Importance of The Management Decisions in Every Business

Introduction Management as a business concept refers to the â€Å"on going process that evaluates and controls the business and the industries in which the company operates†. This means that management is undertaken by both the government and the industries or firms operating in a given economy in order to ensure overall economic growth or success.Advertising We will write a custom essay sample on Importance of The Management Decisions in Every Business specifically for you for only $16.05 $11/page Learn More At the firm level, the managers must evaluate their ability to compete existing and potential competitors. They must also set achievable goals, given their resources and potentials. At the government level, management involves planning for economic development, regulation of industries and supporting emerging industries in order to ensure success. The management decisions made by both the government and individual firms have a great impact on international business strategy development. This paper is a reflection on the course on management with a focus on international business strategy. Learning Outcomes Management is an integral part of developing international business strategy since it determines the approaches used to make decisions, allocation of resources and the ability to achieve the organizational goals and objectives. In regard to the course, learning about the significance of globalization, integration of emerging markets and industrial distributions and their significance on firms was the most appealing aspect of the course. In particular, the knowledge I gained from the course can be explained as follows. To begin with, globalization has become a key aspect of business environment and will continue to influence critical decisions made by businesses. As the world economy develops, the decisions made by individuals are highly influenced by global trends. For example, as free trade and open market systems em erge, firms must focus on producing products that meet international standards in order to maintain their competitiveness.  One of the major factors that have contributed to globalization is the rapid integration of emerging markets. As countries integrate their markets in order to maximize their synergies, opportunities arise for individual firms. Such opportunities include a large market, access to cheap labor and raw materials as well as limited regulation. However, integration of markets is also associated with challenges such as high competition and unpredictable business environment. This means that firms must understand the dynamics of the international markets and evaluate their ability to compete in such markets effectively in order to succeed.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Globalization and market integration has led to the rapid growth of multinational corpora tions. The multinational corporations focus on operating in several countries. This helps them to achieve economies of scale, increase their market shares and profits. However, they also pose high competition especially to the small and medium sized firms at the domestic market. In many cases, the small and medium sized companies fail within five years of their inception due to their inability to compete in the market. Consequently, internationalization as an expansion strategy is being witnessed as an emerging trend among the small and medium sized firms. The strategies used by governments to ensure economic growth include industry cluster programs as well as direct financial and nonfinancial support to industries that make significant contributions to economic growth. Such support enables local firms to compete effectively. Key Trends in International Business Competition International business is characterized by intense competition as more and more forms join the international m arket. The presence of cut throat competition is a direct threat to the survival of businesses. Thus managers must be able to evaluate existing and potential competition. In response to the intense competition, most firms are focusing on internal reorganization as a strategy of creating competitive advantages. Internal reorganization does not only involve changing the management and leadership styles but also involves making significant changes to production methods. The aim of such reorganization is to reduce costs and improve product quality. Most firms are currently focusing on flatter organizational hierarchies in order to improve efficiency in regard to decision making and strategy development. The customers have become the focus of most business strategies since close relationships with clients helps in overcoming the competition. Basis of Competition Owing to the intense competition associated with most markets, firms have found it worthy to focus on a unique way of productio n that will increase their competitiveness. Besides, each firm normally chooses a strategy that determines the way it will act in the market with the aim of improving its competitiveness.Advertising We will write a custom essay sample on Importance of The Management Decisions in Every Business specifically for you for only $16.05 $11/page Learn More Firms normally adopt one or a combination of the following strategies at the international market. First, a firm can adopt a differentiation approach to guide its behavior in the market. In this case, the firm targets several market segments with differentiated products. The differentiation helps the firm to position itself as the best