Introduction to Management

Chapter Summary

The study of international management is gaining importance as firms expand their operations to various countries. International management deals with the processes of planning, organizing, staffing, leading and controlling organizations engaged in international business. Companies go international for various reasons: gain access to new markets, to increase profits, or to acquire products for the home market. These are called aggressive reasons for going international.

Companies also go international for defensive reasons: to protect domestic markets, to acquire technology, and to find politically stable bases. The reasons for entering international markets can also vary with the time, the type of industry and the nationality of the company. Like domestic enterprises, international enterprises give attention to the managerial functions of planning, organizing, staffing, leading and controlling.

However, there is considerable difference in the way these functions are carried out in these two types of enterprises. Japanese management practices have recently increased in importance across companies and cultures. Some Japanese management practices, like continuous training, and group work are believed to have contributed to the success of Japanese companies.

Willian Ouchi outlined Theory Z, which combines the traits of typical American and Japanese companies. His work showed that American organizations can benefit from thoughtful incorporation of Japanese management practices. Firms that operate across international boundaries have several advantages over firms that remain within national borders. But multinational firms also face many risks and challenges in their host countries.