Business Analysis of International Business Operations - Assignment Example

?International Business Operations Table of Contents International Business Operations Table of Contents List of Diagrams 2 Part A 3 Introduction3 Expatriation 3 Selection 5 Cross Cultural Training 6 Significance of Cross Cultural Training 6 Training Methods 7 Immersion approach 7 Strengths 7 Weaknesses 8 Affective Approach 8 Strengths 8 Weakness 9 Information-Giving Approach 9 Strengths 10 Weakness 10 Orientation Visits or Field Experiences 10 Training Needs 11 Language Training Needs 11 Part B 12 Industry Sector 12 Market analysis 12 Spanish Business Culture 13 Part C 14 Broad Strategy 14 Role of HR Training Manager 14 Providing Cultural and Business Communication Education 15 Training Expatriates While Still On Assignment 15 Offer Repatriation Training and Support 16 Role of the Expatriate Candidate 16 Strategy for Expatriate Success 17 Pre-departure 17 During Assignment 17 Repatriation 17 Recommendations 18 Conclusion 18 References 19 List of Diagrams Diagram 1: The role of expatriates Diagram 2: Factors that determine selection decision Part A Introduction The current global market environment requires companies to relocate workers to international destinations in order to establish business presence in foreign markets. The awareness of cultural diversity is vital for successful performance of a company in the current business environment which is characterised by globalisation. The chosen expatriates should possess the necessary skills and business accomplishments within the resident country. This is related to the assumption that if they can perform well in the native country, the same will be extended in the foreign country. However, cross-cultural diversity may downplay this notion. Maximising the chances of success of the expatriates in the targeted international market is the critical goal of any performance-oriented training manager. Otherwise, the company stands to lose valuable time, money and effort. This paper is an analysis of the foreign language and cultural training needs of expatriates of a prominent UK outdoor clothing company based in Trafford Park, Manchester. The expatriate managers are to be tasked to oversee of two smaller outdoor clothing companies that the company is planning to purchase in Barcelona and Sebastian in a five year period. Expatriation Harzing and Ruysseveldt (2004:252) define expatriates as employees who work outside their home countries. Equipping the expatriate managers with cultural competence will help them to understand how the Spanish people think, act and do business. The training skills will also enable them to identify the potential business challenges that they will face in the new markets, how to solve them, strategies that they may apply to improve working relationships in the new environment and how to harness the cultural diversity in Barcelona and Sebastian for the company’s advantage. According to Dowling and Welch (2004), expatriates are crucial to any business because they act as agents of socialisation, build networks and exercise direct control on behalf of the company in international destinations (Stiglitz, 2006). They also act as bridges between the internal and external company contexts. Diagram 1: The role of expatriates The recruiter assigned with the responsibility of recruiting expatriates should be selected according to the job requirements. Training should be designed in a manner to judge the expatriate’s intercultural interaction, flexibility, professional expertise and adaptability to the new culture (Cheng, 2007:23-38; Heffman, 2004: 114-125). It should also promote open mindedness and tolerance, experience in international assignments, language capability, family situation, motivation, positive attitude and empathy towards the host’s culture. The concept of linguistic and cultural diversity encompasses the variation that exists between people such as language, art, religion, dress, traditions, food and societal structures. According to Evan et al. (2002), a company is required to consider many factors from selection time until repatriation of the expatriates for an international assignment to be successful. The process is broken down into selection, training, arrival and support and repatriation (Gooderham and Nordhaug, 2003). Selection Some of the procedures the training manager uses when selecting the candidates for expatriation in Barcelona and Sebastian include interviews, formal assessment tests, career planning, self selection, recommendations and assessment centre (Briscoe and Schuler, 2004; Littrell and Lisa, 2006). Errors in selection frustrate the success of the expatriates in foreign markets. According to Dhir and Goke-Pariola (2002), the selection criterion will be determined by expatriation requirements, language, cultural requirements, family requirements, technical ability and cross-cultural suitability. Diagram 2: Factors that determine selection decision Cross Cultural Training The expatriates will be provided with a detailed explanation of the host’s culture that includes traditions, customs and everyday behaviours (Daniels, Radebaugh and Sullivan, 2004; Selmer, 2002). This method is crucial in ensuring that the expatriates do not feel isolated from their mother country thus enhancing adaptation to Spain. This should form an aspect of pre-departure training as without knowledge on the cultural practices of the Spaniards, the expatriate will face difficulties during their assignments. Significance of Cross Cultural Training 1. The expatriates are equipped with awareness on the diversity of behaviours across cultures and the mode of adapting to such behaviours. 