MGF Week 1: Contrast IB & IM (example & apply example (Procter…
MGF Week 1: Contrast IB & IM
International business is all about how to expand and mange business overseas, where as international mangement is much more specialised and focuses on how to manage people across internatinal borders
International businesses focuses on the marcro aspects of business such as expansion phases, politicical, economic and legal issues whereas international management is more specialised & focusese on how to manage foreign opporunties & issues that affect people working in international contexts
IM - Concerned with managing foreign operations effectively, org issues that affect how people interact with each other, how an organisation works & how relationships are developed
expanding internationally is challenging & IM & IB focus on different aspects of an orgs international expansion
IB - macro, economics of trade, finance, regulations
and foreign business relations, economic trade blocs and investment
One cannot exist without the other and they are both connected but their focus is different aspects on international business.
Firms looking to expand overseas often focus on IB issues but fail to adequately address IM issues because issues such as how relationships will be developed, what are appropriate negotiation tactics, what are the particular tastes of the market, are less contrete and difficult to comprehend & understand.
however all successful international expansions must consider both IB & IM issues
IB factors are importatnt for ensuring the market has potential and the organisation has the resources to expand but IM improves the changes that operations will be successful and expansion will not fail due to cultural and national contextual differences
example & apply example
Procter & Gamble
P&G uses IM to successfully expand into 80 countries, they not only consider IB such as economies, markets, expansion strategies but they also factor in IM issues such as how employees will interaction.
P&G also focussed on IM issues during this merger as cultural differences between US P&G and French Gillette were vast and highly affected how managers & employees worked together. For example, P&G went to great measures to create 'de-categorisation' between staff and worked tirelessly to lessen the effort of in group & out group bias'. they did this by intergreating teams of both American and French employees, forcing them to peronsalise their interactions and focus on created specific, shared goals. This is an example of an IM issue that P&G tackled
hen contact occurs in a situation like an acquisition and in-groups and out-groups form, members of the in-group have a tendency to homogenize members of the out-group, . To overcome this, leaders may structure contact situations so that members of the in-group and out-group must treat one another as individuals. P&G leadership took great pains to create integration teams composed of both groups who must work on shared tasks, thus forcing them to personalize their interactions and focus on specific, shared goals.
Before expanding their activities in the French market, P&G merged with French razor company Gillette. This was done as both MNCs had similar brands, organisational structures and target markets. These issues are all IB issues as they cover large macro issues such as how to gain access & service the market & identifying key players and how to engage them to help gain access to the market.
this shows the interrelated to distrinctly differnt relationship between IM & IB. Focus on IB issues allowed P&G to select & find a company to merge with while IM issues allowed this partnership to go smoothly and ensure operations were successful.