TOPIC EIGHT: INTERNATIONAL MANAGEMENT

International Management

International management refers to the process of planning, organizing, directing, and controlling
resources to achieve organizational goals in a global context. It encompasses the unique
challenges and opportunities associated with managing businesses across borders, cultures, and
legal environments.

International shipping environment

International shipping environment encompasses the complex interplay of economic, political,

legal, technological, and environmental factors that influence the global movement of goods by
sea. Understanding this dynamic environment is crucial for organizations involved in
international trade and shipping operations.

1. Economic Factors:
 Global Trade Patterns: The volume and direction of international trade significantly
impact shipping demand and freight rates. Economic growth, currency exchange rates,
and trade agreements influence global trade patterns and shape the international shipping
landscape.
 Commodity Prices: Fluctuations in commodity prices, particularly for bulk cargo such as
oil, grains, and minerals, can affect shipping demand and profitability. Organizations
involved in shipping these commodities need to monitor price trends and adjust their
strategies accordingly.

2. Political Factors:
 International Relations: Political stability, trade relations between nations, and
government policies can have a direct impact on shipping activities. Political instability
or conflicts can disrupt trade routes, increase shipping costs, and pose security risks.
 Port Regulations and Infrastructure: Port regulations, tariffs, and infrastructure
development can affect shipping costs, transit times, and vessel efficiency. Organizations
need to stay informed about port regulations and infrastructure changes to optimize their
shipping operations.
 3. Legal Factors:
 International Maritime Law: The International Maritime Organization (IMO) sets
regulations governing maritime safety, environmental protection, and labor standards.
Organizations involved in shipping must comply with these regulations to avoid penalties
and ensure the safety of their vessels and crews.
 Customs and Trade Laws: Customs procedures, import-export regulations, and trade
agreements can affect shipping costs, transit times, and compliance requirements.
Organizations need to understand and adhere to relevant customs and trade laws in each
jurisdiction they operate in.

4. Technological Factors:
 Vessel Technology: Advancements in vessel design, propulsion systems, and navigation
technology can improve fuel efficiency, reduce emissions, and enhance operational
safety. Organizations can gain a competitive edge by adopting innovative vessel
technologies.
 Port Technology: Port automation, cargo tracking systems, and data analytics tools can
streamline cargo handling, improve port efficiency, and reduce costs. Organizations need
to embrace technological advancements to optimize their shipping operations.

5. Environmental Factors:
 Environmental Regulations: Increasingly stringent environmental regulations, such as
emission limits and ballast water management requirements, impact shipping operations.
Organizations need to invest in cleaner technologies and adopt environmentally
responsible practices to comply with regulations.
 Climate Change and Extreme Weather Events: Rising sea levels, extreme weather events,
and disruptions to marine ecosystems can affect shipping routes, port operations, and
insurance costs. Organizations need to consider climate change risks and adapt their
strategies accordingly.

Navigating the international shipping environment requires a comprehensive understanding of

these complex and interconnected factors. Organizations involved in shipping need to stay
informed about developments in each area, adapt their strategies accordingly, and collaborate
with industry partners to address global challenges and ensure the sustainable growth of the
maritime industry.
Managerial functions in international shipping management

Managerial functions in international shipping management encompass the planning, organizing,

directing, and controlling of resources to achieve organizational goals in the context of global
shipping operations. These functions are crucial for ensuring the efficient, effective, and safe
movement of goods across international borders.

1. Planning:
 Strategic Planning: Developing long-term strategies to enter new markets, expand
shipping routes, and adapt to changing market conditions.
 Fleet Planning: Determining the optimal size and composition of the shipping fleet based
on cargo demand, vessel availability, and operational costs.
 Route Planning: Optimizing shipping routes to minimize transit times, fuel consumption,
and operating expenses.

2. Organizing:
 Organizational Structure: Establishing a clear organizational structure that defines roles,
responsibilities, and reporting relationships within the shipping company.
 Crew Management: Recruiting, training, and managing a competent and diverse crew to
ensure the safe and efficient operation of vessels.
 Port and Terminal Management: Coordinating with port authorities, terminal operators,
and logistics providers to optimize cargo handling and port operations.

3. Directing:
 Team Leadership: Leading and motivating a multicultural team of seafarers and shore-
based personnel to achieve organizational goals.
 Communication and Coordination: Effectively communicating with stakeholders,
including customers, suppliers, and partners, to ensure smooth coordination and
collaboration.
 Decision-Making: Making informed decisions based on market analysis, risk assessment,
and performance data to navigate the complexities of the international shipping
environment.
 4. Controlling:
 Performance Monitoring: Tracking key performance indicators (KPIs) such as vessel
utilization, fuel efficiency, and cargo handling times to identify areas for improvement.
 Risk Management: Assessing and mitigating potential risks such as piracy, weather
events, and market fluctuations.
 Cost Control: Implementing cost-saving measures and optimizing resource utilization to
maintain profitability and competitiveness.