2. The training entails building of cognitive cultural maps that helps expatriates to understand the reason behind the local behaviours and their effect on clothing norms. 3. The expatriates are provided with an opportunity to experience the behaviours they need to practice in order to effectively apply them in the course of their assignments. Training Methods The three main cross-cultural training approaches suggested by Stroh et al., (2004) include immersion approach, affective approach and information-giving approach (Peltokorpi, 2007:68-82). Immersion approach This is a high rigour training that is conducted for more than one month. The approach contains more experimental training that includes field experiments, simulations, sensitivity training, assessment centre and extensive language training (Chen, Geluykens and Choi, 2006). Strengths 1. Simulations will enable the expatriates to relate the theoretical attributes being presented by the trainer into realistic situations. 2. Field experiments allow on-target education that eliminates indulging in irrelevant topics. This hastens the training exercises and enhances understanding of the concept. 3. Assessment centre provides the training managers with immediate response on the progress of the exercise. 4. Extensive language training ensures comprehensive understanding of the host’s linguistic and cultural tendencies. Weaknesses 1. Computer simulation is costly as it involves the use of technology that is normally expensive. 2. Field experiments consumes a lot of time. 3. Sensitivity training requires experienced trainers who are expensive to hire. Affective Approach This applies moderate rigour training that can last for about four weeks. Activities involved include culture assimilator training, role playing, use of case studies, critical incidents, moderate language training and stress reduction training (Sharp, 2010:304-313). When using cases, reference will be made to a real life past example of a successful company investment previously conducted in Spain. In role playing the expatriates will be given an opportunity to practically act out a situation similar to the task being designed to them and device the adaptive strategies that they can apply to survive and be successful in Barcelona or Sebastian. In the culture assimilator strategy, the training manager will provide a written set of situations and instructions the expatriates might face in Spain. This strategy enables them to apply the instructions over prolonged time. Strengths 1. The strategies under affective approach actively involve the participants, equipping them with initial experience of the assignment being delegated to them. 2. Verbal expression skills are enhanced as the approach involves actual expression skills while learning. 3. Case studies enhance the likelihood of direct transfer of skills imparted during training to field practice. 4. Stress reduction imparts survival techniques on the expatriate managers that enables them cope with the changes in physical as well as cultural environment. Weakness 1. It requires enhanced and comprehensive planning to ensure that training does not lose focus. 2. Most activities involved in this approach are unpredictable in terms of outcome and consume a lot of time. 3. Stress reduction training may pressurise the trainee to perform as well as evoke emotions related to past nasty experiences. Information-Giving Approach This is a low rigour training that lasts for a short period of time. Training activities include use of interpreters, area briefings, cultural briefings, use of films, books or videos and language training at a survival level (Jun, Gentry, and Hyun, 2001: 69-377). Area briefing entails explanation of the history, economy, politics, geography and general information of Barcelona and Sebastian. Strengths 1. This approach enables expatriates to be more objective. This is because, having been equipped with necessary information on the cultural practices of the host nation, they can stand back and analyse a situation more effectively before acting. 2. Language training helps to improve communication skills. The expatriates learn to listen and understand cultural concepts without ignoring details that may lead to problems in the future. Weakness 1. The language training offered is inadequate for successful execution of the assignment and successful interaction with the cultural tendencies of the host nation. 2. Cultural and area briefing do not offer comprehensive details on the host nation. The expatriate is reduced to a passive listener with no visible objects for reference. Briefings are normally carried out within a short period of time leaving no time for queries or suggestions. Orientation Visits or Field Experiences The expatriates are provided with an opportunity to visit Barcelona and Sebastian prior to their posting. This provides them with a preliminary experience on the experience they might encounter in the foreign country. Such a visit will also introduce the expatriate candidate to the business context in Spain and help to encourage more informed pre-departure preparations. Training Needs The needs analysis of the expatriates cultural and language training can be termed as subjective or objective. Objective needs contain personal information such as nationality, home and language. Subjective requirements contain priorities, goals and perceptions of the expatriate. Language Training Needs Language training needs analysis enables the trainer to identify: The current level of the