International Management

What is the meaning of international management / international business?

International management / business is a field of study in management that focuses on international, multinational, global and transnational companies that are doing business among multiple countries. 

What topics are included in the field of international management?

Important topics of the International Management division at the Academy of Management include:
- "The cross-border management of operations, including multi-country, multi-unit, strategy formulation and implementation;
- Evolving organizational forms and management practices in cross-border business; the cross-border differential impact of cultural, social, economic, technological, political, and other institutional forces on strategies, organizational forms, and management practices; the international competitiveness of firms, industries, and nations;
- Comparative management studies involving two or more countries.”
(source: Academy of Management)

Strategy scholars interested in globalization and internationalization strategies typically study the drivers of internationalization; the choice of entry mode (e.g., exporting, subsidiary, wholly owned subsidiary, alliance, joint venture, licensing, foreign direct investment); the relative risks associated with entry strategies (e.g., operational risk, political risk, financial risk); the type of strategy to be adopted (e.g., international, multinational, multidomestic, transnational or global strategy, etc.) in order to manage the global-local dilemma efficiently; Global sourcing strategies and value-chain configuration; and the performance of multi-national firms.

Frameworks for international management / global strategic analysis

Managers who deal with globalization issues or are involved in the management of multinational operations across national boarders can usefully use the following frameworks:
- Pankaj Ghemawat’s CAGE framework helps manage the four types of distances (i.e., Cultural, Administrative, Geographic and Economic) that are associated with internationalization (see, Pankaj Ghemawat CAGE distance analysis indicator);
- Michael Porter’s Diamond framework is an economic model that explains the competitive advantage of a nation in global competition (see Michael Porter’s book titled The Competitive Advantage of Nations)

- George Yip has developed a framework to understand an industry’s degree of global competition. The framework includes four drivers of globalization: government influence or government globalization drivers (e.g., tariff and not tariff barriers, trade policies), global competition or competitive globalization drivers, cost advantages or cost globalization drivers (e.g., scale economies), and market globalization drivers.

Industries that score low on these drivers are “domestic” industries, whereas industries that score high on these drivers are “global” industries (e.g., computers, airlines).

Bartlett and Ghoshal’s model of the multinational is another famous international management framework, which offers a typology of Multinational companies (MNC).

Bartlett and Ghoshal distinguish between the “Classic multi-domestic” MNC (the European model); “Modified multi-domestic” MNC (the US model); and “Global” or Japanese MNC.