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The Role of the International Manager

  1. 1. The Role of the International Manager, Steven Tolliver The Role of the International Manager Steven Tolliver
  2. 2. The Role of the International Manager, Steven Tolliver Outline: • Why are there International Managers? • What do they do? • Where do they work? • What skills are needed? • Who can be an International Manager? • The Future of International Management
  3. 3. The Role of the International Manager, Steven Tolliver Why are there International Managers? • To coordinate activities and resources of a company or entity across international boundaries. • To represent a company or entity overseas in: – Purchasing – Sales – Production – Logistics – Human Resources
  4. 4. The Role of the International Manager, Steven Tolliver Why are there International Managers? – Purchasing – Sales – Production – Logistics – Human Resources They perform the same tasks as “domestic” managers, but on a larger scale.
  5. 5. The Role of the International Manager, Steven Tolliver “Domestic” Managers? “… the formal label of ‘national management’ does not exist.” Alex Faria and Ana Guedes, “What is International Management?”
  6. 6. The Role of the International Manager, Steven Tolliver “Domestic” Managers? Every manager is an international manager to a certain extent.
  7. 7. The Role of the International Manager, Steven Tolliver Globalization
  8. 8. The Role of the International Manager, Steven Tolliver Globalization Is it the Internet and a lot of jet airplanes? Is it a way of thinking? A real and historical process?
  9. 9. The Role of the International Manager, Steven Tolliver Globalization Aspects of global economy, culture and society Internationalization (WTO) Regionalization (ARLEM) “Triadization” (US – EU – Japan) Cartels (OPEC)
  10. 10. The Role of the International Manager, Steven Tolliver Globalization The World: Less “globalized” than in 1913?
  11. 11. The Role of the International Manager, Steven Tolliver "The Cambridge Modern History Atlas" edited by Sir Adolphus William Ward, G.W. Prothero, Sir Stanley Mordaunt Leathes, and E.A. Benians. Cambridge University Press; London. 1912.
  12. 12. The Role of the International Manager, Steven Tolliver Globalization The World: Less “globalized” than in 1913? Three fundamental areas: (a)Material: movements of goods, capital and people, facilitated by three infrastructures: · physical (transportation and informatics), · normative (international trade rules) and · symbolic (English language as universal language). (a)Time-space: the change in the spatial reach of social action and organization between the local and global levels. and (b)Cognitive: the recognition of the causal relation between remote events, structures and issues and local matters (and vice-versa), as much as corresponding changes in our notions of space and time. Alex Faria and Ana Guedes, “What is International Management?”
  13. 13. The Role of the International Manager, Steven Tolliver The (almost) Global Trading System Evolving through: Small traders City-states Nation-states Empires Transnational Corporations The Gold Standard Bretton Woods Agreement GATT / WTO
  14. 14. The Role of the International Manager, Steven Tolliver The (almost) Global Trading System Origins: Small traders: Nomads, the Silk Road, Mediterranean sailors City-states: Greek city-states, Roman law Pax Romana Nation-states: European nations Empires: China Transnational Corporations: The East India Tea Co. The Gold Standard Bretton Woods Dollar Standard GATT
  15. 15. The Role of the International Manager, Steven Tolliver The (almost) Global Trading System Origins: Small traders City-states Nation-states Transnational Corporations The Gold Standard Bretton Woods Post-WWII system Dollar Standard Nixon “shocks” GATT Nearly signed by all
  16. 16. The Role of the International Manager, Steven Tolliver The (almost) Global Trading System
  17. 17. The Role of the International Manager, Steven Tolliver The (almost) Global Trading System GATT – near global adoption, governing nearly 97% of world trade Recent protectionist stances: CNOOC and Unocal (2005) Dubai Ports World and P&O (2006) BHP Billiton and PotashCorp (2010) But, if under duress, countries might suspend GATT rules.
  18. 18. The Role of the International Manager, Steven Tolliver What does the International Manager really do? • Coordinate their company’s activities and resources across international boundaries. • Represent their company overseas: – Purchasing – Sales – Production – Logistics
  19. 19. The Role of the International Manager, Steven Tolliver Various Models of International Management • Representative in an overseas subsidiary • Project manager at head office working on international operations • Independent contractor • Start-up / Small company
  20. 20. The Role of the International Manager, Steven Tolliver Various Models of International Management • Representative in an overseas subsidiary Working in: Production / Service performance: dealing with local own company staff and external suppliers to operate a factory, obtain materials, ship products and materials. Sales / Marketing / Liaison: Dealing with local own company staff and external vendors to sell company products and services, or maintain relations in-country.
