International Business and Its Main Challenges

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Introduction

In the modern world, international companies are constantly faced with many business start-up problems related to national differences, global competition, and functional operability. Qatar is a world-famous business hub that houses international businesses with high potential. The success of big multinational companies that operate in Qatar and globally is critical for the national economy since they enhance the country’s financial stability, provide jobs, and constantly raise the level of living for citizens through CSR and sustainability practices. This paper aims to identify and analyze the three most critical challenges leaders face in companies operating in the contemporary business world.

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Corporate Social Responsibility and Sustainability Practices

There is plenty of issues related to the area of ethics, corporate social responsibility, and sustainability. According to World Economic Situation and Prospects 2020, developed by the United Nations, 17 sustainable development goals are compulsory for socially responsible international businesses worldwide (World economic situation, 2020). These goals are targeted at improving the corporate impact on the global environment and local communities. The CSR framework assumes that there is always a bigger perspective ensuring that implementing CSR and sustainability goals will help companies reach prosperity (Hill, 2021). The UN sustainable development goals include ending poverty in all forms everywhere, ending hunger and achieving food security, ensuring healthy lives, promoting wellbeing for all ages, and other purposes (World economic situation, 2020). Goals like providing education and well-being are of particular importance for large telecommunication companies like Etisalat.

How Etisalat Implements the CSR

Etisalat is a vast mobile and Internet operator that covers UAE, Saudi Arabia, Morocco, Mauritania, Mali, Burkina Faso, Ivory Coast, Niger, Chad, CAR Gabon, Egypt, Afghanistan, and Pakistan and has 154 million users. CSR is imperative for telecommunication companies, as they have more opportunities to work with local communities. Agwu (2021) acknowledges a positive relationship between the implementation of CSR practices and the company’s corporate image and reputation. The scholar describes the UAE-based Etisalat CSR initiatives on providing educational training for 10,000 employees in UAE, among which 3600 are residents and 6400 are foreign citizens.

Agwu (2021) emphasizes that this practice improves the company’s non-financial performance and recommends continuing current CSR practices. The expert states these practices should be enhanced by “continuously monitoring the changing expectations of key stakeholders to identify areas of support, and ongoing consultation with key stakeholders in decision-making” (Agwu, 2021, p. 80). In other words, the scientist recognizes the need for Etisalat to launch more prominent, more versatile, and community-targeted CSR projects.

Bello (2020) mentions that the provision of services within the post-basic education sector increases employment opportunities and is an important CSR practice that the company is implementing in Nigeria under the 17 UN Goals. In particular, Etisalat has contributed to expanding the school curriculum in the country, organized a STEM camp for girls with a science education program, and provided career counseling for university students. Through these practices, the company has improved learning outcomes in post-basic education and expanded its educational infrastructure (Bello, 2020). This study indicates that the implementation of CSR practices is a vital issue for modern international companies. The presented data also prove that, as a rule, companies choose several simple directions of development for CSR, which do not require significant time and financial investments.

Khan (2018) notes that Etisalat launched charity and CSR practices in Afghanistan, where the company created 1000 direct and an estimated 25,000 indirect jobs. Among other initiatives, it developed the M-Hawala mobile money facility, which is very helpful in making international money transfers and is handy for small businesses. In Afghanistan, mobile money is the safest and most beneficial way to work with currencies. Other Etisalat CSR activities here include the Blood Donation Campaign, Masjids-Annual Holy Quran Award, food distribution, Hajj Events, and Loyalty Programs for Charity (Khan, 2018). Educational initiatives feature the Graduate Trainee (GTs) Induction Program, distributing school bags and stationery items, and sponsoring sports events. Given the presented information, Etisalat perceives the CSR activities as charitable practices, but this is a wrong conception since CSR implies seeing the local community members more as active and responsible partners than as charity receivers.

In 2020 Etisalat was working hard to maintain a positive corporate image. In its annual report, the company mentions “successfully launching the first Open Virtual Radio Access Network (Open VRAN) in the MENA region,” which can be seen as a more profound step in the CSR realm (Annual report 2020, para. 3). In March 2020, Etisalat joined the ‘Stay at Home’ UAE governmental initiative. The company offered free mobile Internet and free applications “to facilitate distance learning and work from home for students, businesses, and government entities,” which is a correct understanding of the CSR concept (Annual report 2020, para. 3). By April 2020, the company empowered 1 million students with e-learning mobile and Internet opportunities.

