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The foreign trade management realizes the specifics in the solved tasks. Among the most important of them are following:
1. The organization of enforcement by the entity sounding in contract and agreements with foreign partners. The organizational structure of foreign trade activity’s management with determination of official powers and duties of the relevant departments and specialists are chosen for this purpose.
2. Management of a production’s export potential, its increase in technological level. The special place is taken here by identification of the factors which affect qualitative characteristics of the exported goods.
3. Creating of conditions for the most complete satisfaction consumer’s needs for goods within the chosen market segment abroad. This task is realized by the exporter who searches the market niche in the selected market, identification of demand’s main parameters, forming of the effective product portfolio policy directed for satisfaction of a consumer demand for goods.
4. A comprehensive study, an analysis and assessment of the international business’s external environment for search of competitive advantages’ sources. Such analysis is especially important for development of foreign trade activity’s strategy of an enterprise.
5. Search and development of new foreign trade operations’ forms. Among them the special place is taken by such foreign trade operations which showed the efficiency and answered export opportunities of an enterprise.
6. Profit maximization from foreign trade activity’s implementation.
This task performance is provided by optimization of enterprise’s goods turnover, ensuring economical efficiency of trade and economic procedure, effective management of assets, purposeful price policy.
Accomplishment of the foreign trade management’s tasks always requires accounting of the market’s features both within the country, and abroad on which the firm targets. Especially it concerns the new markets.
The foreign trade management’s essence is shown in its functions.
Analytical function. It is directed on studying of an individual foreign markets’ environment, consumer needs of foreign market segments, competitive situations. The special place is taken here by the search of a potential customer. It is important to determine the buyer who needs a product and who can purchase it.
The planning functions include the development of the system of foreign trade activity’s development plans. The basis of these plans is the strategic project. At the same time business plans are developed for new projects.
Accomplishment of plans assumes implementation of organizational actions. As function of the foreign trade management the organization includes creation of the departments in firms which perform the foreign trade operations, distribution of employees to workplaces, granting the official powers and responsibilities.
The place and role of information function increase considerably in current economic environment. Implementation and expansion of foreign trade activity requires large volume of information in various areas.
The firm which performs foreign trade always bargains for definitive results. This task is carried out by an accounting function. Accounting of results includes estimation of cost effectiveness both in general from the foreign trade operations, and separately by specific types of goods on bill of products on regions, on operation types (export/import). As the production organization and goods deliveries on export are connected with costs, important place in accounting function is taken by effectiveness of exports’ analysis.
Innovative function of the foreign trade management is connected with development of new goods’ types, technologies or work’s forms in the foreign market. It has special importance for the companies which are engaged in technologies.
Efficiency of the foreign trade operations depends largely on control. It is necessary to control processes and indicators. They concern individual operations and family groups of goods. Process of control is reduced to comparison of plan tasks and the actual outcomes. Results of control find expression in the take action on development of firm’s activity in the foreign market.
All functions of management are performed at the same time and in interrelation with each other. Results of their actions depend largely on coordination. This task is carried out by the coordination function. Its action is expressed in two aspects: internal and external. In the first case there is a need for coordination of tasks and foreign trade activity’s functions with other departments and divisions of firm for the purpose of ensuring coordination and optimization of their work. The external aspect of coordination includes adopting coordinated policy on all activities on all market segments [12].
The corresponding management structure is necessary for effective foreign trade activity’s management on an enterprise. Any enterprise has an interest in such foreign trade activity’s organization which provided maximization of sales volume in case of minimization of time expenditures and means per unit of saleable output. Decision criterions of optimum of the foreign trade department’s organizational structure are various: company size, nature of its production specialization, structural scheme of the organization and taken form of management, set of performance environments, a level of development export.
The foreign trade activity’s management of an enterprise is understood as the impact on processes of preparation and implementation of the foreign trade transactions is oriented on profit earning, increase of cost effectiveness trough participation in the international division of labor. The essence of management is realized in its functions: planning, organization, coordination, stimulation, control.
The entities establish a department in the management structure for foreign trade activity, export department, which usually consists of two-three employees engaged in preparation of foreign trade’s contracts, customs, commercial and other documentation.
Large enterprises have the special foreign trade’s department for carrying out foreign trade activity. Services and specialized departments which carry out organizational, transport, advertizing, analytical and other functions are created in the special foreign trade’s department. This apparatus depending on the manufacturing enterprise can be created as large intracompany division or as an independent foreign trade company. The foreign trade company obtains a legal status with its own balance and serves not only the enterprise which founded it, but turns into a foreign trade intermediary.
For forming a foreign trade department the following basic principles of organizational optimization shall be observed:
- flexibility, mobility and adaptability of the foreign trade activity’s organization which is often achieved by means of temporary work groups or project teams created from employees of various divisions for the solution of the current task of foreign trade activity’s development and are dismissed at the end of the project and task performance;
- the relative simplicity of the structure which allows to construct accurately the organizational scheme of management and not allowing duplication of functions, violation and complication of logicality of horizontal and vertical communications;
- compliance to commercial variety of goods' specifics, occupied in foreign trade activity;
- compliance to the foreign markets’ specifics. If the number of the foreign markets is great, then there can be peer group of the countries and if the number of markets is small, then other type is, etc. [24, page 160-161]
The organizational structure of foreign trade activity’s management on an enterprise is determined by those purposes and tasks which it is urged to solve.
The tasks of the foreign trade department are:
• to plan, make short-term, medium-term and long-term plans of foreign trade activity’s development;
• to organize, creating organizational firm’s divisions for implementation of the foreign trade operations, distributing employees on workplaces, granting them corresponding functions, powers and responsibility and determining forms and methods of preparation and implementation of foreign trade activity;
• to coordinate and approve tasks and functions of foreign trade activity with other departments and divisions of a firm on purpose to disallow contradictions in decisions and to provide coordination and optimization of all work;
• to consider results and to estimate foreign trade activity’s efficiency due to the determination of foreign trade operations’ cost effectiveness separately by specific types of goods and regions and in total on all product range of the goods delivered abroad or imported from abroad;
• to control the foreign trade operations both in operational, and in the strategic mode, carrying out the current monitoring and control over the implementation of annual, medium-term and long-term foreign trade activity’s plans;
• to provide information system of foreign trade activity’s servicing of a firm due to implementation of information management systems.
Departments of enterprises (foreign trade activity) rely upon compliance with the company charter and staff listing developed by an export enterprise (importer). Founding documents (the company charter or the agreement), as a rule, contain the following sections: general terms, object of activity, purposes and tasks of a firm, rights and liabilities of charter members, management’s principles of a firm and organizations of its work, order of restructuring, liquidation, etc.
Only large enterprises can afford the creation of a foreign trade department, small and medium scale enterprises don’t have adequate financial resources necessary for functioning of similar structural divisions.
A foreign trade department is an independent structural division of an export enterprise and performs management functions of foreign trade activity as an element of a single in-house management’s system. The structure of a foreign trade department or firm can be the most various. As a rule, the department has small staff and line chain of command. The director determines tasks of department’s work and distributes staff responsibilities. For example, functional employee's responsibilities can concern only certain export goods or the market of some region (country).
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