  21. 21. The Role of the International Manager, Steven Tolliver Various Models of International Management • Project manager or team member at head office working on international operations Working in: Production / Service performance: dealing with in-country own company staff and external suppliers to manage operations from the head office. Sales / Marketing / Liaison: Dealing with local own company staff and external vendors to sell company products and services, or maintain relations in-country.
  22. 22. The Role of the International Manager, Steven Tolliver Various Models of International Management • Independent contractor Working in: Production / Service performance /Sales / Marketing: : dealing with in-country company staff and suppliers to manage operations on behalf of the company. Consulting.
  23. 23. The Role of the International Manager, Steven Tolliver Various Models of International Management • Start-up / Small company Working in: Production / Service performance /Sales / Marketing: : Representing the company in all/nearly all facets of business.
  24. 24. The Role of the International Manager, Steven Tolliver What are all IMs in these models doing? • Representative in an overseas subsidiary • Project manager at head office working on international operations • Independent contractor • Start-up / Small company
  25. 25. The Role of the International Manager, Steven Tolliver What are all IMs in these models doing? Acting as an interface between the company home office and the overseas market (company branches, factories, sales and distribution networks, purchasing and supply networks and other entities).
  26. 26. The Role of the International Manager, Steven Tolliver What skill sets do International Managers need? • Communicative and Persuasive skills • Analytical / complex problem solving skills • Organizational skills • Leadership skills
  27. 27. The Role of the International Manager, Steven Tolliver What skill sets do International Managers need? • Comunicative and Persuasive skills: – comprehension – expression – verification – active listening – effective bargaining – networking
  28. 28. The Role of the International Manager, Steven Tolliver What skill sets do International Managers need? • Analytical / complex problem solving skills: – forecasting – shipping – pricing
  29. 29. The Role of the International Manager, Steven Tolliver What skill sets do International Managers need? • Organizational skills – information resources – information management – planning
  30. 30. The Role of the International Manager, Steven Tolliver What skill sets do International Managers need? • Leadership skills – Inspiration – Delegation – Verification
  31. 31. The Role of the International Manager, Steven Tolliver International Management in Practice • Analyzing proposed deals, • Evaluating potential partners, • Responding to competitive threats • Human resources – considering prospective employees, – evaluating colleagues, – managing staff.
  32. 32. The Role of the International Manager, Steven Tolliver International Management Have a clear understanding of the • current situation, • goals • threats and opportunities, • and how achievement is measured.
  33. 33. The Role of the International Manager, Steven Tolliver International Management - Strategy
  34. 34. The Role of the International Manager, Steven Tolliver International Management - Strategy Published: June 2010
  35. 35. The Role of the International Manager, Steven Tolliver International Management - Strategy
  36. 36. The Role of the International Manager, Steven Tolliver International Management - Strategy
  37. 37. The Role of the International Manager, Steven Tolliver International Management - Strategy Globalization and Aging: More people are living longer, which makes the world older, and the young move to find work.
  38. 38. The Role of the International Manager, Steven Tolliver International Management - Strategy Population, Aging and Economic Growth, David E. Bloom, David Canning, and Günther Fink, 2008
  39. 39. The Role of the International Manager, Steven Tolliver International Management - Strategy Population, Aging and Economic Growth, David E. Bloom, David Canning, and Günther Fink, 2008
  40. 40. The Role of the International Manager, Steven Tolliver International Management - Strategy
  41. 41. The Role of the International Manager, Steven Tolliver International Management - Strategy Boost Juice Bars, Fruit juices and smoothies. Number of locations 236 (2009) Area served: Chile, China, Estonia, GCC (Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman), Germany, Hong Kong, Indonesia, Lithuania, Macau, Malaysia, Mexico, Ireland, Singapore, South Africa, South Korea, Thailand and the UK. Janine Allis, when visiting the US noticed the juice bar fad and decided to bring the idea to Australia. In 2000, the first store opened in Adelaide and by 2002, it became the fastest growing franchise chain in the country with a new store opening every four days. In 2006, Boost Juice Bars in New Zealand were sold when the franchiser went bankrupt. In 2007, the brand was launched in the UK, Chile, Kuwait, Singapore and Indonesia and most recently Thailand. Source: http://en.wikipedia.org/wiki/Boost_Juice
  42. 42. The Role of the International Manager, Steven Tolliver International Management - Strategy http://www.youtube.com/watch?v=Ddoai_8Vxa0 Interview with founder Janine Allis:
  43. 43. The Role of the International Manager, Steven Tolliver International Management - Strategy Process: 1) Research 2) Investments: trademarks and R&D 3) Define model 4) Mutual obligations (“their tasks, our tasks”) 5) Problem/ Solution: Exporting dairy products / Master franchiser handles suppliers in country 6) 4P’s: product, position, promotion, people 7) Screen colaboration offers
  44. 44. The Role of the International Manager, Steven Tolliver International Management - Strategy Process: 8) Controlled growth 9) Franchiser initial expense ($17K per store @ 20 stores) / BJB $170K – $220K training and investment > +/- 50% back to market 10) Unexpected external events (mad cow, bird flu) 11) Calculated risk 12) Excellent people (on staff and consulting)
  45. 45. The Role of the International Manager, Steven Tolliver International Management - Strategy Currency exchange
  46. 46. The Role of the International Manager, Steven Tolliver International Management - Strategy
  47. 47. The Role of the International Manager, Steven Tolliver International Management - Strategy For any international trade, currency fluctuation is always a factor. Profit and loss can change daily based on exchange rates.
