International business is a complex field where business managers are required to coordinate input from multiple teams from several different locations around the world. Although there is not a single universally accepted definition of a “global business manager”, Christopher Bartlett, an authority in global business management, proposes one of the most commonly adopted models. Bartlett’s model defends that there is “no such thing” as a general, all-encompassing global business manager. Rather, Bartlett divided the role of Global Manager into several distinct manager types that, together, compose the global business management team.
According to Bartlett, business managers, country managers and functional managers provide the majority of the direction while senior executives coordinate the entire management team. Together, these four types of managers overview strategy, country profiling, local regulation, resource management, worker performance and overall production. Bartlett’s model of global management exposes the first challenge of global management: a high level of coordination.
Another challenge of international business is balancing market expectations of multiple countries at once. Every national business operation needs to understand its domestic demand for current and upcoming products. For each new country a business enters, an additional set of demands and market conditions need be considered, increasing the complexity of managing the business at the global level.
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We can start seeing why operating in multiple national markets is a daunting task. According to Professor Tomas Hult, Director of the International Business Center in the Eli Broad College of Business at Michigan State University, there are three keys for a successful global business strategy. The first key is to define acore business strategy for each strategic business unit in a company.
The second key is to adapt the core business strategy to each national market, to internationalize the core strategy. It is also important to take in consideration that the internationalization process typically results in local business strategies with large differences between countries. These differences affect the business’ cost position, product quality and competitive differentials at the global level.
The third key to a successful global business strategy is to counteract the weaknesses created by the internationalization of the core strategy by incorporating the original unique characteristics of the business into each local national strategy. This process can be called “globalization”. A global business should balance global consistency (globalization) with local responsiveness (internationalization). While global consistency can significantly increase leverage and competitive advantage for the firm at the global level, local responsiveness (internationalization) can improve competitiveness at the local level. Therefore, it is crucial to avoid “overglobalizing” or “underglobalizing”.
Although defining and implementing a winning global strategy can be a challenging task, the benefits of a successful global business strategy clearly outweigh the effort. One important benefit is cost reduction. A global business can assign different tasks to the national teams that are the most efficient in accomplishing each task. If each team focuses on the area for which it is most suited, overall efficiency rises and costs in terms of time are reduced.
A second important benefit of implementing a successful global strategy is the reduction of product development time. When a product is designed by several specialized teams, each working at their maximum capacity, the overall time-to-market for a particular product can be significantly reduced.
A third significant benefit is the creative input from different international teams. Releasing a product into several different national markets without understanding the culture and demand of each national market can lead to disappointing sales results. By incorporating the input of international teams, a global product may be developed to fulfill customer expectations in multiple countries.
Creating and executing a global business strategy may be an intricate enterprise, but with the increasing payoff for companies expanding their business to international markets, the effort can be worthwhile. A skilled global management team can effectively coordinate the input from several different national teams which can result in significant gains by successfully expanding the business to the global level.