International Management Essay Example for Free

International Management EssayQ.1. Good governance is one of the qualifying features for describeing inbound enthronization. What ways in which governance can be improved to help countries value from foreign investment?Globerman and Shapiro (2002) studied the effects of governance quality on Foreign Direct Investment inflows and outflows, by victimization a sample of underdeveloped and developed countries between 1995-1997. They applied HDI (Human Development Index) and ESI (Environmental Sustainability Index) along with Kaufmanns sextet governance indicators which include junction and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law and jibe of corruption) to assess the impact. They found that good governance had a strong positive kinship with FDI inflows. Thus, countries can benefit the most from inward investment by improving on the six dimensions of governance suggested by Kaufman et al (2009).In ward investment generates job opportwholeies for local citizenry and addition the level of sparing military action in the host country. It besides raises competition in the domestic market and the standard of living of people by improving the quality of products/services being offered, reducing prices and giving more value for money. With FDI inflows, developing countries benefit from transfer of technology and management practices. Many MNCs (Multi-national companies) drive research victimization, innovation and are obligated for training the human capital of a little developed host country. Labor productivity and increase in real incomes of citizens of a country are important benefits of FDI inflows into a country.Countries must encourage economic freedom and liberalize trade in order to benefit from FDI inflows. A sound financial brass including banks, stock markets and bond markets attract foreign investors. A strong financial system onlyows MNCs to spread out and die their expected potential and does non limit their growth due to capital constraints (Alam, Mian Smith). When MNCs get opportunities to dilate their operations, they bind investments in the host country. This additional investment from foreign investors and companies drive economic growth and development in the host country. Governments must develop secure property rights, put in place an efficient human race sector and limit regulatory bans and restrictions on foreign companies.Governments must take measures to improve the investment humour (by offering incentives, tax holidays, reduce import duties) to attract and retain foreign investment. Also, governance should be do transparent and free of corruption to gain maximum benefit from FDI inflows (Globerman, Shapiro, Tang, 2004). Government regulation should hardly depend to correct market failure and protect the welfare of the consumers, environment, employees and society. Bureaucracy, red tapism, complex documentation and regulations should be eliminated to attract more foreign investment and derive maximum benefits from it. Corruption not only deters foreign investors nevertheless(prenominal) also limits the spill over effects of economic growth and development to the masses.To reap the maximum benefit out of inward investments is to improve governance in the areas of human capital development. An educated and healthy men not only attracts foreign investors but also facilitates quick and effective knowledge and skills transfer. A less skilled and physically weak human resource of a host country starts to rely on the foreign investors and learn nothing from them. Thus, governance and budget allocations in the areas of human capital and infrastructure development must be improved. Such effective governance that protects local interests from unwarranted exploitation but also at the same time creates a conducive environment for foreign investment benefits the most.Q.2. Is sustainability a newfan gled meaning? Discuss the extent to which handicraftes and government have joined up to sustainability?Sustainability was well defined in a 1987 UN Conference as accumulateing present needs without compromising the ability of future generations to meet their needs. This encompasses ecological sustainability and human sustainability. Ecological sustainability refers to redesigning organizations to contribute to sustainable economic development and the protection and substitute of the biosphere (Dunphy, 2000). Human sustainability means building human capability and skills for sustainable high level organizational surgical procedure and for community and societal well-being (Dunphy, 2000).Many telephone circuites and governments did not include sustainability as one of their primary objectives to achieve. parentage organizations focused all their efforts and strategies on maximizing profits, even if that entailed exploiting the environment and depleting natural resources to obta in short precondition financial benefits. Governments too ignored this important issue. However, this wide cattle ranch ignorance and disinterest towards sustainable development that prevailed ten long time ago has been reversed. The awareness about the issue has increased now but a lack of cooperation and mind between the businesses and governments has limited the success of initiatives towards sustainable development.There