Benefits and Challenges of Global Company Operations
Managing the business organization is considered as challenge for the managers. There has been gradual shift and changes in the nature of task with the rapid pace of changing economic activity. Moreover, there were also several opportunities for the managers because of continuous advancement in communication and information technology. This was made possible because of international co-ordination within the global companies (Laudon & Laudon, 2016). Starting a new business venture in an organization is also considered exciting and the managers must be ready to face multiple challenges in the operation of a business entity. It is also the duty and responsibility of the managers to consider the different political, economic and social environment of the particular region in which the company will operate. As there is difference in the time zone, customs and languages, currency of different countries, there are several challenges faced by the mangers as well as the employers in the organization. It is also the duty of the manager to carry out intensive research on the particular country where it wants to operate its business (Marta et al., 2013).
There is no such organizational model which is beneficial for all the companies who are trying to operate in the global environment. The large scale companies enjoys economic leverage and they have the capacity to invest in the shared infrastructural processes which will help them to carry out the research and developmental activities. Moreover, the economies of scale in these services are also considered significant and important. There are many business organizations who outsource to other companies and take the support and help of these organization in carrying out their business operations (Peng, 2016). This will help the global companies to grow diverse and bigger and it also involves the complexity costs. A global company can also benefit from the geographically diverse business portfolio that helps in the provision of natural hedge against the risk taken by the country, volatility of local growth and currency risk. On the other hand, there are also multiple opportunities of these global companies so that can handle the risks and provide global support to the organization (Steers & Nardon, 2014). It can be said that capturing the different benefits and mitigating the different types of challenges that are associated with the development of global companies acts as a new way for the operation of the organization.
Communication is considered as an important barrier which hinders the successful operation of the business entity and is also considered as a challenge for the managers. The managers must have the idea of local language and they must have the ability to instruct other team members in the organization. In a global organization, the team members may be separated by geography and they do have the ability of physical interaction with each other. In such circumstances, the manager must have the ability to interact with each members in the organization (Grant, 2016). Language barriers may be of different forms. In a global team, there might be team member who speaks different languages and there may be regional difference in their pitch, meaning, semantics and accents. Moreover, some people might also have problems in communication, syllable stress and they might be divided by regional dialects. The problem of language barrier must be eliminated if the mangers wants the sales volume of the company to increase with the passage of time. On the other hand, the managers might also face problem to cope up with the different technologies which are used in the company. It is often seen that the mangers might not be technical savvy and thus they had to rely to other members in the company (Trevino & Nelson, 2016).
Communication and Language Barriers
The managers often face problem in dealing with the foreign currencies where they need to have sufficient knowledge of the conversion rates. This will help the managers to avoid the problem of calculation. It is important for the managers to have proper knowledge of the accounting tools which will help them in calculating the conversion or the exchange rate in the organization (Moran Abramson & Moran, 2014). Moreover, the managers must also have the ability to speak up and encourage the team members who are self conscious about their individual ascents. The managers must also have the ability to encourage the team members so that they can compete with other firm. Ina global team, it becomes difficult for the managers to handle the selection and recruitment process. The foreign candidates may not be willing for the particular job post and it is the duty of the managers to handle these task. The mangers might also face problem in dealing with candidates of unfamiliar culture and thus it becomes difficult for him to handle different situations (Keller, 2017).
A manager must also have knowledge of the government rules and regulations for the operation of the business organization. Various government control measures, law standards, safety standards differ according to different locations and it becomes difficult for the mangers to handle these situations (Luthans & Doh, 2015). Moreover, it also becomes difficult for the manager to communicate the results or the findings of any new process or product which was launched by the company successfully. The laws and rules of different countries varies and the manager might also face problem in knowing the political situation of any country. The manager or the leader of any company must have proper knowledge and thus must be capable to face the challenges. It is also the responsibility of the managers to find out appropriate ways of overcoming these challenges (Heizer, 2016).
In certain cases, it is found that the managers might create common mistakes because it becomes difficult to adopt to different cultural norms. There are certain differences between the culture of a particular company and the culture of a particular community. It becomes challenging to adopt both these cultures at the same time. Moreover, when the managers or the leader imparts training in the organization, it becomes important to check and understand the expectations of different cultures. In a global organization, the manager must also have the capacity to foster on different methods of inquiry in the organization (Keohane & Olmstead, 2016). It is also the duty of the manager to deal with the performance problems in the organization and thus try to adopt better recruitment and selection process for the employees in the organization. The managers in an organization must also try to give constructive feedback to the employees and this will help the employees to improve their behavior and work towards the developmental goals in the organization (Luthans & Doh, 2015). It has been found that the managers face problem in dealing with different dilemmas that are associated with performance level of the employees. A manager must be capable to distinguish between work life and personal conflict in an organization. It is also the duty of the manager to solve or clear any personal conflict which exists among the employees in an organization (Ferraro & Briody, 2017).
