Benefits of Studying International Business Management
Multinational enterprises (MNEs) have been around since the 1600s, and their numbers have exploded in recent times. Whether your entrepreneurial spirit is pushing you to take your business idea to the global market, or you’re excited by the notion of joining a leading multinational like Shell or Unilever, studying international business management is a necessary starting point.
Bright young people are also increasingly looking to join the ranks of international business consultancies such as McKinsey, Bain & Co. or the Boston Consulting Group (BCG). What better qualification to gain a foothold in these companies than a degree in international business management?
Another primary attraction of studying international business management is the pull of foreign markets and cultures, together with the opportunities to travel and live in a new environment.
Drivers of International Business Growth
An OECD study estimates that roughly 7,000 MNEs were counted globally in the 1970s. By 2008 this number had increased to 82,000, with 230,000 foreign affiliates counted in the OECD Activities of Multinational Enterprises database in 2014.
There are a number of self-evident reasons for this spread of global business interest. Not least of these is increased trade and investment liberalization following the Second World War, and rapid progress in Information and Communications Technology (ICT).
Other prominent drivers of the growth in international business include access to large and expanding consumer markets, access to natural resources (e.g., platinum-group metals from South Africa) or specific technologies or knowledge (e.g., computer chips and semiconductors from Taiwan, China and South Korea). Specific financial and tax legislation environments may also drive international business decisions to locate in certain countries.
“Companies seek to optimize their production processes by locating various stages across different sites according to the most optimal location factors across countries,” states the OECD report. This quotation summarizes in a nutshell the challenge —and excitement — of studying international business management.
A Global Approach
The traditional MBA program provides a solid understanding of the core business functions: marketing, finance, strategy, human resources and supply chain management. Most MBA programs also offer specializations in these fields.
Where the study of international business management sets itself apart from the traditional MBA is in its focus on a globally strategic approach. The term “globality” was recognized by the World Economic Forum at its meeting in 1999. What does this mean?
Global Operating Environment
Countries have unique cultures that shape their markets. A product or service designed for one market may be entirely wrong for another, and the marketing strategy adopted in one market may be inappropriate in another. Successful marketing campaigns and slogans in the United States are littered with failed campaigns that have been “lost in translation” in other countries.
Culture and language differences are only a small – albeit important – part of operating globally. While the U.S. has tended to dominate global trade for decades, it would be a mistake to assume that they still set the tone for international business practice, or that this will always be the case due to the increasing influence of countries such as China and India.
Let’s look at some of the other challenges of international business management.
Influence of Global Events
We have all become used to the reality of so many international events influencing our local circumstances. Whether it be the exchange rate against the dollar, euro or yen, the price of Brent crude, or the fluctuating prices and supply of foodstuffs, none of us is immune to the impact of what is happening in the rest of the world.
A knowledge and understanding of how these influences can be managed in business is a crucial element of the study of international business.
Impact of Technology
As much as local markets have been impacted by global events, the digital transformation revolution has changed the way companies operate. Online transactions and e-commerce have simultaneously expanded market opportunities and shrunk the world to the point that we can truly talk about the “global village”.
The study of international business management recognizes these trends, and any business that does not take advantage of the interconnectivity enabled by digital transformation is bound to fade into obscurity. This applies as much to the SME sector as it does to large MNEs.
Workforce Diversity
Companies are recognizing that a nationally diverse workforce brings different perspectives to the way the business operates. Diversity encourages new ways of looking at opportunities. A company like Rackspace Technology, for example, makes this a part of their commitment to “diversity, inclusion and belonging (DIB)”, for good reason:
“Companies who hire employees with diverse backgrounds and unique perspectives see increased performance and better business results,” says Amanda Halbritter, Senior Global Content Marketer, Rackspace Technology.
A degree in international business management provides the knowledge and skills to think from diverse perspectives.
Final Thoughts
Globalization and the digital transformation of businesses have created new demands on recruiters to seek out candidates with evidence of an international perspective. An international business management qualification may no longer be a “nice to have”, but rather a sought-after requirement.
