International Business: Clothing Company Based in Trafford Park, Manchester, UK - Assignment Example

? International Business Part A: Introduction The decision of the outdoor clothing company based in Trafford Park, Manchester, UK to diversify into international markets such as Spain (Barcelona and Sebastian) makes it a multinational Corporation. Multinational corporations mainly operate in a complex and uncertain environment, complete with a unique set of organizational, coordination, and managerial demands. Most multinationals look for managers who are comfortable on the global stage as expatriates. Selecting Expatriates Managers: Key Traits and Competencies Selecting expatriate managers to undertake international assignments is often mired by lack of adequate empirical studies, but most of all by the inexistence of concisely defined traits and competencies critical to the success. One of the critical personalities attributes necessary for the expatriates encompass high openness to experience. The expatriate should have a flexible personality with attitudinal values of cultural empathy, patience and prudence (Connerley and Pedersen 2005, p.11). In addition, the expatriates should possess core expatriates competencies of linguistic skill, cultural sensitivity, relational ability, and ability to handle stress. Expatriate Preparation and Development This encompasses topics such as country orientation, cultural sensitivity, and practical advice. A general overview of the country includes briefs on aspects such as political structures, compensation norms, job design, housing, climate, education, taxes, and health conditions. Cultural sensitivity, on the other hand, preempts the effects of culture shock by aiding employees to adopt an open mind to the diverse outlooks and principles they are expected to come across in the host culture (Czinkota, Ronkainen and Moffett 2009, p.42). This may include foreign language competency and cultural training. Training and pre-departure preparations aid in minimizing incidences of expatriate failure through enhanced training and selection procedures. Expatriate failure in this case refers to situations when expatriates return home from foreign assignment prematurely owing to poor job performance (Palmer 1997, p.319). Language, which infers a system of spoken or written symbols employed to communicate ideas, emotions, and experiences, plays a critical role in the establishment of an internationalization programme. Language enhances understanding on demand and culture and creates abilities to enhance customers’ satisfaction, besides enhancing and maintaining skills critical to execution of the business (Grosse 2004, p.351). Communication is crucial to the management of any organization. Language will be an essential tool in communication within the organization and driving the organization goals and objectives. Research has shown that high-level personnel with competent language skills are increasingly becoming more and more critical to corporate efficiency and success (Hofstede 1991, p.5). The implementation of global strategies is often constrained by shortages of international management talent. The complex and changing environment demands flexibility within multinationals when formulating strategic responses and adopting a cross-cultural approach, critical to attainment of an organization’s goals in the context global economy (Celaya and Swift 2006, p.230). This requires fresh standards of selection, training, and motivation for the expatriates. Expatriates have to develop their intercultural communication competence so as to deliver meaningful and productive service to their organizations. The expatriate is expected to attain control and coordination of operations, transfer knowledge, and achieve managerial development. Judgment on the recruitment of the international manager centers on aspects such as technical competence, personal traits, and ability to adapt to the new environment, among other aspects (Knowles 2006, p.620). Pre-departure training seeks to curtail culture shock, as well as aiding the expatriate to adapt to the new environment. Foreign Language and Cultural Training Needs Culture infers a set of shared values, assumptions, and beliefs that are learnt through association with a certain group, and that influences the attitudes and behaviors of group members. Culture affects people and the manner in which they live their lives; in many respects, it orders how people live their lives, besides influencing the day-to-day decisions that people make (Swift 2000, p.37). However, not all elements of culture have the same degree of significance to individuals or the society at large. Language reflects diverse assumptions regarding aspects such as time, attitude of action, and social hierarchy. Language embodies the means by which people access elements of culture in communicating with other subjects of the socio-cultural grouping (Dhir 2004, p.393). The wide range of differences encountered in interactions with people from diverse cultures makes it a daunting task for foreign nationals operating in another country. To remedy this or minimize the challenges faced by expatriates, it is essential to reinforce the management’s competencies by equipping the managers with some form of cultural orientation training prior to beginning of the duties in the foreign country. Language