International Management: Challenges and Opportunities

     This chapter has examined areas of international management. U.S. firms account for a significant percentage of all international business. The student of management thus needs a working knowledge of this area.

     In deciding whether or not to go international, a firm must evaluate many factors. lt can begin analyzing the possible advantages and disadvantages associated with such an undertaking. On the positive side are profit, stability, and the possibility of a foothold in an economic union, of which the European Common Market is a famous example. On the negative side are unfamiliar customs and cultures, delicate company-government relations, risks, expropriation, and the possibility of having to bring in foreign partners, which, for many businesses, constitutes the biggest drawback. In an effort to hedge their risks, many firms are turning to joint ventures.

     If a company decides to go ahead with a foreign operation, it must find an appropriate organization structure, which will depend, of course, on the amount of involvement it is willing to undertake. For some firms a branch organization will do; for others a subsidiary is necessary.

     The next question is one of control. Which is best: heavy, intermediate, or light? Most firms opt for intermediate. Then comes staffing, which entails identifying qualified people and offering them sufficient monetary incentive and upward mobility to get them to go abroad.

     The last section of this chapter examined the multinational corporation. Most multinational firms are American, and they carry a good deal of economic power in the international arena. However, with this power comes responsibility, and the challenge of the 1980s is to continue incorporating foreign nationals into the upper ranks of management and to see that the interests of the host country, as well as the corporation, are properly served. In so doing, the multinational firms will become truly international in nature.