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Etisalat then developed the ‘Business Edge’ UAE-based platform providing services and solutions “to securely connect SMBs with their customers,” which is another sustainable CSR move (Annual report 2020, para. 3). In June 2020, Etisalat launched MT Cash, the mobile payment system that could be a handy solution for users working remotely. Then, in August 2020, the e-store was finished, a free website builder, another convenient tool for start-ups and local businesses worldwide.

Recommendations

Given the information presented above, Etisalat sometimes wrongly understands the concept of CSR, just like many other companies who mix up CSR and charity practices. CSR is not about funding disadvantaged groups; it is about creating new sustainable opportunities and investing in employment and education (Hill, 2021). CSR mainly aims to empower local communities by providing jobs, working with local suppliers, or supporting local small and medium businesses and start-ups.

Therefore, recommendations were developed to introduce changes in Etisalat’s CSR strategy. Firstly, it is recommended to create CSR and not charitable or funding opportunities for the 5 million users in Afghanistan. The examples may feature empowering remote employment, online payments, and online stores. At the same time, the educational initiatives are sustainable and therefore should be maintained. Secondly, there is a need to discover more investment opportunities in Nigeria regarding connection and technologies. Finally, Etisalat can focus on improving the latest robust services targeted at UAE users, like the Virtual Radio Network, free mobile Internet and applications for distant learning, secure connection for SMBs, MT Cash mobile payment system, and e-store website building. Etisalat leaders can adapt Authentic Leadership and Servant Leadership Theories that are highly applicable for CSR-related projects.

Entering Developed and Emerging Markets

Entering new markets, including the developed and emerging ones, is an ongoing problem for each international company striving to widen its horizons constantly. When entering the new markets, the businesses have to make three specific decisions on which markets to enter, when to enter them, and on what scale (Hill, 2021). Then the organization also has to think about the entry mode and the potential alliances.

More and more companies start to operate globally, with this tendency beginning in the early 2000s and growing since then. MENA, Chinese, Indian, Latin American, and African markets present a unique opportunity for international companies with established production and high management and technology expertise. However, sometimes entering new markets can be challenging, whether due to conservatism and distrust of the product among buyers, obstacles to doing business created by national legislation, or competition from local brands.

Del Monte Foods Entering New Markets

Del Monte Foods has gone through many twists and turns since it was established in 1892 in the US. The company has a stable demand for its products worldwide; it sells canned fruits and vegetables and positions itself as a healthy food brand that promotes quality and sustainability (Del Monte, 2021). The company has had good potential for expansion as it contributes to its consumers’ ingraining healthier nutrition habits.

One of the first markets where Del Monte began exporting its goods back in 1950 was Mexico. Del Monte Food’s business was built on exporting and contracts with local farmers to help strengthen the local economy. Initially, the company acted exclusively as an exporter of ready-made canned food, but in 1962 opened the first plant in Mexico to produce canned tomatoes, tomato products, and chili; by 1969, Del Monte made 69 types of products (Williams, 2019). Since 1983, the company has adopted ‘satellite farming,’ breaking an older trend of companies contracting larger farmers (Williams, 2019). This decision had a powerful beneficial effect on the agricultural economy sector of Mexico.

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In 2007, Del Monte officially began operations in the UAE, focusing on selling fresh, cold, and sweet products. The company combined export and production; Del Monte’s first plant in UAE produced canned food, fresh produce, and fresh cuts. In this market, the company relied on the strength of distributors by introducing vending machines with packaged fresh fruit salads (Del Monte Arabia, 2021). These machines were located at gas stations and served as an alternative to less healthy snacks. The company signed a contract with KFC, which introduced Del Monte packaged vegetable salads to the menu (Del Monte Arabia, 2021). Del Monte has also developed a line of bottled fresh juices and actively promoted its canned products.

In 2008 Del Monte entered the Indian market, starting again with exporting goods and focusing on distributors. The new joint venture, Field Fresh, has signed deals with local popular fast-food restaurants such as Dominos, SubWay, MacDonald, Pizza Hut, and Burger King (Sharma, 2019). Using the tactics of capturing the market through B2B channels, the company eventually succeeded in conquering the highly competitive B2C market by placing its products in the country’s leading supermarkets.

Recommendations

The company has entered the MENA and North African markets, but the Central and West African markets also have sound potential. Del Monte could start by analysing the region’s potential, using the Global Edge ratings to determine the most politically and economically stable market systems (Hill, 2021). A partnership scheme with local farmers can have significant potential and a possible strong positive effect on the development of local economies. Del Monte can do detailed market analytics and then enter on a large scale as the company’s resources allow it to do so (Hill, 2021). After making such a strategic commitment, Del Monte can move from solely export to building factories to produce fresh and canned food.