competence enhances customer satisfaction and is critical to enhancing intercultural communication in organizational management (Ferney 1999, p.27). Language can be considered to bring about understanding of cultures. Foreign language, in this case Spanish, is certainly crucial when conducting business operations outside the home country. Knowledge on foreign language brings about understanding of external communication, as well as enhancing interrelationships. In any organization, understanding the role of language can aid organizations to enhance coordination skills, operate new technology, meet customer expectations and needs and execute effective management (Dhir and Goke-Pariola 2005, p.241). Cultural differences among people have remained stable overtime despite the massive modernization and economic development. The persistence of cultural differences is of critical significance to multinationals, which are constantly exposed to multiple national cultures in their daily operations. Cultural differences, while difficult to observe and measure, are critical to business operations as they may orchestrate embarrassing blunders, strain relationships, or drag down business performance (Melin and Ray 2007, p.21). Managing of businesses across national borders heralds substantial complexities, as it forces multinationals to adapt their practices and approaches to each and every cultural context in which their business operations feature. The advancement of technology has propelled communication whereby communication is easily accessible, fast, and commonplace. As a result, language and people integrate and overlap freely devoid of paying regard to national boundaries or physical distances (Reeves and Wright 1996, p.38). Multinationals are multicultural in which a conception of a product may be conducted in one country, design in another country, while the production is done in multiple countries and marketed in even more countries. As a result, there are numerous relationships where cultural differences such as language, ethnicity, religion, politics, and social class become apparent. Cross-cultural differences arise from differences in values, beliefs, perceptions, and background. Benefits derived from cross-cultural training include provision of a means for conscious switching an automatic, home-culture international management mode to a culturally suitable, adaptable and acceptable one (Swift 2002, p.4). In addition, training aids in confronting unforeseen events or culture shock, besides availing a means of reducing the uncertainty of interactions with foreign nationals. Moreover, training avails a means of enhancing expatriates’ coping capability by minimizing stress or disorientation. A Comparative Analysis of Strategies that Might be Employed The magnitude of people management is increasingly becoming a critical factor, given that it has a significant bearing on the company’s profitability and capability of the business operations to succeed. Human resource management plays an essential part in developing and sustaining an organization’s competitive edge. Expatriates are employed for both long-term and short-term assignments whereby their tasks include acquiring and transferring technology, managing a foreign subsidiary, maintaining communication, and developing global competence (Thitthongkam and Walsh 2010, p.184). The selection, recruitment, and training should be tailored for the mission in order to prevent expatriate failure. Companies adopt various strategies when filling positions in a foreign establishment. The ethnocentric approach This entails filling key management positions with home-country nationals. This is motivated by the fact that people from the headquarters are more likely to possess a thorough understanding of the company’s chief competencies and values. However, the approach may lead to the company adoption of a narrow perspective in the foreign markets. This blinds the company to the advantages emanating from exposure to diverse, and probably ways of conducting business. The leading motivations to staff foreign operations with expatriates encompass maintenance of command and control, which is aligning to the headquarters policy, filling home talent gaps, employing international assignments as a mode of social integration, transferring best practices from diverse locations, countering turnover among local employees, and as a management tool critical to shaping of a global outlook (Swift and Wallace 2011, p.829) The Polycentric Approach This policy encompasses using host-country nationals to manage local subsidiaries and aid local motivation and morale. Nevertheless, this may result to problems of accountability and allegiance in cases where a gap develops between the headquarters and local operations. This approach is employed to control costs, cater to host-country nationalism, structure local management talent, and boost employee confidence. The Geocentric Approach This approach pursues the best people for top jobs throughout the organization, irrespective of their nationality. The approach is principal to companies embodying a global strategy, especially a transactional strategy. However, the approach is complex to develop and costly to sustain. In addition, the approach may be constrained by economic factors, decision making customs, and legal contingencies. Research conducted