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...