expatriate’s language skills. The need level and urgency as judged by the participants’ skills. The information on the personal communication needs the recipient is willing to acquire. The time management schedule for the expatriate in relation to availability for training sessions. The suitable courses that need to be incorporated in training for competence. Analyses will be undertaken through discussions, interviews and diagnostic tests. The results of needs analysis are used to set realistic training goals, shorter training durations, and specified contents and improved learning strategies (Gupta and Govindarajan, 2000: 473-496; Swift, 2008). Part B Industry Sector Market analysis According to Hassler (2003), Spain is the fourth largest producer of textile products. Therefore, the expatriates have an uphill task of establishing new market in the already competitive clothing industry in Barcelona and Sebastian. The market should target young men and women who are culturally viewed as trend setters. Most of them are also at a better position of acquiring new source of revenue that they normally spend on fashion. Nice dressing is also required for them to look impressive. It is imperative for expatriates to attain language expertise as statistics indicate that the literacy rate in Spain is 97.9% (Alexander, Rhodes, Myers, 2007:444). The barriers to establishment of new markets in Spain include regulation and laws whereby the industry follows forms of design protections as stipulated in the European Commission restrictions on community design. The regulations respect the community cultural practices and view on fashion. Therefore, the cultural diversity will require an extensive research and expatriate training to establish the required fashion designs and the limitation on the establishment of a competitive advantage through uniqueness in design. Spanish legislation requires that an international company must exhibit proof of having overcome bureaucratic and legal issues for it to qualify for registration. Spain is a hugely diverse country with many languages and vast culture. Therefore, expatriates will require extensive training on culture and languages to maximise their potential in reaching out to more markets and customers. The unemployment rate is increasing with research indicating that it rose from 8% in 2007 to 20% in 2010 (Birnbaum, 2005). The trend of unemployment is a plus to the company success as more people will be willing to apply for jobs, even at a less pay. The current economic down turns and lacklustre business styles pose problems to the fashion industry. The market also uses Euros that are currently facing currency instability. The company should handle their financial transactions using more stable currency such as pounds. They should also introduce new improved clothing designs that are culturally pleasing to establish a competitive advantage in the currently competitive fashion industry in Spain (Kotler et al, 2001; Hodgetts and Luthans, 2003). Spanish Business Culture The working hours vary across Spain. Most offices open at 09.00 and close in the mid-evening. However, the European culture has changed the business traditions in Spain. Business appointments are normally confirmed through fax or letter before hand. The workers are normally conscious of matters pertaining punctuality. The business culture values hierarchy and position, therefore, an employee should work with people of the same rank. Authority is normally given to the person of the highest rank. Business problems are dealt with at a lower rank before being transferred to higher authority. The cohesive cultural tendency of the Spanish is extended in the workplace where most employees establish working relationships. The expatriates should possess teamwork skills that enable them conform and adapt well to the Spanish culture. Most business negotiations are normally based on trust and accountability. The Spanish business culture is normally emotion-directed due to their sense of animated means of expression and sense of personal space (Hveem, 2006:294-305). Part C Markets International business is currently complex than ever before. The success in all sectors is weighted in global terms. Expatriates are concerned with the eminent role of establishment of new markets and business expansion (Chelliah, Sivamurugan, Sulaiman and Munusamy, 2010: 3096-3109). Expatriate training and education is a crucial strategy in ensuring effective communication and international business success. The key to improving success of the expatriates in the stipulated assignments is for the training manager to understand the interaction between selection, training and development phases. Broad Strategy Language forms part of a community’s culture, which in turn affects the work adjustment of an expatriate. Managers would be in a better performance level if they conduct business in Spanish language while in Sebastian or Barcelona compared to doing the same in English. Success in expatriate training requires the input and commitment of both the training manager and the expatriate candidate. Role of HR Training Manager The training managers should ensure that the right candidates are selected for the overseas assignment. Language and cultural training should involve language courses, cultural communications, international business development and the assignment required of them (Swift and Huang, 2004:21-40). The training should focus on the expatriate’s business obligations with minimal information on family issues. The training should commence with focus on cultural issues that lay a foundation