The Role of the International Manager

The Role of the International Manager, Steven Tolliver
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

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

Why are there International Managers?
– Purchasing
– Sales
– Production
– Logistics
– Human Resources
They perform the same tasks as “domestic”
managers, but on a larger scale.

“Domestic” Managers?
“… the formal label of ‘national
management’ does not exist.”
Alex Faria and Ana Guedes,
“What is International Management?”

“Domestic” Managers?
Every manager is an international manager to
a certain extent.

Globalization

Globalization
Is it the Internet and a lot of jet airplanes?
Is it a way of thinking?
A real and historical process?

Globalization
Aspects of global economy, culture and society
Internationalization (WTO)
Regionalization (ARLEM)
“Triadization” (US – EU – Japan)
Cartels (OPEC)

Globalization
The World: Less “globalized” than in 1913?

"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.

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?”

The (almost) Global Trading System
Evolving through:
Small traders
City-states
Nation-states
Empires
Transnational Corporations
The Gold Standard
Bretton Woods Agreement
GATT / WTO

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

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

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.

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

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

Management
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.

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.

Management
Working in:
Production / Service performance /Sales / Marketing: :
dealing with in-country company staff and suppliers to
manage operations on behalf of the company.
Consulting.

Management
Working in:
Production / Service performance /Sales / Marketing: :
Representing the company in all/nearly all facets of
business.

What are all IMs in these models doing?
• Project manager at head office working on
international operations

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).

What skill sets do International
Managers need?
• Communicative and Persuasive skills
• Analytical / complex problem solving skills
• Organizational skills
• Leadership skills

Managers need?
• Comunicative and Persuasive skills:
– comprehension
– expression
– verification
– active listening
– effective bargaining
– networking

Managers need?
• Analytical / complex problem solving skills:
– forecasting
– shipping
– pricing

Managers need?
• Organizational skills
– information resources
– information management
– planning

Managers need?
• Leadership skills
– Inspiration
– Delegation
– Verification

International Management in Practice
• Analyzing proposed deals,
• Evaluating potential partners,
• Responding to competitive threats
• Human resources
– considering prospective employees,
– evaluating colleagues,
– managing staff.

International Management
Have a clear understanding of the
• current situation,
• goals
• threats and opportunities,
• and how achievement is measured.

International Management - Strategy

Published: June 2010

Globalization and Aging:
More people are living longer, which makes
the world older, and the young move to
find work.

Population, Aging and Economic Growth, David E. Bloom, David Canning, and Günther Fink, 2008

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

http://www.youtube.com/watch?v=Ddoai_8Vxa0
Interview with founder Janine Allis:

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

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)

Currency exchange

For any international trade, currency
fluctuation is always a factor.
Profit and loss can change daily based on
exchange rates.

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

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

Shipping
INCOTERMS

INCOTERMS

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.

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

Payment methods
Wire transfer in advance
Bill of Exchange (documentary drafts)
Letter of Credit
Consignment
Countertrade

Payment methods
Letter of Credit

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

Negotiation
Contract or Relationship
Win – Lose or Win – Win approach is tied to overall goal.
For a one-off trade, Win-Lose is likely

So, can anyone (or any manager) be an
International Manager?

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

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/

Steven Tolliver
steventolliver@manfatta.com

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