is a battle between voluntarism and compulsion personnel casualty on between governments and businesses (Cowe Porritt, 2002). According to Cowe and Porritt, prominent businesses understand their responsibilities, but governments have not taken up their share of responsibilities, suggesting that voluntary business action towards sustainable development is better as compared to government interposition that ultimately has a negative impact.Government policy makers wrongly believe that attaining sustainability just involves devising environmental controls or em ployee protection laws to reduce exploitation while the businesses hold that by increasing the efficiency and productivity of their existing production systems they can prevent wastage of resources and environmental degradation. Sustainability actually involves developing whole new business models and incorporating organizational cultural change. It is the job of the governments to create awareness and give incentives for businesses to change their policies, procedures and incorporate sustainability in their resource and mission.U.S department of physician presents an example where a government department has increased the awareness sustainability. U.S Department of Commerce has encouraged U.S. firms to implement sustainable manufacturing practices. Instead of creating environmental and employee laws and levying tax charges on firms, the U.S Department of Commerce has spread the perception that firms that adopt environmental and economically sustainable manufacturing processes are able to reduce their cost of doing business and gain competitive advantage. U.S Department of Commerces Manufacturing Services unit has introduced a Sustainable Manufacturing first (SMI) and Public-Private Dialogue with the aim of outlining U.S. industrys most pressing sustainable manufacturing disputes and coordinating public and esoteric sector efforts to address these challenges (International Trade Administration, 2010).Q.3. Using familiar case study, apply and critically evaluate the strategies for refinement into emerging markets?In recent times China and India, the deuce most fast emerging markets in Asia, have presented great opportunities and large market segments to be explored by foreign multinational companies. These countries not only have large consumer bases for products of international companies but also provide highly talented, educated yet less costly human resource (Van de Kuil, 2008).Taking the case of India, we understand that various MNCs have used anti thetical elaborateness strategies to enter the Indian market. Licensing and franchising is an effective expansion strategy. Licensing refers to an arrangement by which the licensor or the international society gives the right to the licensee to use patent rights, trademarks, copyrights or product or processes know how (Levi, 2007). Franchising refers to an arrangement or relationship whereby a franchisor provides a license to the franchisee to use the franchisors blur name, production techniques and management techniques in another(prenominal) geographic market. Franchising was used by McDonalds to enter the Indian market.The advantage that McDonalds had by using franchising to expand into the Indian market was that it did not have to invest large sums of money in India and so did not face any financial risks and development and set up costs of business. It was not only a cost effective way of expansion but it was a quick way to expand. Franchisor (McDonalds) has considerable con trol over the management and processes of the franchisee and at the same time benefits from the local knowledge of customer behavior and market trends that the Indian franchisee possesses.The Indian franchisee benefitted as it did not have to develop brand identity or brand positioning. It simply had to leverage the already effected brand name and equity of McDonalds. However, a major challenge that McDonalds had to face in India was that of maintaining quality standards that it has internationally. In developing countries, it is difficult to find employees that are already trained to carry out the standard services.Strategic alliances and Joint hypothesiss are other important expansion strategies used by foreign companies to enter the Indian market. Strategic alliance refers to an agreement between two companies in order to combine their value chain activities for the purpose of competition advantage (Levi, 2007). Joint Venture occurs when one company has enough stake in another company that gives it a right to voice opinions in management issues but does not allow it to dominate. When the international retail giant Wal-Mart wanted to expand its business to India, it formed a joint supposition with Bharti Enterprises, Inc in 2006.Wal-Mart benefitted immensely from this joint venture to establish itself in the Indian market. Both Wal-Mart and Bharti Enterprise were able to form a working business unit (Fea, 2009). Wal-Mart was able to mitigate reputational and legal risks as it had a local partner involved. It was able to comply with all the Indian government restriction for foreign investors. The only likely threat to both the parties of this joint venture is that conflict of objectives and strategies may create rift between the two partners and raise risks for both.