International Business Management summary
Handbook organization and management (uitgebreide samenvatting)
Cijfer: 7.8
Cijfer presentatie: 8.0
Aantal bladzijdes: 46
Hoofdstukken: 1 t/m 8
Taal: Engels (VS Engels & VK Engels)
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,Summary International Business Management
Chapter 1 (environmental influences)
1.1 Introduction
Organizations are part of society, of daily life. Human society can be seen as the environment in which
organizations function. An organizations environment consists of parties or stakeholders like buyers,
suppliers, competitors, and financiers, they all have an influence on the company. Influence of
stakeholders are for example; inspection of the product or service and placing demands (pricing,
environmentally friendly production and packaging, good quality materials and quick delivery.
Organizations can also have an influence on the stakeholders. For example; advertising campaigns,
supplying information, providing advice, products, and services, and maintaining direct contact with the
stakeholders. An organization can be affected by environmental influences over which it does not have
a significant control over but are if high significance to the market.
Environmental factors:
Demographic factors
Environmental factors
Social factors
Technological factors
Economic factors
Political factors
Harmonization:
Directing an organization by considering the influence of its surroundings.
The most significant direct influence on organizations is exerted by stakeholders and surroundings.
- Buyers
- Suppliers
- Finance providers
- Competitors
- Government and local authorities
- Special Interest Groups (Greenpeace and PETA)
- Employees
- Media
Buyers ~consumers~client:
One of the most important stakeholders, because they demand products and services. Organizations
exist because they can satisfy the demands of the buyers. Consumers demands often change and
organizations must take this into account when determining the composition and features of their
product range. Clients have an influence on which new products will come to the market. Customers
have a critical influence on the company, because they decide if your product is old news or not.
Suppliers:
As a buyer, an organization imposes demands on its suppliers, with respect to quality, price level and
delivery time. An organization’s own products and services are after all, dependent on these aspects.
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,The choice of suppliers has changed in recent years due for example to an increase in international
competition. In the past there was a preference for local suppliers, but now the recurring trend is for
businesses to search for suppliers across national borders. Buyers (in B2B) now want to reduce their
stock (inventory) held, and demand ‘’just-in-time’’ delivery from their suppliers.
Competitors:
Competitors determine the amount of flexibility organizations have with respect to product features,
pricing, quality, distribution channels, R&D activities, advertising budgets and more. It is therefore of
vital importance to monitor the activities of major competitors and to analyze their relative market
position.
Capital providers ~ finance providers ~ financiers:
Organizations must maintain good relationships with financiers such as government, financial
institutions (banks) and shareholders. Organizations are often dependent on finance to maintain its
activities, expand operations and sometimes even remain its existing form.
Employees:
Most important asset and can be seen as a critical success factor. Nowadays highly trained, liberated
and more individualistic than their predecessors. Play a great role in the product and organizational
innovations, as well as in quality improvement. Employees influence the organizations choice of
direction, as well as its strategies in relation to social responsibility and social policy.
Special interest groups:
Parties that focus on the interest of a particular group of people. Many of these group exists and
include employees and employer federations (trade union or confederation), consumer organizations,
organizations involved in corporate social responsibility, environmental activists (Greenpeace), and
other organizations targeting specific subjects (refugee relief or illness support groups).
Media:
Includes the internet, newspapers, magazines, television, and radio. Plays a very important role in this
current information era. Can have a big influence on public opinion. This had led to many
organizations setting up PR departments which work closely with the media. Ways the media can
influence the organization; withholding funding (financiers), halting deliveries (suppliers), boycotting
(customers), other organizations in the market promoting their activities (competitors), placing the
organization in a very negative light (media), or investigating industrial action such as a strike
(employees).
The environment is now seen as one of the main strategic fields of interest during the coming years.
The environmental challenge for organizations has three dimensions:
1. Cleaning up current activities
2. Utilizing new opportunities
3. Working on a sustainable future
Government authorities use their political power and responsibilities to try to steer the economy in a
favorable direction. For example, governments influence price levels, the distribution of income, the
job market, the balance of payments and therefore the economic growth.
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, Forms of economic integration:
1. Free Trade Zone:
Mutual trade agreements are entered into only by those countries that wish to participate. Each
country determines their own import tariffs for products that are imported from outside the free trade
zone. As a result, the trade policy for members is not harmonized. Certifications of origin is therefore
necessary to prevent products being imported via the country with the lowest import tariffs. An
example of a free trade zone is NAFTA (North America Free Trade Agreement).
2. Common market:
Based on a customs union, it removes the barriers in the field of production factors.
3. Customs Union:
Here, a common trade policy is adopted. The revenue from import duty is divided between member
states using an agreed formula.
4. Economic Union:
The monetary policy and financial government politics are also in harmony. This step requires that
central institutions be implemented.
5. Complete political and economic Union:
Independent states or countries merge completely. For example, the United States of America.
Within the EU, there is common internal market. This is based on four economic freedoms:
1. Freedom of movement of goods
2. Freedom of movement of services
3. Freedom of movement of capital
4. Freedom of movement of people
Forms of obstruction:
1. Physical obstruction:
Customs controls with their associated paperwork as well as delays at borders.
2. Technical obstruction:
Country-specific differences in production regulations, commercial law and regulations designed to
protect elements within the government procurement sector.
3. Fiscal obstruction:
The differences in sales tax (VAT) rates and excise taxes that result in a demand for inspection and
clearance at borders.
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