International Bank Expansion Case

International Bank Expansion

February 23, 2015

International Bank Expansion

        The goal of this paper is to explain what is involved in a bank’s decision to expand internationally. We explore the macro environmental aspects of the choice of countries and what is decidedly important to consider. Social and economic responsibility is an important area for any company to research, as faltering in these two areas could pose financial risks for the bank. Legal and political issues in the country of choice are items that the bank needs to recognize. Management teams will need to be able to communicate these topics to employees so that all will be able to comprehend the need for education on the new working environment.

Macro Environment

There are several macro environmental variables to consider if the company wants to expand internationally. These generally are forces outside the organization that do not change regardless how the company proceeds. Macro environmental variables include sociocultural, political-legal, economic, and technological (Thomas & Mason, 2014).

The sociocultural factors are the customs, values, and lifestyles of the people of the country. These factors will determine how well the company will be able to obtain the necessary resources and be a viable business within the country. Cultural factors such as population demographics, education levels of the people, values the people hold, and attitudes towards social responsibility come into play.

The political and legal environment will give the company an idea of how the country works with businesses. The political party in power may have powerful influences over business practices. Understanding the legal environment will help the business recognize what they can and cannot do at any particular point in time. There are constant changes to laws affecting businesses and the laws are only getting more complex.

The business cycle of the county is an important factor that needs to be researched thoroughly.  If the country is in a recession, how with that affect the proposition of operating a business successfully. Monetary and fiscal policies of the country’s government wield a great deal of influence over business. How they control government spending and keep deficit spending in check will determine interest rates, exchange rates and can cause government expenditures to rise.  

How technologically advanced a country is can help the company with strategic planning. Technology allows companies and individuals to have the world at their fingertips. Increasing technological advances will help a company compete on a global level and help expand their potential customer base. This will increase to global footprint and can bring about a greater need for their services and products.

Strategy, Structure, Implementation Parameters, and Controls

When seeking information from the CEO about their strategy or expanding globally, you will need to know what their plan is. The bank must engage in strategic planning that emphasizes their goals and objectives. There are several questions that need to be asked of management when determining their strategy for expansion. For instance, what is our business and what is the plan for the future. Other questions involve how we identify barriers and how we overcome these barriers (International Strategic Planning, 2010). Management should use the company mission statement to describe the company’s vision of the future. They will need to do an internal analysis of the company to discover the strengths and weaknesses. Management will need to develop a communication plan to clearly communicate with employees what is expected and how they will achieve the goals set forth.