An Organizational Culture That Would Ease to Enter into the Indian Market - Essay Example

? Expanding an MNC – Part 2 Question An Organizational Culture That Would Ease To Enter Into the Indian Market In the midst of competitive scenario related to global automobile industry, the Multi-national Corporations (MNCs) seek to expand their business locations across differentiated geographical borders. Moreover, rapid initiatives regarding industrialization along with increasing deregulatory processes of the global nations have also been witnessed to provide adequate opportunities for the MNCs to successfully establish their business units in the overseas countries. In this context, organizational culture of the MNCs plays a crucial role in terms of successfully entering the overseas nations (McGraw-Hill Education, 2013). Therefore, the following discussion would critically analyze the organizational culture of Excellent Motors; a United States based automobile manufacturing organization to ensure its capability of successfully establishing its business unit within the competitive Indian market. Organizational culture of Excellent Motors is formalized in an appropriate way which represents the workforce to competently act according to the desired business objectives of the organization. In this regard, the organization would highly focus on encouraging employees and making them motivated to efficiently increase their productivity in the Indian automobile market. Furthermore, it focuses on promoting predetermined guiding principles through incorporating health as well as wellbeing of each employee which enables them to precisely act as per the encoded direction of the organization. Additionally, the integration of equalities of the employees regardless of their geographical or demographical differences would also enable Excellent Motors to efficiently fulfill its desired endeavors in the Indian automobile industry. The process would incorporate ensuring equality for the employees through promoting cultural, racial along with linguistic differences (McGraw-Hill Education, 2013). Question 2: Environmental Scanning Analyses of India The influencing environmental factors that lay a major impact on the business performance of Excellent Motors in the Indian market can be identified as political, social, economic, technological as well as regulatory forces. Political Force: In relation to the political system of India, it is often observed that there is an involvement of multiple political parties with different political opinions. Therefore, the risk associated with political system is moderate in terms of expanding the business unit of Excellent Motors into the Indian market. In recent years, there have been certain instances when the business operational plans of certain multinationals have seen strong objections from certain politically minded elements. The objection related to foreign direct investment (FDI) can be a crucial factor for Excellent Motors in India (Singh & Gupta, 2012). Social Force: Considering the social factor, it entails elements such demographic shifts along with cultural changes of the population in a specific market. In order to efficiently cope up with and develop in the Indian automobile industry, the business strategy of Excellent Motors must entail adequate steps in order to identify the trend and cultural changes of Indian populations (Singh & Gupta, 2012). Economic Force: The present economic transformation can be considered as a major opportunity for Excellent Motors to efficiently perform its range of business operations in the Indian emerging automobile market. In this regard, the increasing rate of economic growth in terms of Gross Domestic Product (GDP) and per capita income ensures greater opportunity for Excellent Motors to expand its business unit into the Indian market (Singh & Gupta, 2012). Technological Force: India can be regarded as one of the rapidly developing as well as growing countries in terms of advancements in technological infrastructure. The apparent rapid changes due to globalization in the technological field would significantly facilitate Excellent Motors to uphold the qualitative value related to its offerings in front of the consumers that further would influence the overall operations of Excellent Motors in the respective market (Singh & Gupta, 2012). Regulatory Force: In relation to the present regulatory process of Indian government associated with foreign entrepreneurs, it has been observed that there is a set of well-build regulations which ensures their long-term sustainability in the market. Moreover, the deregulation process adopted by the Indian government also facilitates the foreign marketers to increase their investment which in turn further signifies an enhanced level of opportunity for Excellent Motors (McGraw-Hill Education, 2013). Question 3: Entry Strategies, Ownership Structure and Organizational Structure for Excellent Motors and their Justification Entry Strategy In order to successfully establish and efficiently perform business operations in the growing Indian automobile manufacturing sector, the practice of joint-venture would be quite effective for Excellent Motors. This strategy would significantly enable the organization to successfully establish its business operations due to the need for making minimum investment in this mode of entry. In addition, this entry mode would also enable Excellent Motors to derive a sense of understanding related to the Indian consumers’ tastes and preferences in