Managerial functions in international shipping management are dynamic and require a

combination of technical expertise, leadership skills, and strategic thinking. Effective managers
in this field possess a deep understanding of the maritime industry, the intricacies of global trade,
and the ability to navigate complex regulatory and environmental landscapes. By effectively
executing managerial functions, shipping companies can achieve operational excellence,
financial success, and a sustainable competitive edge in the global maritime industry.
Difference between international and domestic management
International management and domestic management are both crucial aspects of business
operations, but they differ in the scope and complexity of the challenges they face.
Difference according to: International Management
Scope and complexity Encompasses a broader scope,
spanning multiple countries,
cultures, and regulatory
environments, requiring
greater adaptability and cross-
cultural sensitivity.
Culture and legal Must navigate diverse cultural
considerations norms, communication styles,
and business practices,
adhering to various legal
systems and regulations
across borders.
Market dynamics and Deals with a more complex Operates within a more localized
competition and dynamic global market,
facing competition from
multinational corporations and
navigating international trade
regulations and tariffs.
Strategic planning and Requires a more
risk management comprehensive strategic
planning approach,
considering global market
trends, political risks, and
cultural sensitivities.
Organizational structure Often necessitates a more
and staffing decentralized organizational
structure to manage
operations across different
regions and cultures, requiring
effective communication and
Domestic Management
Focuses on operations within a
single country, facing a more
familiar and predictable business
environment.
Operates within a single cultural
and legal framework, reducing
the need for extensive adaptation
to cultural differences and legal
nuances.
market, facing competition
primarily from domestic
companies and adhering to
national regulations.
Strategic planning focuses on
understanding the domestic
market, competitor strategies,
and economic trends within the
country.
Organizational structures tend to
be more centralized, with
decision-making concentrated at
the national level
 coordination mechanisms.

Human resource Must address recruitment, Human resource management

management training, and retention of a
diverse workforce,
considering cultural
differences, language barriers,
and international employment
laws
focuses on recruiting, training,
and managing employees within
the domestic context, adhering
to national labor laws and
cultural norms.

Attainment of a unified global theory of management

The attainment of a unified global theory of management refers to the ongoing quest to develop a
comprehensive and universally applicable framework for understanding and practicing
management principles across diverse cultural, economic, and organizational contexts. While
there has been significant progress in developing management theories, achieving a truly unified
global theory remains a complex and multifaceted challenge.

Challenges in Achieving a Unified Global Theory of Management:

1. Cultural Differences: Management practices and principles are often influenced by

cultural norms, values, and expectations. A unified global theory must consider and
accommodate these cultural nuances to be effective across diverse societies.
2. Economic Variations: Economic systems, market structures, and technological
advancements differ across countries and regions. A unified global theory should be
adaptable to various economic contexts and incorporate the impact of technological
advancements on management practices.
3. Organizational Diversity: Organizations vary in size, structure, industry, and purpose. A
unified global theory should encompass a broad range of organizational contexts and
provide insights applicable to different types of organizations.
4. Evolving Management Landscape: The field of management is constantly evolving, with
new theories, concepts, and practices emerging regularly. A unified global theory must be
dynamic and capable of adapting to the ever-changing management landscape.

Approaches to Achieving a Unified Global Theory of Management:

 1. Comparative Management Studies: Examining and comparing management practices
across different cultures and countries can provide valuable insights into the universality
and context-specificity of management principles.
2. Cross-Cultural Research and Collaboration: Engaging in cross-cultural research and
collaboration among management scholars can foster a broader understanding of cultural
influences on management practices and facilitate the development of culturally sensitive
theories.
3. Contextualization of Management Theories: Recognizing and accommodating the
contextual factors that influence management practices, such as cultural norms, economic
systems, and technological advancements, is crucial for developing a unified global
theory.
4. Integration of Diverse Perspectives: Incorporating a variety of perspectives from different
cultures, disciplines, and organizational backgrounds can enrich the understanding of
management and contribute to a more comprehensive global theory.
5. Continuous Learning and Adaptability: The pursuit of a unified global theory is an
ongoing process that requires continuous learning, adaptation, and refinement to keep
pace with the evolving nature of management and the global business environment.

Achieving a unified global theory of management remains an aspirational goal, but the pursuit of
this objective has driven significant advancements in management thinking and practice. By
recognizing the challenges and adopting a multifaceted approach that embraces cultural
diversity, economic variations, organizational context, and continuous learning, the field of
management can move closer to developing a unified global theory that is both comprehensive
and applicable across diverse contexts.