MGMT+650+-+Final+Exam+Question+7

__This answer was provided by Frank__ This represents the extent to which managers believe that foreign markets are just too different for involvement. Small businesses find that psychic distance to be a significant constraint. When key managers overcome this belief, a global culture is more likely to develop. Managers with little training in foreign languages and little international travel often resist internationalization. However, managers with previous international experiences, even just personal travel and sightseeing, have a greater propensity to recognize global opportunities. Often even a chance meeting during a foreign vacation can trigger an international small-business venture. Managers who are unwilling to take risks have difficulty supporting internationalization of the firm. Going international requires an entrepreneurial spirit and thus the willingness to face risks. Some managers just find the idea of international strategies too dangerous to the status quo. Others see international opportunities as beneficial to the company and to their careers. A global culture will develop when the owner / entrepreneur promotes company values that support and reward looking for international opportunities. // Bring foreign language tutors into the office to help staff communicate in the language of the target market(s) to help build confidence in the team that they can do it. // // Travel to the target region and stay long enough to develop knowledge base of potential value-chain partners. Initially, without commitment to reduce stress or anxiety associated with the effort. // // Educate staff on competitors pursuing similar efforts globally to build desire to compete globally. // Geographic distance- the strongest constraint facing small business owners in Australia was the geographic distance from their markets in Poland and the Czech Republic. Unlike larger firms that have more managers to send to negotiate or manage foreign operations, smaller businesses often rely on a few individuals who have to travel more often. Having to travel frequently to meet geographically dispersed partners can take a toll on the small business. // Virtual team development can alleviate the costs of frequent travel. // Small business in Australia often had to deal with the existing Central and Eastern European staff’s inability to make decisions. Such slow decisions can be very costly since time is critical for smaller businesses. // Finding a person locally who originally came from the region where the business is located, and hiring them to go temporarily to the location as an expatriate until they either qualify and decide to take the job, or are able to develop good candidates for an interview. // Small businesses often have a hard time understanding local market conditions and the local culture and business etiquette. For example, they may not have access to training and other resources to such market and cultural knowledge. This is even more significant given that most of the interviewees in the study agreed that a small business will likely fail if no effort is made to understand and adapt to such differences. Business owners need to know the region first hand. They have to go to the sight and see every inch of it first hand. It’s the only way to evaluate the region properly AND motivate staff to participate. Although larger companies may be able to hire middle managers, train them, and wait until they acquire modern management techniques, many smaller businesses have to contend with middle managers who have worked under communism for many years. It is very challenging for small businesses to do well with such managers. // Identify modern manager training workshops in the area and travel to the location for the training, inviting the local managers to join you to possible gain additional idea that could mutually benefit you. // Small businesses often find it challenging to locate local suppliers. Decades of state-owned enterprises have not encouraged private enterprises to flourish. These small businesses face the challenge of having to find committed suppliers. Dealings with such suppliers and distributors can be difficult and sometimes unethical. // Be persistent, but not desperate. Trade shows that include foreign entities could be a good place to make contact with the desired firms. // Small businesses also have to face the challenge of understanding and addressing governmental regulations and bureaucracy. While larger companies may have the resources to address such issues easily, smaller companies often have to contend with government regulations that have not changed much to address the needs of a market-based economy. // Solution: Communicate with trade regulators in the area to learn the requirements for doing business in the area. Alternatively, talk to existing firms and find out how their getting it done. //
 * //Identify two or three small business barriers to internationalization. If you were a recently hired manager of a small business facing great opportunities in a foreign market, how would you go about overcoming these barriers?//**
 * // Perceived psychic distance to foreign markets: //**
 * // International experience //**
 * // Risk aversion //**
 * // Overall attitudes toward international strategies //**
 * // Possible ways to overcome barriers //** (you can develop more):
 * // The following barriers are located in Focus on Emerging Markets, page 316 of text //**
 * // Small Business barriers to internationalization //**
 * // Lack of Central and Eastern European managers with decision-making authority- //**
 * // Psychic Distance- //**
 * Central and Eastern European middle manager’s mindsets **
 * Finding reliable suppliers **
 * Bureaucracy and Regulations **


 * __Heidi's Response__**

Ch. 7 Identify two or three **small business barriers** to internationalization. **__ Liabilities of foreignness __** : The disadvantages associated with competing with local firms that are more familiar with the local context and have better local connections (to resources). If you were a recently hired manager of a small business facing great opportunities in a foreign market, how would you **go about overcoming** these barriers?
 * __ Liabilities of smallness __** : The challenges facing small businesses in getting access to necessary resources to internationalize.
 * They have a small staff and must rely on the same individuals to endure grueling travel.
 * Lack resources to invest in cross-cultural training to better understand the countries in which they operate (local business and national culture).
 * __ Liabilities of newness __** : Refers to the operational challenges associated with starting a new business. These include issues such as financing, recruiting new employees, and marketing the product.
 * __ Small business advantage __** : Fast-moving entrepreneurs can use their competitive advantage of speed. Being first to market, they can capture significant sales before larger competitors react. The bureaucratic procedures of larger organizations slow down decision making, often leading to missed opportunities in the global marketplace.