The Role of International Strategy and Organizational Design in Global Market

The current trend of world economics business model lays on the world system division of labor between the core, the marginal, and the semi-marginal countries/states. The trading is not “isolated” or “internal” but rather it participates externally or in the global market and as such, this type of market is heavily affected by the dictates of the globalization trends.

The system of economics and their flow and relations between these countries are “non-static” and “non-constant” over long and short periods of time due largely to political, environmental and cultural changes vis á vis the evolving idea of ‘consumerism’ in the global community. The traditional concept of consumerism and commoditization of goods is largely challenged, hence, the business sectors/producers should construct an effective strategy and an efficient organizational design to cope up with the world economic trend and at the same, fulfill the organization/companies objectives and visionary goals.

The success, therefore, of an international company, lies on competitive action central to the combination of an effective strategic and traditional management.  We do not displace the idea of traditional management (e.g. budgeting and marketing) because its’ function is recognized as the core of business planning but rather, we aim to rectify/improve the company’s/organization’s business performance by target shooting the errors and analyzing it within the context of the global market system (or the business environment) and the capabilities (e.g. assets, facilities, resources) of the company system.

Critical to strategic management is the anticipation of changes in the economic system, in the demands of the consumers, new business technologies, competition, and (global) economic policy developments. Co-integration of the two—traditional and strategic—would give a sense of direction to the company in the globally competitive market.

What would be an apt strategic management in the non-static global economic system? The strategic management for this is a six level schema: (1) analysis of external factors (2) scrutinizing internal factors (3) stratagem (4) execution and (5) performance assessment/evaluation.

Arguably, the logic in analyzing the external factors lies in the structural level of social formation, but, we dispense this, in favor of the transnational concept—an approach that capitalizes on the importance of transnational practices in three major sectors, political, economic, cultural with focus on transnational corporation influence and consumerism— that of which had been the latest trend in global capitalism. Also, the importance of technological improvements and their incorporation into the market is intangible in the analysis of external factors.

The presence of competitors and economic policies should not be undermined; the parameters set by international laws may be restrictive but nevertheless, they are designed to facilitate a “fair” trading system; competitors for a particular commodity should also be accounted since globalization is heavily mandated by the transnational corps. It is on the basis of such external factors the company will seek to adjust to and construct the stratagem.

The capacity of the organization, its’ parameters, its’ resources, its’ liabilities and its’ needs must be carefully examined. Financial status, the employed technology for the commodity, the operative management and the available facilities must be ‘apt’ and can be competitive with the international companies. Leadership within the system and good working force are important elements. The organization should seek to answer the following in response to its internal structure: is the product globally competitive?

After assessing the internal and external factors, devising the stratagem is the next point of economic action. Goal identification and the feasibility of the plan being constructed is high on the agenda. Crucial to this is the statistics of materialization, the impact on the company/organization, and products development over a timeframe. Critical points should be well identified as well as mitigating errors, alternative plans, and analyzing and defining jobs and responsibilities per level of organization. The stratagem developed should have the following characteristics: (1) goal-oriented; (2) creative, by-product of external and internal analysis; and (3) strength-decisive/non-vulnerable in the market; (4) feasible.

The execution of strategy requires organizational design, resource allocation, and strong motivation. Organizational design involves efficient distribution of work force, recognizing their potential, and creating effective relations between the working people. Performance assessment is the last step and is achieved by assessing the plan on its’ efficiency on its’ how’s and ends. Flow monitoring of the work and assessing statistical significance of produce as well as company growth are important evaluation points. The importance of such strategy is the actual/real test of the stratagem on the economic market.

The strategic management places special attention to the environmental monitoring. Such activity is inherently important during forecasting or anticipation of future economic events and other related global aspects which may otherwise affect the position of organization and its products in the global economic scheme. Present and past trends and their change over time is prevalent in predicting scenarios that may be of value to the company. In strategic planning, ‘predictions’ are important in that the decisions are made to be flexible.

In recognizing the role of international strategy and organizational design in the global market, the organization/company takes an initial step in ‘equipping’ itself against the highly volatile network of economic world systems and becomes, at the most, competitive.

References

Sklair, L. (1999). Competing Conceptions of Globalization. Journal of World-Systems Research, 5, 143-162.

Aguilar, F. (1967). Scanning the business environment. NY: Macmillan, Inc.