Discussion Questions on International Business Strategies - Management Paper Example

A.1. Theory concerning elements of international management

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The study of international management is quickly gaining ground especially because firms in the international scenes are seeking to expand their operations and establish their presence in various countries. Ideally, International management has everything to do with planning, organizing, leading and controlling roles. It can be argued that the reason for the increase in the establishment of global companies in foreign countries is out of the need to venture into new markets, to boost the profits level as well as the need to acquire commodities for the home market. Even with this in mind, it is important to understand the premises with which international management operates. In other words, it is indispensable to understand the theories that govern the operation of business internationally. But to do so, it is necessary to set up the basic elements of strategic planning in international management including environmental scanning, strategic planning goals as well as internal resource analysis.

Environmental scanning involves the accurate forecasting of trends that relate to external changes in geographic areas where a firm is considering to set up operations especially in the international market scenes. Ideally, it goes beyond acquiring and using information about events, trends as well as relationships in the organization external environment. Scanning the environment helps the management to plan effectively on the future course of action (Aguilar, 1967, Choo & Auster, 1993). As Hooter considers set up a chain restaurant in Dubai, it out to do an environmental scanning by first scrutinize the environment they to operate in and get a clear understanding of the external forces of change they are to face. It should also go beyond and identify the potential threats, opportunities, gains, competitive advantages, legislations as well as the culture and customs surrounding the organization. For example, most of the people in Dubai are Muslims and operating in such a market will require a scan believes, culture and customs. Ideally, Muslims believe in decent wearing especially when in public and do not allow any form of expression of affection in public. However, on the other side, the waitresses of Hooters restaurants are known of wearing skimpy shorts especially when during their normal operation of business. They will definitely face opposition and will fail to get customers especially because the large populace in Dubai see this as indecent Sutton, 1988).

While conducting an external analysis, three correlated environments ought to be considered and that is the immediate/industry environment, national environment as well as border socio-economic environment/ macro-environment. According to Hendeson (1998), the higher the vulnerability of the environment in which a firm is operating in, the higher is the likelihood that such an industry has a high number of competitors and the fiercer is the competition. Moreover, while examining the industry environment, there is need for an appraisal of the competitive structure of the organizations industry. In this case, Hooters should take a keen study of the nature, stage, dynamics and history of the restaurant industry in Dubai. When analyzing the national environment, the macro-environment especially the macro-economic, social, government, legal, technological and international factors should be taken into consideration. Lastly, Hooters should also analyze the external environment by taking a specialized look into the opportunities and threats expected while setting up restaurants in Dubai.

The internal resource analysis involves the evaluation of the organizations managerial, technical, material and financial strengths as well as weaknesses. Hooters should identify its key factor for success (KFS) in order to be in a position of competing with other enterprises in the industry. On the other hand, the element of strategic planning goals in international management involves the availing of products and services to customers in accordance with the plan of actions of a prospective firm. In the case of Hooters restaurant, it ought to come up with a decision on where to locate operations. Also, it should carry out entry and ownership strategies. Its management should also implement functional strategies in areas such as marketing, production and finance. With the knowledge of these elements, it is now possible to understand some of the theories that can be applied. Some of the theories that try to explain how these elements operate include, the internalization theory of the multinational enterprise, the resource dependence theory, Resource-based theory, Institutional theory as well as agency theory.

The resource-based theory is based on the notion that firms constitute a bundle of resources and capabilities. Resources in this case constitute of physical, financial, human as well as intangible assets. According Zajac and Westphal (2002), resources are not homogenous but rather, limited in mobility. However, organizations are always in a pursuit to exploit these valuable, rare, inimitable resources for strategic advantages which.

The institutional theory is yet another theory that explains the impact of an organizations environment as well as the cognitive, normative and regulative structures surrounding the firm. From the theory, structures that impact the actions, routines and cultures of the organization are responsible for defining legitimacy and constrain action (Meyer & Rowan, 1977). Furthermore, the theory focuses on how institutions are formed, how they pervade societies and industries as well as how the change with time. The theory is best known for its theoretical framework as opposed to its empirical contributions to strategic management.