on emphasis on communication and avoidance of cultural conflicts. Training should be characterised by comprehensive programs that will offer support during the length of the assignment. The training should be concluded with repatriation. Providing Cultural and Business Communication Education The basic training for the expatriates should focus on Spain, which is the host location. They should be made aware of laws, language and culture of Barcelona and Sebastian. The strategy should be executed effectively to enable expatriates conduct business on behalf of the company without unnecessary delays or misunderstandings with the Spanish authorities. The HR training manager should incorporate the mother company’s communication abilities with expatriate training to establish a connection to the international business culture. Training Expatriates While Still On Assignment The assignment introduces the expatriate to the applicability of skills that were being imparted through training. However, more training should be extended to enable expatriates seek solutions to unexpected pros. The training manager should connect the expatriates to professional consulting service that offers constant training throughout the five year period. In this case, Global Integration or Global career centre may be approached to offer such services (Lee and Wong, 2006). Offer Repatriation Training and Support Companies that offer training support and repatriation attract expatriates. The training manager should ensure renewed services of the expatriates through offering extra services such as family housing and educational needs for their children. The expatriates should be linked directly to company’s website to access support in case of any challenges. This will motivate them thus, boosting their performance. The impact of a training exercise can be rated through successful completion of the assignment (after five years in this case), demonstrable mastering of other people’s behaviour, exhibiting cultural competence skills, job performance ratings, the academic performance, contribution to the company strategy, technical awareness of the host culture and sensitivity to cultural differences (Branine, 2005:459-472; Browaeys and Price, 2008). Role of the Expatriate Candidate Expatriate originating from English speaking nations such as the United Kingdom to non-English states such as Barcelona, should realise that learning the language and cultural practices of the host nation is part of the assignment. They should engage the community in the initial stages of the process to ensure that their role does not conflict with cultural requirements. The expatriate should involve community leadership and respected community members to build trust and loyalty with the host residents. They should realise that successful training requires time; thus, patience is eminent. The expatriate should engage in community, cultural initiatives to acquire more knowledge on the cultural practices and language patterns of the host residents. This attitude is eminent in the clothing industry as dressing is a crucial aspect of community culture. The candidates should make sure that they possess written or electronic version of translated language of the host country for future or emergency reference. They should demonstrate respect through acknowledging the community cultural protocols and beliefs. The expatriates are also obliged to provide feedback on the outcomes of their assignments. Strategy for Expatriate Success Pre-departure Select a candidate who is willing to become an expatriate. Maintain simple and consistent policy. Provide consistent support to the expatriate. Choose the best expatriate. Provide a realistic orientation to the expatriate. Organise a pre-assignment trip. Offer continuous training program. During Assignment Provide abundant to knowledge of the local language Apply mechanisms that will prevent the feeling of homesickness Cultivate unity among the expatriate and local staffs Repatriation Enhance the value of international experience Some of the challenges encountered when conducting language and culture training include difficulty of selecting the right candidates and inadequate information on cultural diversity in Spain among other factors (Holden, 2002). Recommendations Expatriate training and education is a crucial strategy in ensuring effective communication and international business success. To effectively attain competent cultural and linguistic skills, the managers should not assume cultural differences until similarities in practices have been proven. They should practice empathy and focus on description rather than evaluation. Personal interpretations of culture should be treated as theories subject to change. They should exercise the acquired cultural and linguistic competency concepts when handling the new employee dispositions. They should always beware of the company’s policies and perspectives on cultural and linguistic values that commensurate with the company’s success strategy. Conclusion International business is currently complex than ever before. The success in all sectors is weighted in global terms. However, success in working with people from different culture is difficult. In order to succeed in foreign markets, effective communication is eminent for establishing a culture of mutual respect, trust and understanding. Language and cultural training will help the expatriates understand the culture of the target destination and equip them with adaptive strategies that support them when they feel vulnerable. 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