Given the high demand for quality and healthy food in the markets of the Central and West African regions, the new production facilities will allow Del Monte to benefit from early entry. The company should culturally localize its products by utilizing the Visionary Leadership Theory that implies developing a clear vision of mission and values concerning the new markets. Del Monte states that its mission is to “become the world’s leading provider of healthy, wholesome and nutritious fresh and prepared food and beverages to consumers of all ages and provide consumers with high quality, safe and nutritious food and beverages” (About us, 2021, para. 4). This approach fully meets the expectations of potential target buyers and is at the peak of the trend of healthy and wholesome nutrition.

Human Resource Management

Employee retention is the primary indicator for the effectiveness of the human resource management policy in most companies. This element of HRM is critical since the expenses related to employee turnover are often higher than the yearly salary expenses (Hill, 2021). Therefore, most companies try to develop practical talent management strategies to ensure their employees have high levels of job satisfaction and will not leave the company after getting valuable experience and training. The retention strategies may include training programs, career development strategies, and compensation policies.

Kenya Airways Talent Management Practices

Scientists agree that talent management is a critical element of airline businesses’ success, which is often overlooked. Mamdouh et al. (2021) report the lack of strategies for working with talent and recognize the need to implement such practices. Matuga and Bula (2021) studied the case scenario of Kenya Airways’ business. They determined the positive correlation between the implementation of the training programs, career development strategies, compensation policies, and employee retention levels in the company. Therefore, the scholars recommended the company leaders proceed with these talent management practices. Taye et al. (2020) also studied the case of Keya Airways; the scientists discovered that company leaders and managers overlook the importance of leadership methods. According to the study, remuneration policy was not related to employee intentions to change jobs, while leadership strategies were.

Recommendations

Experts point out the company’s insufficiently effective talent management policy; therefore, Kenya Airways should develop a sound TM strategy. This strategy can be based on introducing the LMX model of relations between the management and employees since this relationship-based model proved to be one of the most effective in increasing job satisfaction. LMX Leadership Theory implies that the managers develop close and friendly relations with the ‘inner circle’ of employees who share the manager’s values. The LMX leadership approach is based on trust between the managers and employees. This leadership method should be used as the basis for the new TM strategy since it increases employee retention and the quality of the job input and job outcomes.

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Conclusion

Thus, the three most critical challenges faced by leaders in companies operating in the contemporary business world were identified and analysed. The leadership theories were applied to develop recommendations on improving the existing management and business strategy practices. Implementing corporate social responsibility, entering new developed and emerging markets, and creating a practical talent management strategy are the issues faced by most businesses today. Companies should adopt the practices recommended by the experts to ensure the current and future success of their organizations.

Reference List

About us (2021) Web.

Agwu, M.O. (2021) ‘Corporate Social Responsibility and non-financial organizational performance in Etisalat Telecommunication Company United Arab Emirates’, Journal of Business School 2019, 2(1), pp. 80-98.

Annual report 2020 (2021) Web.

Bello, I. (2020) ‘Sustainable development goals (SDGs) for education in Nigeria: an examination of Etisalat corporate social responsibility in Nigeria’s post-basic education sector’, International Journal of Lifelong Education, 1(3), pp. 1-14.

Del Monte (2021) Web.

Del Monte Arabia (2021) Web.

Hill, C. WL (2021) International business: Competing in the global marketplace. McGraw-Hill, 13th ed.

Khan, M. (2018) ‘Corporate Social Responsibility (CSR) activities in mobile telecommunication industry: Case of MTN and Etisalat Afghanistan’, Vivekananda Global University.

Mamdouh Mohamed Abd El-Maksoud, R., Sayed Amin, W. and Samir Hizah, D. (2021) ‘Talent management and its role on supporting the competitiveness in the airline companies’, Talent Management Journal, 5(15), pp. 55-97.

Matuga, L.M. and Bula, H. (2021) ‘Human resource management initiatives and employee retention at Kenya Airways’, International Journal of Advanced Research and Review, 6(3), pp. 11-29.

Sharma, A. (2019) ‘Building brand through B2B route: Del Monte in India. South Asian Journal of Business and Management Cases, 8(2), pp. 215-227.

Taye, GT, Keino, DC and Ngala, MO (2020) The mediating effect of employee remuneration on the relationship between leadership practices and turnover intention of technical staff in Kenyan schedule operating passenger airlines’, African Journal of Emerging Issues, 2(9), pp.31-50.

Williams, S. (2019) ‘Productos Del Monte: A vegetable and fruit canning operation in Mexico’, In Agribusiness and the Small-Scale Farmer A Dynamic Partnership for Development (pp. 125-142).

World economic situation prospects 2020. Web.

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