Journal of Applied Business and Economics
Global Business Management: Current Trends and Practices
Michael Wisma Saint Joseph College of Indiana
Today, problems associated with global business management have been identified as factors that negatively impact the performance and productivity of multinational corporations and in turn, adversely affect regional and national economic growth. While factors related to logistics and distribution are important when selecting international suppliers, they are inadequate when considered in isolation of internal and external forces. This paper engages in a comprehensive and systematic analysis of global supply chain management, particularly in terms of micro and macro cultural considerations. INTRODUCTION Organizations are facing increased global competition, economic uncertainties, and changing markets. Technology is changing the way we conduct business and manage information. Outsourcing of significant functions within businesses and organizations complicates the landscape of supplier relations. Suppliers and vendor partners may be located in the same city, region or country. But they are just as likely to be located halfway around the world, adding new challenges to business management. The growth of international strategic partnerships has risen exponentially in the last twenty years. Competing in a global marketplace has made it increasingly important to align business strategies with a risk management strategy that includes strengthening global supply chains and vendor partnerships. As Wiley points out, “In the near future, it is supply chains that will compete, not companies” (Wiley, 2004). Global supply chains must be carefully selected and monitored to ensure the competitive edge required to achieve success in the global market place. Typically, the first order of business has been logistics and operations. Businesses identify viable suppliers, hospitable host countries, lucrative markets, and amenable vendor partners worldwide. Then they set about drawing up agreements and operationalizing the new vendor relationships. Then the realities of operating a global business hit home and businesses scramble to understand what went wrong. I believe that part of what went wrong is that businesses missed the big picture. They become so focused on the bottom line – keeping costs down and rushing products to the consumer – that they fail to consider other factors that may directly impact their operations. Risk management
strategies must include plans for dealing with an array of new threats and concerns - terrorism; cyber crime; piracy; potential political and economic instability around the globe; ethnic, religious and cultural differences; compatibility and interoperability of technological systems; global communications and transportation. Added to this list are concerns about financial viability, sustainability, compliance with national and international laws, and information security. A contextual model is presented below. And because it forms the foundation of human civilization, communication and trade, I begin this discussion with the issue of culture. CONTEXTUAL MODEL Factors relating to logistics and distribution are often the only critical factors considered when multinational enterprises seek to establish or broaden international supply chains. Far less considered are contextual factors that may help organizations better understand potential vendors and better select vendor partners, thereby mitigating potential vendor-related problems. Figure 1 presents a contextual model of the major factors I believe are critical to successful supply chain and risk management. These are culture (external and internal), corporate governance, politics and law, and technology. While logistical and distribution concerns as well as issues of infrastructure and presence tend to drive many international business decisions, it is equally important that organizations consider these...
References: Ball, Roger L. (February, 2005). “Strategic sourcing – A recipe for strategic excellence,” Government Procurement. Blij H. J. de and Muller P. (2002). Concepts and religion in geography. New York: Wiley. Booz Allen Hamilton and Weil Gotshal and Manges (2004), “Redefining the Corporate Governance Agenda: From Risk Management to Enterprise Resilience”, Strategy+Business. Braithwaite J. and Drahos P. (2000). Global business regulation. Cambridge, UK: Cambridge University Press. Collett P. (1972). “Training Englishmen in the nonverbal cues of Arabs,” International Journal of Psychology, vol 6, 209-15. Drickhamer D. (2004). “Tick tock: IW/MPI census of manufacturers show challenges, reality, and yes, even optimism,” Industry Week, 1/1/2004. Duffy R. (May, 2003). “The future of purchasing and supply: where we are headed,” Purchasing Today. Duffy R. (November, 2004). “New measures surface, take the initiative: continuing coverage of the trends shaping the profession,” Purchasing Today. Duvall, Mel (January 24, 2004). “Start-up outsourcer offers one-touch service,” Inter@ctive Week, p. 31.
Engardio, Pete, Einhorn, Bruce, and Kripalani, Manjeet (March 21, 2005). “Outsourcing innovation,” Business week, p. 84 - 92. Faisal, Hoque (2002) The alignment effect, New Jersey, Prentice Hall, p. 107 - 109. Ferraro G. P. (1998). The Cultural dimension of international business. Upper Saddle River, New Jersey: Prentice Hall. Friedman T. L. (2000). The Lexus and the olive tree. New York: Anchor Books. Friedman T. L. (2002). Longitudes and Attitudes. New York: Anchor Books. Frook, John Evan and Karpinski, Richard (January 11, 1999). “Poised for critical mass,” InternetWeek. Hartman, Laura P. (2005), Perspectives in Business Ethics. Dubuque, Iowa: McGraw-Hill. Hill, C.W.L. (2005). International business: competing in the global marketplace. Fifth Edition. New York: McGraw-Hill/Irwin. Hofstede G. (1980). Culture’s consequences: international differences in work-related values. Beverly Hills: Sage Publications. Huntington S. P. (1996) The Clash of civilizations: remaking of the world order. New York: Simon & Schuster. Jack, William G. (June 28, 2001), "Public Policy toward Non-Governmental Organizations in Developing Countries," World Bank Policy Research Working Paper No. 2639. http://ssrn.com/abstract=632707 Jackson B. and Winkler C. (2004). “Building the Advantaged Supply Network,” Strategy+Business, Booz Allen Hamilton, 9/3/2004. Kluckhoh F. and Stodtbeck F. L. (1961). Variations in Value Orientations. New York: Harper and Row. Mallor, Jane P., Barnes, A. James, Bowers, Thomas, and Langvardt, Arlen W. (2004) Business Law: The Ethical, Global and E-Commerce Environment, 12th edition, Dubudue, Iowa: McGraw-Hill. Maskus, Keith E. and Reichman, Jerome H. (June 2004), "The Globalization Of Private Knowledge Goods And The Privatization Of Global Public Goods", Journal of International Economic Law, Vol. 7, pp. 279-320, http://ssrn.com/abstract=692902
Moeller L., Egol M. and Martin K. (2004). “Smart customization: Profitable growth through tailored business streams, Strategy+Business, Booz Allen Hamilton p. 1-2 Naipaul V. S. (1990). “Our universal civilization” The 1990 Wriston Lecturer, the Manhattan Institute, New York Review of Books, October 30, 1990, p. 20). Open Compliance and Ethics Group (May 2004). Foundation guidelines: Brown book,. Panchak P. (2004). “Supplier partnerships provide a competitive edge,” Industry Week, 9/1/2004. Reich R. B. (1991). The work of nations, New York: A. A. Knopf. Sternberg, Elaine (2000). Just Business: Business Ethics in Action, 2nd edition, Oxford University Press. Whiteley, W. and England G. W. (2004). “Managerial values as a reflection of culture and the process of industrialization,” Academy of Management Journal, 20, 3, 1977, 439-453 in O. Shenkar and Y. Luo, International Business. Hoboken, NJ: John Wiley & Sons, Inc. Wiley J. (2004). “Supply chain strategies,” IndustryWeek.com. Retrieved August, 27, 2004 http://www.industryweek.com/currentarticles World Trade Organization Press Release, October 19, 2001.
Please join StudyMode to read the full document