Future Global Corporate Strategy and International Management
The emergence of strategic management has always been attached to military history (Tallman, 2007). Studies in this area reveal various examples where the strategic management of offensive and counter-offensive led to decisive victories. Within the corporate sphere, it emerged following the Second World War. The dramatic growth of world nations such as China, Japan, and the U.S.A. served a beneficial environment for large international corporations that needed evolution in their planning and thought process. In fact, the competitive climate has created challenges for global corporations to sustain the success chart without meeting the changing requirements of business and adopting a strategy to counter these changes. Strategic management is an art that uses the processes and principles of management to create the mission or objective of any business. It identifies a proper target to meet the objective, established current opportunities and constraints in the business environment and creates methods to achieve the objectives. The operation of any business in the global arena is highly dependent on the quality and implementation of its strategic management. This document synthesizes major trends that shape the future strategic management in global corporations.
Drivers of Change
The shifts in strategic landscape that modify the transferability of resources across nations accrue from complementary internal and external forces.
Globalization
Greater global integration via market liberalization, trade, investment, and migration have not led to convergence but intensified the gap between rich and poor, powerful and powerless nations in the world order. Therefore, it has been accompanied by issues of inequality and development, which remain central to the reality of globalization.
Dhillon and Ebrary Inc. (2001) explore global challenges in the new Millennium. They discovered that organizational and technological capabilities are benchmarked against contenders worldwide, and business models are crafted to exploit global integration and linkages. International operating companies create pressures on competitors to invest on staying ahead in core business where they may secure market leadership and hence to global focus (Vrdoljak et al. 2016). Such competitive pressures shift up and down the value chain, particularly when consumers shift towards global marketing or global sourcing. Global operations become imperative when markets transcend national boundaries, and customers pursue diversity and competitors operate internationally at various points around the globe.
White (2004) found that these markets dynamics trigger different pressures for customers and international companies. Given that rival firms cut their prices via global integration, it would create pressure to exit or strengthen operational capabilities. On condition that consumers pursue global sourcing, suppliers will be forced to expand their global scope to sustain their globally operating customers. Many entities in business-to-business industries might hence be pushed to invest overseas following the internationalization of their customers. Manufacturers of consumer goods face varying consumers in each country and might find it easier to expand their brands to related items and thereby to prosper through diversification strategies.
Devinney et al. (2010) predict the future of international business and strategic management. They reveal that globalization has challenged how managers have to conceptualize their business strategies. In the 70s, international firms had to choose between being a small fish in a big pond and posing as a big fish in a small pond. Today, they do not hold this choice; globalization has led to one big pond, where nearly every firm, regardless of its magnitude, contends with any other company that seems to offer similar goods (Devinney et al. (2010). Therefore, the strategic challenge is to observe the industry internationally and to identify threats and opportunities on that level. Often, new business opportunities emerge with new business models that merge operations at varying locations worldwide. While seeking to identify and apply such opportunities, global companies must seek new organizational capabilities and structures across the company. Such a model must make interaction across borders a culture for people in various functional departments, not only in leadership positions. Often, this global organization can be built via mergers and acquisitions; these are often accompanied by leadership challenges of integration management cross-cultural and cross-border contexts. Hence, the management challenge is to devise corporate capabilities, particularly communications infrastructure and human capital that creates and exploits global linkages. This demands leaders with an international perspective, coupled by cross-cultural competencies to function across large geographic distances.
Market Liberalization
A nation's institutional framework entails all the formal and informal laws that guide business corporations, and thus it moderates how businesses grow, compete, fail or survive. When these rules fail to secure efficient operation of the markets, companies might organize transactions within an organization (Oakey, 2008)....
Therefore, reputable entities benefit from access to the best talent, which later are allocated throughout business based on needs. Other resources that may be shared across a conglomerate include bargaining positions and network relationships. International growth grounded on sharing these resources might hence be appropriate growth strategy in weakly transparent and network-oriented contexts.
Changes in institutional contexts are characterized by legalities targeted at making the market efficient for instance, reducing tariff or non-tariff barriers to global business. This liberalization makes it easier for foreign investors or importers to compete (Oakey, 2008). Besides, information about prospective employees and partners becomes readily available thus reducing the incumbent's advantage from their nation specific networks and knowledge. Thus, market liberalization reduces costs of moving goods across borders and thereby creates opportunities to create capabilities based on international operations. Within such a liberalized context, international companies can easily attain a competitive edge with business structures that integrate and coordinate geographically disperse operations.
Managing Diversity
Managers typically see cultural diversity in businesses as being an issue to be handled. In fact, it can be a drawback or it can be an important source to improve competitive advantage. Failing to handle diversity can create many problems for an organization. The first important issue is economical price due to high turnovers, absenteeism, and legal cases. Organizations lose all the money spent in hiring and training when a disappointed worker exits. Moreover, high turnover indicates workers are regularly in the learning stage instead of executing at full potential. Absenteeism results in a significant cost: there is a positive relationship between employees' views of being respected and cared for and their attendance. Moreover, legal cases on racial bias can also cause fiscal cost to the company
By capitalizing on the prospective benefits of employee diversity, organizations will have added value and aggressive benefits over organizations, which do not react to this challenge. Companies can drive company growth and improve customer support by including their different workers. This implies making use of cultural sensitivity, language skills, information of business systems in their home nations, and industry information. With these key resources, organizations will have aggressive benefits in promoting products or services to a progressively migrant community as well as to the international market. For instance, the Avon Company was able to turn around its unprofitable inner city markets in the U.S. by placing Hispanic and African-American managers in charge of marketing to these populations. Just as cultural minorities may choose to work for companies who value diversity, they may also choose to purchase from such organizations
A case of Coca-Cola
Organizations have been looking for various ways of handle workplace diversity, which has drawn some difficulties. However, leading corporations like Coca Cola have done their best to deal with this phenomenon. The company operates in different countries characterized by completely different cultures. Therefore, in every nation that Coca-Cola functions in, its culture has to be taken into consideration in developing the organization framework. To efficiently handle diverse employees as well as continue to promote its diversity culture, Coca-Cola organized various outreach and monitoring groups to educate employees and functions as a device to address diversity difficulties as well as guide employees through the day-to-day activities both in their personal lives and at work. For instance, the Coca-Cola Lesbian, Gay, Bisexual, Transgender and Ally (LGBTA) aim to promote an inclusive work environment. It fosters a platform for sharing where workers feel comfortable with their ethnic background and contributes to the business success. Another initiative is The Coca-Cola African-American Business Resource Group aimed at advocating for a winning inclusive culture where individual diversity is respected.
Future Trends in Strategic Management
In the new business environment, the top-down management approach is fundamentally disappearing. Gen X, Gen Y and baby boomer managers are bringing different management approaches and thinking to international organizations. 20 years ago, Gen Xers started pressurizing baby boomers to experiment with electronic media and virtual relationships following the increased use of e-learning, websites, video conferencing and email. Today, managers must understand and implement various strategic management concepts to maneuver companies across real-time issues. During et al. (2001) hold that managers should decide on the magnitude to which they will be involved in the operational and strategic decision-making procedure. The problem facing organizations is both external and internal to the company's operational environment. They demand that managers must incorporate decisions made regarding emerging concerns into operations objectives. The strategic management skills of a manager extend applying tactics, evaluating the purpose and guiding…