in this area has shown that being bilingual or having proficiency in a foreign language have economic advantages to both the individual and the organization. Knowing a foreign language avails businesses with a competitive edge and is more cost-effective compared to using translators (Swift and Huang 2004, p.22). The most prominent framework for categorizing national cultures encompasses Hofstede’s cultural dimensions, which reveals systematic cultural differences across four essential dimensions, which include power distance, eccentricity vs. collectivism, uncertainty evasion, and masculinity vs. femininity. There are distinct differences between English and Spanish cultures. For instance, English speaking cultures are perceived to be individualistic while Spanish speaking cultures are perceived to be collectivistic (Czinkota, Ronkainen and Moffett 2009, p.43). In addition, Spanish speaking countries score higher on the dimension of power distance compared to English speaking countries. Differences in national cultures influence business decisions such as choices about entry modes. Associated Resource Implications that the Company should consider The company should utilize meetings with the expatriates as a principal part of their training programme. Field experience, regardless of its resource implications, should be a chief element of training for the expatriates to be based in Spain. As corporations become more culturally varied, it is decisive to train people in dealing successfully with the complexities that accompany the new and different environments (Swift 1991, p.36). When assessing the significance of cross-cultural interaction, it is crucial to take into consideration three variables; these include the environment in which the interaction is undertaken, the atmosphere surrounding the interaction, and the “atmosphere” enveloping the interaction, besides the elements and process of the interaction itself (Conway and Swift 2000, p.1319). The manipulation of the stated variables is certainly of significance in the context of cross-cultural business. Culture and foreign language capability in the U.K. Outdoor company should be developed along two distinct but interconnected paths; career development path and pre deployment. The company should factor in the cost of pre-departure orientation and training (Plessis and Beaver 2008, p.166). The training is crucial as it affects the cross-cultural adjustment process in areas of work adjustment, interaction adjustment, and general adjustment. In order to permeate the stated area, it is essential to train the expatriates in foreign and culture familiarization. The expatriates and their families must receive country specific training centering on customs in the host country so as to arrest differences that might arise in culture, language, and laws. Part B: Industry Sector Organizations with internationalization programmes should pay attention to key dimensions relating to performance such as enhancing customer satisfaction, enhancing and maintaining language competency of managerial personnel, better understanding of demand, understanding culture, and capability to develop effective internal and external communication systems (Swift 2008, p.10). The establishment of foreign franchises based in Spain (Barcelona and Sebastian) demands incorporation of language and cultural training in order to enable the expatriates to cope with cultural distance. Cultural distance emanates from dissimilar cultural backgrounds of individuals who are involved in the process of interaction. The greater the dissimilarity between two cultures, the higher the cultural distance. Cultural distance has a powerful influence on the manner in which relationships develop. Psychic distance is influenced by elements such as the degree of cultural affinity, the degree of mutual trust engendered, and the degree of influence of the people concerned (Holm, Eriksson and Johanson 1996, p.1033). Culture is critical in enhancing or impeding the establishment of business relationships between executives from diverse backgrounds. Successful interaction across cultures demands cultural intelligence. There are a diverse number of factors, which have a significant impact on the individual’s ability to adapt to a foreign environment. Foreign environment adaptation is manifested when expatriates learn and maintain behaviors appropriate to the new environment. The level of adaptation influences secondary outcomes such as the individual’s performance. Expatriates are expected to understand the behaviors required for successful performance. High levels of adjustment are indicative of successful expatriate adaptation. Expatriate adaptation in this case refers to psychological comfort in respect to work, culture, and interaction with host nationals (Campbell and Dirven 1998, p.121). The expatriates should learn and attain competence in Spanish language as it may build his or her professional and personal value. This is regardless of English being prevalent in the global business world. Even in instances where foreign language is used poorly, the effort to use local language usually receives a positive acknowledgement. This creates a friendly cross-cultural environment, besides constructing a rapport with local employees (Anderson and Rasmussen 2004, p.231). The degree of acculturation hinges on general personality, the