International Manager's Three Keys to Success

The world may be getting smaller in terms of the speed of communication and transportation and the outreach of the multinational corporations, but it is still a highly diverse place in terms of needs and interests of people in different localities, be those needs culturally, economically, politically, climatically, or otherwise driven. It is also a place of many changes the frequently take place on a relatively short timetable. It is for this reason that the three most important aspects of effective international management are strategic management, decision-making process, and managing cross-cultural negotiations. Strategic management is essential for devising a plan of action for different localities and different times. Management of cross-cultural negotiations is key to establishing effective and profitable operations in localities where local customs demand an adjustment to negotiating approaches typical of the corporation's home country. Finally, the ability to face and solve challenges associated with the process of making decisions is of utmost importance in ensuring that the company makes the right decisions, devise a proper plan for implementation, and monitor such implementation carefully and effectively.

Strategic management is the process by which the organization determines what it wants to achieve, how it wants to achieve it, and then devising and implementing a plan to that regard. Strategic management concentrates on the organization's long-term goals, which means that not only must the plan be comprehensive and far-reaching, but also that it must possess considerable flexibility to adjust effectively to the changing environment in which the organization - or its affiliates - operates. In devising and implementing such plans, organizations can place an emphasis on the economic imperative (controlling costs while findings the best products to offer and the best market segments in which to offer them); the political imperative (customizing their strategies according to the country of operations); the quality imperative (standing out in terms of quality of products or services); and administrative coordination (devising situation-specific managerial approaches rather than a more general program). They can also combine these approaches in any combination they deem appropriate.

While strategic management is important even for a company operating in one national market, especially if that market is as large as the United States, it is crucial for an MNC operating in various locations around the world. A multitude of factors must be considered when devising strategy, including, but not limited to, the size of a potential customer base and its spending capacity, currency exchange fluctuations, local facilities and infrastructure, political atmosphere, level of social stability, cultural peculiarities that might influence sales of certain products and services, transportation costs, local human resources, and even weather. In light of this, it would be quite surprising to find an organization operating using only one of the four approaches described above. A product selling well in one country, or even part of the country, might not be in high demand in other areas of that country, and there is an even better chance that demand will differ in another country. A particular product might be selling better to a certain population segment than to a different one within the same geographic locality. Operational costs also will differ, often significantly so, from one location to the next depending on a variety of factors. For this reason, the organization should not rely solely on the economic imperative. With global communications bringing the world together and leading to a more active mixing of consumer interests, the organization probably should not rely on the country-specific political imperative either, especially where long-term planning is involved. The quality imperative is probably the only one that can stand on its own as a theme-specific managerial strategy, but even this approach might not always stand the test of time in an environment where consumer emphasis changes from quality to price, for example. It thus may seem like administrative coordination is the most optimal approach to strategic management, but what must be taken into account before drawing such a conclusion is the fact that devising strategies based on the immediate situation on the ground requires more resource expenditures than any other approach, makes long-term planning and even contingency planning practically difficult, and leaves less room for error in the evaluation and analysis of the situation on which such a plan is based.

Managerial decision-making process is the method by which managers decide on a course of action after evaluating the available alternatives. The process consists of specific stages that are usually chronologically continuous, although feedback loops exist in various stages, particularly in the later stages associated with implementation and control. After the issue is perceived, identified, and formulated, the manager searches for the possible courses of action. After the search is completed, these courses are evaluated, and eventually one (or more) is chosen for implementation. Once operations begin, the implementation of the chosen course(s) of action is being carefully monitored to ensure that adjustments, if necessary, are made in a timely and effective manner.

Decision-making process is closely associated with strategic management planning, particularly for a large, multinational organization, depending on a number of aspects. Command-and-control structure within the organization is one such aspect. Among others are the size of the organization and of its affiliates in other countries, available operational capital, the importance of brand name as revenue driver, product line and its diversification, specifics of distribution of operational costs, existence and extent of competition, and competence, skill, and enthusiasm of the workforce. It is unlikely - and often counterproductive - for an MNC to utilize the same decision-making process for every one of its operational units regarding of location and other operational specifics. Even with all other factors developing similarly, cultural differences among employees in different geographical localities would not allow the development of homogenous dynamics in the decision-making process.

Cultural differences represent the main reason why successfully managing cross-cultural negotiations is another factor essential for an effective operation of an international organization. Negotiation itself is the process of bargaining by the interested parties with a goal of achieving a mutually acceptable deal. Negotiations can be distributive, with the two or more parties pursuing their own agendas, and integrative, with the same parties looking to combine their agendas to create one that would be mutually beneficial. Cross-cultural negotiation is a desirable skill for both international and domestic managers of a global organization, considering the fact that in many such organizations the rotation of personnel from different countries is common practice.

The most important aspect of effective cross-cultural negotiations is avoiding culture-specific stereotyping. People with whom one negotiates are individuals, first and foremost, and respect and consideration must be shown at all times. At the same time, however, one must remember that what works as a strong negotiating tactic in one culture may not do so in another, and make adjustments accordingly.