a cost effective manner. It also facilitates to obtain quick access to the local distribution channels along with engaging in greater marketing practices which would further facilitate Excellent Motors to independently perform its automobile manufacturing processes (Vaughan, n.d.). Ownership Structure Ownership structure for Excellent Motors primarily focuses on maintaining a formal corporate structure while performing its automobile manufacturing operations in the Indian market. The term ‘Corporation’ is generally considered as an effective legal strategy which incorporates adequate liabilities, rights as well as privileges that enable the organization to build up a strong brand image in the respective market. Moreover, the strategy would further enable to yield or maximize the organization’s profit label which is an important aspect for the organization while seeking to expand its business units in the overseas nations. Therefore, ownership strategy of Excellent Motors mainly focuses on executing its operations as a corporation in the growing Indian automobile market (Simons, 1990). Organizational Structure A good and well-built control mechanism of an organization can facilitate the firm to have a better control of its costs, productivity, employee performances and quality of products as well as services. In this context, organizational structure for Excellent Motors primarily focuses on functional structure where the director of the firm is selected by the organizational stakeholders. In this regard, the director of the organization will be liable to manage and efficiently perform various operational roles of the organization (Simons, 1990). Question 4: Political Risk Assessment for Indian Market According to the observation, it can be stated that the political system of India constitutes multiple political parties with varied sets of ideologies; therefore, the critical identification of potential threats raised by the changing political scenarios is important for Excellent Motors. In this regard, a few of the major potential threats raised by the Indian political scenario have been mentioned below: Instability of the Governmental Bodies In relation to the political scenario of India, it is often observed that there is a continuous instability due to the changing forms of governmental regulations. Therefore, political stability of the country would be a major concern for Excellent Motors to efficiently perform its range of automobile manufacturing operations (Business Foundation, n.d.). Slowing-Down of the Decision Making Process of the Government Additionally, the adverse changes or volatility in decision making process of the government lay a crucial impact upon Excellent Motors. In this context, the issues associated with foreign investment along with other trade aspects including import, ownership as well as tax issues are considered as moderate threats for Excellent Motors while performing its business operations in the Indian market (Business Foundation, n.d.). Industrial Action with respect to Labor Unrest Due to frequent changes of governmental policies as well as trade regulations, there have been various instances of labor unrests within India. In this regard, the MNCs have also been observed to face different challenges to accomplish their desired business goals in the country (Business Foundation, n.d.). Question 5: Implementation Strategy on the Basis of above Analyses and Justification of Recommendations In accordance with the aforesaid factors associated with environmental scanning analysis, it has been observed that automobile industry in India tends to provide adequate opportunity for Excellent Motors to efficiently perform its range of business operations. Although the country entails suitable infrastructure and there has been a rapid economic growth, the facet of political instability or governmental decision making process regarding trade investments can create significant challenges for the company. Therefore, in order to efficiently cope with the potential political risks raised from the instable Indian political scenario, Excellent Motors should aim to remain focused on making effective strategic compliances with the governmental regulations along with various provisions in keeping with the trade policies of the nation. This strategy would significantly help the organization to abide by the governmental policies to mitigate various political risks. Moreover, adequate flexibility with the organizational strategy can also ensure to efficiently deal with different potential political issues as well as risks (PwC Advisory and Eurasia Group, 2006). References Business Foundation. (n.d.). Why foreign investors need to look at political risk in India. Retrieved from http://www.indiastrategy.com/polrisk.htm McGraw-Hill Education. (2013). Scanning the Market Environment. Retrieved from http://highered.mcgraw-hill.com/sites/dl/free/0073529931/782262/Chapter03.pdf PwC Advisory and Eurasia Group. (2006). How managing political risk improves global business performance. Retrieved from http://www.pwc.com/us/en/risk-compliance/assets/PwC_PoliticalRisk_052006.pdf Simons, R. (1990). The role of management control systems in creating competitive advantage: New perspectives. Accounting, Organizations and Society, 15(1/2), pp. 127-143. Singh, A. & Gupta, V. (2012). Indian automobile industry: A review. IJRMET, 2(2), pp. 22-24. Vaughan, J. (n.d.). What is a joint venture? Retrieved from http://ebook.law.uiowa.edu/ebook/faqs/what-is-a-joint-venture Read More