organization managers to set up shop there. In this case the potential reward for globalisation of the organization managers seems to be glittering, huge and glorious but however they are a number of challenges and opportunities which managers are bound to face. These challenges facing managers can range from administrative, cultural and technological aspects (Mba, 2015). This paper therefore highlights, the international challenges that manager’s face and the possible opportunities that they might gain from global operations. One of the challenges faced by managers in their globalization course is the different legal and administrative environment. In this case, each country has its own administrative and legal and administrative environments which are distinct. Thus, each country has its own protected aspects and entities which differ depending on the countries. The domestic legal systems of these foreign countries also pose as significant challenges for organizations especially if they pose a barrier to the smooth operation and existence of this organization in these new markets (Leddy, 2013). The diverse tax regime in different countries is also a common challenge which falls into the administrative environment category. In this case corporation tax is evidently a huge challenge for any organization’s globalization course. This is attributed to the diversity of this issue where the corporation taxes relatively differ depending on the various countries (Mba, 2015). Harvey Norman, a kitchen, floor and household item retailing company globalisation challenges in the context of different administrative and legal environment is evident through the company’s it the high corporate taxes especially in the Croatian and Slovenia market. In this case the company’s management enjoys relatively low corporate taxed in the company’s operations in Australia and New Zealand. This is attributed to the formed trade treaties between these countries where for a long time New Zealand and Australia have been known for their trade partnership an issue which led to induced low tax rate in organization from these two countries operating in the other country. With an issue like this the international manger faces challenges of high operational costs and thus he or she needs to work extremely hard to break even or else his or her branch may be forced to shut down and vacate that market (Twarowska and Kąkol, 2013). On the other hand, different administrative and legal environment many also bring up some opportunities for an organization’s international management. In this case, it is not necessary that difference in legal and administrative environment have negative impact in organizations globalization course. Venturing into other businesses might present better working environment for these organization an issue which might foster these organization globalisation course and improve its management in that some multinationals receive tax breaks and less interference (Leddy, 2013). Better administrative and legal environment ensure that managers and employees of foreign companies benefit from a conducive environment which allows their smooth operation in these foreign markets. In the case of Harvey Norman its managers have also benefited from these opportunities in regards to the company’s global expansion course through the European Union aid. In this case the company receives aid from the European Union in the course of its expansion in the countries within Europe this aid includes linkage to franchising partners and low tax rate (Harvey Norman holdings LTD, 2015). This particular factor hugely encourage Harvey Norman global expansion course since this aid ensures that its expansion course would be faced with minimal barrier and arising problems and eases the work of its managers (IBIS World, 2015). On the other hand, the company’s willingness to change with the current fundamental shift in the legal and administrative the retailing business is also a factor that has greatly fostered its global expansion course. In this case the its global managers are conducting researches to look for ways in which they can embrace value addition in Norman’s products as well as coming up with flexible terms of payment in order to gain the consumers’ confidence in the company and strong buying power from in these markets. This has given its global managers an opportunity to think and analyse the market independently by positioning the company through distribution points in countries they operate in (Jenner, 1982). Harvey Norman has an estimated 247 distribution points sites in Australia and New Zealand which ensures easy collections and returns through these distribution points the company has been able to integrate its stores with its e-commerce platform an issue that it has enjoyed in its globalization course and helps its global managers communicate with the headquarters in real time (Harvey Norman holdings LTD, 2015). The other challenge that global managers face is the world economies. In this case the diversity of the world economies might prove a great barrier for the smooth operations of these company’s in new foreign markets. Therefore, some aspects in the economy such as the value of the currency and the taxes directly affects a country in the sense that some managers may be earning a higher salary compared to even the president of that country and this poses a challenge to these mangers as they are heavily taxed and always castigated for the disparities in pay among foreign and local employees (Umlas, 2008). These managers also experience pricing challenges for instance, Harvey Norman faced this particular problem in its expansion into the Croatia and Slovenia markets; countries, that have recently been faced with an economic crisis. In its globalization course Harvey Norman managers have faced these challenges which have posed as a limiting factor to the growth and success of the company. The financial crisis problem which is characterized in some of the countries where Harvey Norman has expanded its business operations to for instance, Northern Ireland financial recession and economic downturn seemingly have a negative impact of Harvey Norman expansion operations and thus makes management of these branches challenging. The managers are faced with the problem of managing an unconfident workforce which is also unmotivated due to the economic condition in these countries (IBIS World, 2015). The management of such workforce proves to be quite hectic for managers. In this case the falling property market have evidently extracted a heavy toll on Harvey Norman company management where it was reported that it incurred losses of up to €1.24 million month in the first half of the year of its operation in the Irish market (IBIS World, 2015). This has hampered Harvey management’s further global expansion course with the management now being keen on not taking any further risk due to the challenges that it had faced in the ailing Irish market. In regards to the challenges brought by world economies issue in the case for Harvey Norman the falling UK retail market has also been another challenge that Harvey Norman management has been faced with in the course of its global expansion. In line with this the company’s management has also been faced with the problem of trying to convince the stake holders in the company of a possible turnaround