  48. 48. The Role of the International Manager, Steven Tolliver International Management - Strategy
  49. 49. The Role of the International Manager, Steven Tolliver International Management in Practice Managing currency changes: • Do nothing > products and services at mercy of rate changes • Price goods in currency of destination market > price point is maintained, profits at risk • Insurance against rate changes
  50. 50. The Role of the International Manager, Steven Tolliver Sales Quotation / Pro Forma Invoice 1. Seller’s and buyer’s names and addresses 2. Buyer’s reference number and date of inquiry 3. Listing of requested products and a brief description 4. Price of each item (It is advisable to indicate whether items are new or used and to quote the price in U.S. dollars to reduce foreign exchange risk.) 5. Appropriate total cubic volume and dimensions packed for export 6. Appropriate gross and net shipping weight 7. Trade discount (if applicable) 8. Delivery point 9. Terms of sale 10.Terms of payment 11.Insurance and shipping costs 12.Validity period for quotation 13.Total charges to be paid by customer 14.Estimated shipping date from port or airport or export 15.Currency of sale A Basic Guide to Exporting, Unz & Co. (Division of WTS Corporation), 2010
  51. 51. The Role of the International Manager, Steven Tolliver Shipping INCOTERMS
  52. 52. The Role of the International Manager, Steven Tolliver INCOTERMS
  53. 53. The Role of the International Manager, Steven Tolliver INCOTERMS
  54. 54. The Role of the International Manager, Steven Tolliver INCOTERMS Most common: Ex-works: Buy picks up cargo from seller; all shipping costs for buyer FAS/FOB: Seller delivers to port / Seller loads cargo on vessel, buyer pays for shipping CFR/CIF: Seller pays for shipping to port of import /with insurance, buy pays for arrival charges, import duties, taxes, and transport from port.
  55. 55. The Role of the International Manager, Steven Tolliver INCOTERMS Shipping conditions: • Detail when a purchaser takes ownership (and legal responisibility for) merchandise. • An opportunity for negotiation (price and schedule). Shipping is never an excuse to not guarantee products
  56. 56. The Role of the International Manager, Steven Tolliver Payment methods Wire transfer in advance Bill of Exchange (documentary drafts) Letter of Credit Consignment Countertrade
  57. 57. The Role of the International Manager, Steven Tolliver Payment methods Letter of Credit
  58. 58. The Role of the International Manager, Steven Tolliver Payment methods Letter of Credit
  59. 59. The Role of the International Manager, Steven Tolliver Payment methods Letter of Credit
  60. 60. The Role of the International Manager, Steven Tolliver Negotiation Win – Lose VS. Win – Win Win – Lose: From each deal, there is a winner and a loser Win – Win: In each deal, both parties gain J. Salacuse survey: 100% of Japanese > Win – Win 33% of Spanish > Win – Win
  61. 61. The Role of the International Manager, Steven Tolliver Negotiation Contract or Relationship Win – Lose or Win – Win approach is tied to overall goal. For a one-off trade, Win-Lose is likely
  62. 62. The Role of the International Manager, Steven Tolliver What does the International Manager really do? • Coordinate their company’s activities and resources across international boundaries. • Represent their company overseas: – Purchasing – Sales – Production – Logistics
  63. 63. The Role of the International Manager, Steven Tolliver So, can anyone (or any manager) be an International Manager?
  64. 64. The Role of the International Manager, Steven Tolliver The Future of International Management + • GATT • Increases in technology, infrastructure • New groups with purchasing power - • Economic downturns • Climate change • Scarcity of raw materials • Aging populations
  65. 65. The Role of the International Manager, Steven Tolliver International Management Resources: • CIA World Fact Book: https://www.cia.gov/library/publications/the -world-factbook/index.html Governmental information: • Japan: JETRO: www.jetro.go.jp/ • USA, International Trade Administration: http://trade.gov/
  66. 66. The Role of the International Manager, Steven Tolliver Steven Tolliver steventolliver@manfatta.com

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