in the market. Second, a firm can adopt a cost based approach. This means that the firm will focus on reducing its production costs with the aim of reducing the price of the final product. By selling at a lower price, the firm will be able to penetrate the market and increase its market share and profitability. Finally, a focus or niche approach can be adopted to enhance the competitiveness of a firm. It involves concentrating on a particular segment of the market and satisfying the existing needs. These trends indicate that a manager must know the appropriate behavior to adopt for its firm in order to succeed. Information and Technology Having the right and accurate information concerning the market and the customers’ needs is a key determinant of the success of a business. Thus future managers need to know how to adopt organizational learning and appropriate technology in order to get the correct information to anchor their strategies. An effective organizational learning must promote continuous expansion of both the managers’ and their employees’ knowledge. New and better patterns of thinking should be encouraged in the process of strategy development. This will enable managers to develop strategies that are unique in the internat ional market. The manager should also encourage collective aspiration inline with the overall international strategy. Such shared inspirations help in achieving success. The use of advanced communication and information technology leverages organizational learning. Currently, the use of e-commerce is a common trend in international business. Most multinational corporations use ecommerce to execute activities such as marketing, sales, and customer service. The main advantage of technologies such as e-ecommerce is that they help in gathering first hand information about the market within a very short time and in a cost effective manner.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Regulation Regulation refers to the â€Å"administrative legislation that constitutes or constrains rights and allocates responsibilities†. Managers need to know the regulation trends in the markets in which their businesses are operating. This is due to the fact that regulation dictates the quality of products to be maintained, ownership of businesses, the rights of foreign and domestic firms as well as the level of competition. Despite the fact that integration of markets and formation of free trade agreements focus on liberalizing markets, regulation is still high in various industries at the international level. It is likely that high regulation will continue to influence international markets in the foreseeable future. Even though regulation focuses on promoting healthy competition and best practice in international business, it also constrains the expansion capabilities of firms. The emerging economies such as China and India for instance are using protectionist policie s to protect their domestic firms from intense competition from their foreign counterparts. Such policies represent entry barriers to foreign firms since they limit the abilities of the foreign companies to join international markets.  The concern about environmental degradation has also led to intense regulation of businesses especially in the manufacturing sector. Companies are not only expected to avoid polluting the environment but are also expected to participate in its conservation. This represents an increase in the overall costs of operating in a given market. In some industries such as aviation, firms are charged regular fees for the pollution resulting from their operation. Failure to adhere to the rules used to regulate the industries normally result into severe consequences such as fines. Thus managers must take into account the level of regulation associated with the markets they intend to join in order to develop effective strategies. Interpretation of the Environmen t Interpreting the business environment involves evaluating the significance of both internal and external factors affecting the performance of a business. Prior to interpreting the business environment, the firm must conduct an environmental analysis in order to understand the environmental factors accordingly. The most commonly used tools in the analysis include SWOT analysis, Porter’s five forces analysis and PESTEL analysis. The SWOT analysis focuses on evaluating the strength and weaknesses of the firm. It also helps in determining the threats and opportunities available to the firm. The Porter’s five forces analysis involves evaluating the competition associated with a particular market. The PESTEL analysis helps the firms to study the factors associated with the macro-environment and their effects on businesses. The results of the analysis obtained using the mentioned tools can be interpreted in the following criteria. Suitability The environment can be interpre ted as either suitable or unsuitable. The interpretation depends on whether the environmental factors make any economic sense or not. For example, availability of good transportation infrastructure is suitable for business success. Suitability is also determined by the economies of scale or economies of scope associated with the environmental factors. Finally, the environment will be considered suitable if the organization is capable of operating in it with the available resources. Feasibility Joining or operating in a given business environment is associated with some costs. For example, joining the international market through foreign direct investment requires the capital