Thursday, May 18, 2017

Global Awareness Fosters International Expansion

Companies that desire to compete on a global scale should learn to develop intellectual abilities beyond the capacities of most domestic businesses. Managers with global knowledge are a highly sought after commodity during this expansion process. American employees often lack international exposure due to limited travel and overseas assignments. Without this knowledge recruiting managers sometimes find that they must rely on immigrants and new comers to society to support their international operations. Consider research on what pressures are likely to push companies to expand internationally in the Journal of International Business Studies (Dastidar, 2009):

1. Companies with high technology and/or marketing based resources.

2. Small home markets with higher production capacity.

3. Managers with global knowledge and experience that can accelerate the process.

Global awareness and knowledge are necessary components to competitiveness and if businesses forgo learning or recruiting this knowledge they may not be aware of international opportunities or how to capitalize on them appropriately. Poor attempts to further overseas expansion investments could waste precious resources.

While businesses need technology, marketing, and higher production capacity to expand overseas they won't be able to effectively do it without proper guidance. Having the necessary resources and capacities is one thing but knowing how to do it is another. However, the major intellectual capital component is employees and managers with international business knowledge. They are the workers that experienced global operations, understand different market segments, and have a systematic way of handling far reaching operations.

Protiti Dastidar, “International Corporate Diversification and Performance: Does Firm Self-Selection Matter?” Journal of International Business Studies 40, no. 1 (2009), pp. 71–85.

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