International strategic management

International strategic management

International Strategic Management (ISM) is an ongoing management planning process aimed at developing strategies to allow an organization to expand abroad and compete internationally. Strategic planning is used in the process of developing a particular international strategy.

An organization must be able to determine what products or services they intend to sell, where and how the organization will make these products or services, where they will sell them, and how the organization will acquire the necessary resources for these tasks. Even more importantly an organization must have a strategy on how it expect to outperform its competitors.

Complexity in developing an international strategy

When an organization moves from being a domestic entity to an international organization it must consider the possible broad complexities that accompany such a decision. In a domestic country, an organization must only consider one national government, a single currency and accounting system, one political and legal system, and usually a similar culture. Entering into one or more foreign countries can involve multiple governments, currencies, accounting systems, legal systems, and a large variety of languages and cultures. This can create numerous barriers to entry for an organization looking to expand internationally.

In foreign countries, there are the possibility of:
* local languages required in many situations.
* very diverse cultures, both between countries and sometimes even within countries.
* often volatile politics.
* varied economic systems.
* scarcity of skilled labor, with possible costs in training labor or redesigning procedures.
* poorly-developed financial markets and government-controlled capital flows, in some of the countries.
* problems and exorbitant costs in obtaining market research data.
* limited advertising, subjected to lots of restrictions.
* possible low literacy rates, not to mention the possibility of making mistakes in the language when advertising.
* currency exchange fluctuations.
* inadequate or limited communication/
* mandatory worker participation in management in some countries.
* legal restrictions on laying off of workers.


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