Foreign Currency Exchange Rates and Technical Savvy
In certain organization, acquisition and merger plays an important role in the organization. A manager must have the capacity to deal with these situations and thus handle the problem effectively. It is also the duty of the manager to encourage the employees for open communication and participative decisions in the organization. Moreover, time management also plays an important role and thus helps in the development of managerial effectiveness. Some of the important challenges which are faced by the managers in an organization are guiding the change, development of the employees, effective capacity of leading the team, managerial effectiveness, guiding change in the organization and manage the stakeholders in an origination (Geppert Matten & Williams, 2016). It is the duty of the manager to work effectively and smartly which will help him to reach the desired objectives in an organization. The managers must also try to motivate the employees who are not satisfied with their job role. It is the responsibility of the managers to help the employees to work in a much better and smarter way. A manager should have the capacity to handle a big team or sub team which are operating in different locations in an organization. With the help of technologies or social sites, the manager can develop personal relationships with the employees and thus this can also help to improve the performance of the members (Deresky, 2017).
According to a newspaper report published in “CNW Report” on August 24, 2017 it was highlighted that Australia’s biggest and oldest airline, Qantas ahs incurred financial loss of $251 mm in 2011. This was regarded as a huge loss to the company after the privatization of Qantas. Although the company had good record in the domestic market of Australia, yet it suffered from a loss of $450 m internationally. The airline tried to seek partnership with Emirates, a Dubai based company. The biggest challenge for the company during those years was to gain profitability. The soaring price of fuel, global economic downturn and warfare with the unions were the three important causes for which the company suffered problem in international expansion. Moreover, the leaders and the managers of Qantas are also worried about the global competition from its competitors in the same route and the rising price of fuel. China Southern Airlines which is one of the biggest carrier of Chinese airlines and also a competitor of Qantas Airways. Moreover, China Southern airlines has increased its services in different locations of Australia and it has tried to connect different parts of the country. China Southern Airlines has also set up its headquarter in Sydney which was the first overseas official setup of the company. Moreover, the number of Chinese tourist visiting Australia has also increased and Qantas has to face difficulty in its operation in such a situation. It can be said that the mainline brand of Qantas has become overweighed and this is posing challenges and increasing the vulnerable competition between the airline industry (CNW Money, 2017).
Government Regulations and Multicultural Performance Issues
Qantas Airline has also faced industrial dispute in 2010 when the airlines and Transport Workers Union has faced industrial bargaining. Moreover, the TWU employees also demanded that the airlines must try to improve its working conditions and provide better wages to the employees. This has caused restricting in the entire process and thus it led to severe reforms within the airline industry. There was also downsizing of the employees and it led to chaos among the workers in the organization. This led to an annual loss of $70 million to Qantas Airways. Moreover, the natural disaster in 2010 has also affected the flight routes and thus it affected the profitability of Qantas Airways. The manager of Qantas airways has highlighted that the competitive environment and the playing field was tough for airlines industry. Moreover, these factors needs to be acknowledged by the Australian Government and the other sections in the travel and tourism industry. The government must also provide support, ownership and intervention to Qantas Airways. Qantas is the only airlines in Australia who are recruiting a large section of the people and thus improving increasing the home grown employment level in the airline industry. The airlines is also providing support to charity, community and other sporting organizations in Australia and also supporting the economy in times of national crisis
Thus, it is necessary for the managers to familiarize with the organizational and thus try to reduce conflict among the employees. It is also important that the managers must try to maintain cordial and optimistic relation with the members in the organization. They must listen to the needs of the employees and frame the rules accordingly which will keep the employees motivated and thus help in their work culture. It is found that workload seems to be challenging for the managers and it becomes difficult to handle such situation. Therefore, the manager must set some goals and he/she must be proactive while setting those goals. It is also the responsibility of the manager to maximize unique values for the development of the organization. A manager must understand the demand of the task and work accordingly to achieve it. Therefore, it is the responsibility of the leader to mingle with the employees and build good relationship and network with the employees.
References
CNW Money. (2017). money.cnn.com. Retrieved 13 December 2017, from https://money.cnn.com/2017/08/24/news/companies/qantas-airbus-boeing-sydney-new-york/index.html
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Grant, R. M. (2016). Contemporary Strategy Analysis Text Only. John Wiley & Sons.
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Keller, K. L. (2017). Managing the growth tradeoff: Challenges and opportunities in luxury branding. In Advances in Luxury Brand Management (pp. 179-198). Palgrave Macmillan, Cham.
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