to establish new branches. The costs involved in operating in a given market are justified by the expected returns and the available resources. Thus operating in a given market will be considered feasible if the existing resources will be sufficient and the expected returns will cover the costs and other revenue needs of the organization. Acceptability This refers to the possible reactions of various stakeholders such as the workers, customers, community and the shareholders. Acceptability can be interpreted in terms of the expected returns to shareholders’ investment, the overall performance of the business and the risks associated with the environment. The expected returns are the benefits that will be available to various stakeholders as a result of operating in a particular business environment. For example, shareholders will accept an environment that will enable them to increase their wealth. The employees on the other hand will accept an environment that will guarantee them career progression and job satisfaction. The risks refer to the â€Å"financial and nonfinancial consequences associated with operating in a given business environment†. The financial risks for instance include the chances of incurring huge loses while nonfinancial risks include natural disasters su ch as floods which can adversely affect businesses. This discussion indicates that analyzing the business environment alone is not important if the results of the analysis are not interpreted correctly. Thus managers must know how to interpret the environment in which their businesses operate in order to make the right decisions. The Course and my Future Career This course will help me in my future career in the following ways. First, the concept of globalization and integration of markets will help me in developing strategic plans. Having understood the significance of globalization in terms of its merits and demerits in a business environment, I will be able to make the right decisions in regard to strategic planning. Second, the course will help me in evaluating business opportunities as well as developing effective strategies of exploiting such opportunities. By being able to evaluate and interpret the business environment correctly, I will be able to choose the right business o pportunities. Besides, I will be able to make the necessary trade-offs in regard to resource allocation in an attempt to achieve the business objectives using the available resources. Finally, the course will enable me to understand the role of government intervention in the economy through programs such as industry clusters. Thus I will be able to indentify the benefits and risks associated with the government’s role in the economy. Conclusion The above discussion indicates that development of international business strategies is influenced by the management decisions made by both the firms and the governments. The main futures that managers need to know in developing strategies in future include technological advances, competition, the basis of competition and regulation. Managers usually interpret the business environment in terms of its suitability, feasibility and acceptability. Correct interpretation of the business environment helps in making the right decisions. This course will thus help me to evaluate the business environment and develop effective strategies. References Akoorie, M., Scott-kennel, J. (2005). International business strategy: a new Zealand perspective. New York: Pearsons. Chen, X. (2009). State intervention and business group performance in China. New York: ProQuest LLC. Choi, H., Clarke, J., Ferris, S. (2009). The effects of regulation on industry structure and trade generation in the US security industry. Journal of Banking and Finance,33(8), 1434-1445. Diego, Q., Claver, E. (2009). Types of diversification and firm resources: new emperical evidence from the Spanish tourism industry. International Journal of Tourism Reserach, 23(1), 35-46. Disney, R., Haskel, J. (2003). Restructuring and productivity growth in UK manufacturing. Economic Journal, 113(489), 666-694. Filip, A. (2009). the effect of globalization in union bargaining and price-cost margins of firms. Review of World Economics, 145(1), 13-36. Hargrous, k., Smith, M. (2008). The advanateg of nations. London: Earth-Scan. Hunter, J. (2010). Determinats of business success under hypocapital. Journal of Business Research, 56(2), 113-120. Kahai, S., Simmars, W. (2005). The impact of globalization on income inequalities. Global Business and Economic Review, 7(1), 1-15. Kent, G. (2009). The importance of internal integration for a successful external integration of the supply chain. Business Logistics in Modern Management, 9(1) , 45-54. Lee, K., Olekalis, N. (2010). Nowcasting bsuioness cycle dataing and the interpretation of new information when real time data are available. Economics Review, 10(1), 17-23. Machkova, H. (2005). Actual trends in international marketing. Journal of Marketing Management, 20(2), 47-70. Upmann, T., Stahler, F. (2008). Market entry regulation. Review of International Economics, 16(4), 611-626. Wright, R. (2000). Trends in international business research. Journal of International Business Studies, 1(1), 109-123. Xie, W .-J., Gu, G.-F., Zhou, W.-X. (2010). The growth of primary industry and the population of China’s counties. Statistical Mechanics and its Applied, 389(18), 3876-3882. This essay on Importance of The Management Decisions in Every Business was written and submitted by user Harmony J. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.