motivation to adapt, language skills, support from colleagues and host nationals, cultural distance between the two cultures, and the experiences made amid the encounter. Part C: Markets The Cultural-linguistic Environment of the Market, Spain Historically, Spain can be considered to have been the meeting place for several diverse cultures, besides it been a global empire during the colonial era. British commercial relations with Spain dates back several centuries ago, a fact that is demonstrated by UK’s investment in Spain, where it is one of the largest foreign investors. Furthermore, due to its cultural, linguistic, and economic tie with Latin America, Spain is considered as a gateway to penetrating Latin American market. Spain is largely service oriented with its chief industries encompassing tourism, manufacturing, clothing, and constriction. Spain can be considered to be culturally and linguistically distinct compared to UK, although it has shared cultural values, as well as economic with the rest of European countries. Spain comprises of a constitutional monarch, with a heredity monarch and a parliament detailing two chambers. The country’s constitution cherishes linguistic and cultural diversity comprising of seventeen autonomous communities (regions). Linguistic Affiliation and Socio-cultural Factors Spain’s national language is Spanish or Castilian Spanish, which is a Romance language flowing from Latin implanted in Iberia, especially in later stages of the 13th century. There are also other minority official languages of the nation, which include Basque, Gallego, and Catalan. Socio-cultural forces have a significant bearing on consumer’s attitudes, interests, and opinion, besides shaping consumer’s behavior (Morgan and Hunt 1994, p.20). Spain is regarded to have a considerable, complex bureaucracy, where emphasis is laid more on relationship orientation rather than task orientation. Relationship management is crucial in the culture and plays a prominent role in the business world. In addition, corporations are expected to maintain high-quality customer relationship. The expatriates of the UK outdoor company should take note of the cultural diversity alive at Spanish markets. In Spain, English language is rarely utilized in most parts of the country. Knowing how to speak Spanish can be considered as a bonus, since most Spanish businessmen prefer to conduct business in their own language so as to avoid communication problems. In addition, aspects such as family orientation, sense of identity and belonging to a group play a crucial role in Spanish culture. Spanish business culture is also rife with fear of losing face, individualism, and uncertainty avoidance. UK Outdoor Clothing Company: a Broad Cultural-Linguistic Strategy Linguistic differences create hurdles, which hamper managers’ coordination of activities and development of strong relationships, besides constraining successful performance. This is fuelled by the fact that language and culture are closely intertwined whereby individuals act and think differently depending on the language they are using (Hallen and Wiedersheim-Paul 1984, p.15). One of the approaches that the outdoor clothing company can execute embraces adopting English as the corporate language. This facilitates faster communication flows within the organization regarding both formal and informal reporting mechanisms within the individual and organizational units. This is perceived to enhance coordination, integration, and organizational learning (Ford, Hakansson and Johanson 1986, p.26). In addition, a common language promotes a sense of identity and aids in shaping corporate image, as well as giving organizational members a sense of belonging. Moreover, adoption of a common language helps organizations to avoid the hassles accompanying operating in multiple languages. Nevertheless, language standardization may cause difficulties such as burdening employees of the subsidiary and the organization at large (Burek 2010, p.29). The subsidiary may be burdened with translation of its policies, procedures, and communication. Adequate preparation helps the expatriate to adapt faster and more effectively to the new environment. The preparation encompasses bringing extensive market and cultural knowledge, language skills, and familiarity with the local business traditions (Marschan and Welch 1995, p.23). The process that may constrain a company to a standard language may in essence deny the company access to critical resources, which are unique to the members’ training and experiences. Diversity in cultural and linguistic representation may indeed avail opportunities to the global organization, which may not be available to the competitors. Hence, multilingualism is ideal to any global organization as it enables the organization to attain a competitive edge while facilitating efficient communication and minimizing misunderstanding between various units of the organization (Aijo 1985, p.32). Conclusion The reality of the contemporary global marketplace demands companies to relocate their staff to foreign locations so as to establish and nurture establishments abroad. Maximizing the success of expatriates’ success is a critical business priority as expatriates failure translates into squandering of time, endeavor, and monetary resources. 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