in these falling markets an issue which has been hampered by the fall of the company’s products buying power in its operations in both the Irish and UK market (IBIS World, 2015). On the other hand, Harvey Norman Australian markets have also face some slow growth challenges which has posed more challenges on the company’s management. In this case this problem is blamed on the growing online retailing issue which has been a huge challenge in the retailing business especially in Australia and New Zealand (Harvey Norman holdings LTD, 2012). The company recently announced a 20% fall in profits in its first half year in 2015 in its Australian and New Zealand market. This particular problem is attributed to online retailing which has overshadowed the retailing sector in both New Zealand and Australia and its managers have seem lack a working strategy to help the company turn around. The effectiveness of a company’s selection and placement criteria is a major opportunity in that most markets where this organization is expanding to have the necessary capabilities to help it grow and make management easier. A potent environment for a business to grow in gives a manger the opportunity to formulate and implement strategies that will help it grow its profits, motivate its employees as well innovate new products (Jenner, 1982). For the case of Harvey Norman it has benefited from effective selection and placement especially in its expansion into the New Zealand market which is characterized by the company’s integrated franchising approach as well as development capabilities to help it manufacture more products. Through this approach the company franchises to private business owners who operate under its brands names .In this case these franchises sell the wide range of Harvey Norman product. This particular approach has been quite successful for most companies’ expansion into the global market (Leddy, 2013).. This is evident through an increase in this company’s recorded revenues by 6.8% as well as an increase in the company’s net profit in the year 2015. Cultural diversity and current industrial trends are other challenges that organization management face in their globalisation course. In this case, the cultural diversity problems give these organization managers hectic time as they try to realign their workforce in these new markets with the organization goals and overcome language barriers as well as customs (Twarowska and Kąkol, 2013). Global managers should be cautious of the culture in the countries where their organizations are expanding to this ensures that its products and services do not collide with the beliefs and practices of the country. On the other hand the industry trends are also another issue that organization should be cautious of in their globalisation course. Keeping up with the industrial trends helps these organization have some competitive advantage over the others in their globalisation push and thus international mangers who have little or no experiences working overseas are likely to encounter this as a major challenge (Umlas, 2008). In the case of the Harvey Norman the company management is experiencing challengers relating to the industrial trends. Online retailing is a new trend in the retail industry and Harvey Norman is experiencing challenges due to the company’s reluctance in adopting and training its managers on this new industry trend. This has therefore led to most of the company’s potential customers to opt for these oversee markets which are significantly cheaper. In this case Harvey Norman’s local and foreign management has been criticized of not embracing online retailing and e-retailing which is a common trend in the household goods and furniture selling business (IBIS World, 2015). It appears that online retailing is the future of retailing with most of Harvey Norman competitors adapting to this particular phenomena. This particular problem for Harvey Norman is characterized by Gerry Harvey the Chief Executive Officer of Harvey Norman being adamant that online retailing and e-tailing has close to none relevance in the household and selling industry. This therefore means that its likely to miss a significant amount in sales due to the company reluctance in adapting to the current industrial changes and advance towards global management trends. However in defence, Harvey Norman claims that online retailing and social media are overrated as it was in the dot.com bubble period when most company’s embraced this business context only for it to backfire. Therefore, the company’s dotcom bubble period failure have led it to be extremely cautious in adopting online retailing since it seemingly built around the excitement that the dot.com rush was built on and this is challenging as some countries are yet to adopt online retailing due to its nature (Mba, 2015). In my opinion, organizations should train their international managers on how they will overcome challenges associated with managing branches abroad as well as utilising the available opportunities to propel the business to greatness. If an organization is operating in an environ where culture and language are likely to affects its management and yet they do not want to go for a localisation strategy then training the potential mangers, will save the company and help these managers overcome these challenges in the global environment. In conclusion, global managers have faced problems over the years in the global environment in terms of language, culture and technical development. However with proper market research and training these managers will overcome these challenges and in some instances turn them into opportunities for the company. Alternatively, global managers can seek the service of local professions to help them fully understand the market and run crucial departments. Not only does this help in the management but appeals to consumers throughout that region. References Twarowska K., & Kąkol M, (2013). International Business Strategy – Reasons and Forms of Expansion into Foreign Markets. Poland: Maria Curie-Skłodowska University. HARVEY NORMAN HOLDINGS LIMITED. (2012). ACTION PLAN - Australian Packaging Covenant. Retrieved from the url: http://www.harveynormanholdings.com.au/pdf_files/Harvey-Norman-Holdings-Limited-APC-Action-Plan-Review-Document-March-2012.pdf. IBIS World Company Premium Report Harvey Norman Holdings Ltd. (2015). Retrieved from the url: http://clients1.ibisworld.com.au.ezproxy.federation.edu.au/reports/au/enterprisepremium/default.aspx?entid=3662 Jenner, S. (1982). ANALYZING CULTURAL STEREOTYPES IN MULTINATIONAL BUSINESS: UNITED STATES AND AUSTRALIA. J Management Studies, 19(3), 307-325. Retrieved from the url: http://web.b.ebscohost.com.ezproxy.federation.edu.au/ehost/detail/detail?sid=186cc298-8a9e-49df-aa73-4cbe9b2e5891%40sessionmgr106&vid=0&hid=118&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#db=bth&AN=4553327 Leddy, C. (2013). Business Opportunities and Risks: Plan Before You Expand Overseas. Middlemarketcenter.org. Retrieved from the url: http://www.middlemarketcenter.org/expert-perspectives/business-opportunities-and-risks-plan-before-you-expand-overseas Mba, Sr, I. (2015). Conflicts Encourntered by Multinational Corporations in Cross-Cultural Communication and its Solutions. Journal Of International Business And Economics, 3(1). 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