Resource dependence theory posits that there is no firm whatsoever that can be in a position to secure the resources and capabilities required to survive without interacting with firm and individuals beyond their boundaries (Ahuja, 2000). As a matter of fact, firms seek to gain internal and external control of critical resources especially in a fast paced environment filled with uncertainties and whose chances of survival through adaptation to the environment is promising. To do so, firms engage in co-optition (a mix of cooperation and competition)

In international management, the agency theory is of great importance to apply. Essentially, this is because the theory is about goal incongruence between owners, managers, shareholders as well as the agents who are the employees (Fama & Jensen, 1983). They theory describes an organization is formed solely for the purpose of entering into contracts especially if it is efficiency in sharing risks and information and in line with the organizational objectives. According to (Eisenhardt, 1989), the boards of directors act as monitors hired by shareholders over executives.

A2.a Mission Statement

A.2.a. Mission statement. The mission of the firm is vital for the attainment of the corporate strategic goals. But to formulate the mission of the firm, there is need to identify the core competencies which entails channeling all the effort towards what it the organization is good at. The core competitive advantages of Hooters include:

Specialization: Hooters has a unique way of preparing its food and serving customers. From professional cooks to beautiful waiters and waitresses, the restaurant has all that is in place to compete favorably with the giants in the trade including competitors as Mistral, Big Chefs, kitchen6, Fountain Restaurant, Sloanes etcetera.

Experience: Since 1983, Hooters has been operation and since that time, it has attained much experience in the manner of conducting business. The restaurants is well aware of all the nitty-gritty pertaining of all the business practices as well as the law that should be followed and enforced.

Knowledge: Managing a chain of hotels really calls for an organization that is quite competent to do so since restaurant business can be susceptible to frauds. From the experience amassed overtime, Hooters has been in a position to gain knowledge on how to carry out errands, solve problems, treat customers, manage finances as well as give back to the society.

Ongoing training: Hooters restaurant holds workshops meant to enhance the skills, knowledge and experience of its staff. Additionally, it offers employment opportunities to young and aspiring cooks and waiters and before it absorbs them as employees, it ensures that it trains them and equips them with the necessary particulars required of all the members of Hooters.

Quality standards: Hooters has put in place measures that see to it that food safety, cleanliness as well as customer services are assured and adhered to. In this view, the mission of the organization is to provide an environment of employee growth and development with an aim of rendering unique and entertaining dining experience in a fun and casual atmosphere delivered by vivacious girls while making positive contribution to the community.

A2.b Opportunities and threats

The International Environment for businesses varies and is greatly influenced by the legal system in place within each separate country. Legal systems as such as a majority include Common Law, Civil Law, Socialist Law, and Religious Law. Common Law is said to be based in English history, wherein courts decide the present case from reviewing prior similar case decisions (Payne, p.57). Civil Law, indifferently, deals with civil code and the decisions made within the law are founded in codal provisions. (Payne, p.57). Socialist Law is interestingly based on Civil Law, however with distinguishing modifications from basic Civil Law that lean towards more communist, Marxist ideology. Lastly, Religious law is centered within religious traditions wherein they consist of moral norms that sets the standards for both individual, personal life and business alike. Most commonly Religious Law often refers to either Islams Sharia Law, Christianitys Canon Law, Jewish Halakha Law, or Hindu Law.

In the case of Dubais International Environment, Dubais legal system can be considered a combination of Civil Law originating in Egypt, while also yet mostly pertaining to Religious Sharia Law. Basically, as Andrew Tarbuck and Chris Lester explained, Dubais legal system is founded upon civil law principles (most heavily inuenced by Egyptian law) and Islamic Sharia law, the latter constituting the guiding principle and source of law. (Tarbuck, p.7). Based upon Egyptian Civil Law, Dubais Civil Law is similarly set where contracts and transferring of property are recognized as sales agreements. In relation to this statement, The individual parties were allowed to determine restrictions and guarantees in their transaction concerning possible defects in the property or service as well as defects in the law. (Britannica, Web). Likewise, legislation within Dubai is established in codes that define the principles of Dubais civil law. As Tarbuck and Lester stated, There are federal codes of law which apply in Dubai and the other emirates dealing with the most important and fundamental principles of law, including civil, commercial, civil procedure, companies, intellectual property, immigration, maritime, industrial, banking and employment law. (Tarbuck, p.7.)

Dubais cultural environment as it is directly related to Sharia Law poses a threat or in a sense a risk on maintaining a Hooters in Dubai. The risk could be defined as an Operational Risk. Dr. Paynestated, Operational risk affects operations via government policy changes. (p.14) Within Dubai, Hooters is at this ris...