Managing across Organizational and Cultural Boundaries - Essay Example

Running head: managing across organizational and cultural boundaries 10th April Question Managing across organization & cultural boundaries Due to the outbreak of fire at a Bangladesh factory that is well known for supplying clothing brands to Wal-Mart and other companies that left almost 112 workers dead, this made Wal-Mart to stipulate strict measures to the suppliers. This threat to the suppliers is to make sure that the companies that are given contract by Wal-Mart should not subcontract their work to factories that are not authorized to supply clothes to the company. The aim is to make sure that better safety to the employees and high quality clothing is supplied to Wal-Mart (Barbaro, 2007). One of the perspectives of power that Wal-Mart will use in dealing with the suppliers is the use of zero tolerance where all undesirable practices like subcontracting will be imposed to severe penalties without the company knowledge (Fishman, 2006). The penalties will start to be effective on March again all the companies that are not allowed to manufacture and supply clothes to Wal-Mart will be published on the website explaining that the company is not genuine. The second perspective is accountability and ownership of the supplier who must be certified to make sure that they are going to be accountable of what they are going to supply to Wal-Mart (Stern, 1969). The reason why Wal-Mart need accountability and ownership to a specific country is to ensure that compliance will be achieved making sure that third party agents are eliminated in the supply chain. Wal-Mart is open to any supplier who can supply clothing without subcontracting or use of third party agents who normally supply brands at expensive price as compared to those companies that are ordered to supply brands to Wal-Mart. Another perspective of power that Wal-Mart will consider is improved safety in the factories, for example, the suppliers from United States and Canada will have to meet so that the new policy change of improved safety can be deliberated upon (Buzzell, 1987). The local governments and suppliers will have to carry the safety precaution and measures need to boost factory safety. The reason is because employees in the factories are experiencing death that emanate from poor conditions from the factories and thus the reason as to why Wal-Mart is restricting the suppliers from subcontracting their orders. The expectation of Wal-Mart is that the known factory that have been given the orders will be the only one who will supply brands without involving third party agents who do not provide high quality clothing and within the stipulated time. Question 2 One of the sources of power in Wal-Mart is the management of the company where it is concerned with how factories can improve the conditions since the workers are experiencing problems while working in the factories. For example, Nova’s group is one of organizations that are trying to push companies together with suppliers and retailers to sign the first contract that will govern fire safety in the factories that are in Bangladeshi (Paul, 2010). The factories are supposed to report fire accidents and the owners of the factories to be paid $50000 so that repairs can be done to the factory. The signing of insurance coverage to the factory is another liable means the factories can use due to factory fire (Ailawadi, 1995). Another source of power is from the workers labor organizations where they are fighting for the right of workers due to death that emanate from the poor conditions in the factories and fatal fire accidents. For example, Richard Locke who is the head of political science at MIT and is an expert in the supply chains is demanding that Wal-Mart should not put excessive pressure to the factories to supply clothing and thus the companies will not observe the safety but rather Wal-Mart should provide technical assistance to the factories to run their business better. Wal-Mart might take advantage of it power since it will have to keep close monitoring to the factories and suppliers. This means that all the suppliers of Wal-Mart must be disclosed and factory inspections will have to be carried regular thus giving the factories pressure on how they normally manufacture their products. The supply of the products will be according to how Wal-Mart prefers and will no be according to the factories taste and preferences since Wal-Mart will have to dictate what they prefer (Etgar, 1972). Wal-Mart will use the power to make sure that the poor conditions in the factories are improved and the safety of workers is a priority since Wal-Mart aim is to reduce deaths that emanate from fatal fire accidents in the factories thus making sure that all factories will abide to rules and regulations that are agreed upon. Since Wal-Mart is the second company that orders clothing in Bangladesh factories, then failure to comply with the rules will mean that Wal-Mart will have to shift to other factories like German coffee chain (Etgar, 1972). The factory is known as Tchibo which sells clothes; this will mean that factories safety will be considered thus creating competition to suppliers who have complied with the rules and regulations. Question 3 As a business supplier whose business has been affected by Wal-Mart policies, I would make agreement on the supply conditions. This will mean that specific conditions must be agreed upon for example, what Wal-Mart wants in the specified time and the deadline of the supply, samples of what Wal-Mart will get, how much Wal-Mart is willing to pay and the specific date to pay (Anderson, 1991). If I have meet all the conditions relating to the safety of the factory, then insurance coverage of the employees must be considered. Termination and exclusion clause must be part and parcel of the contract that I would engage in with Wal-Mart since a notice of more than 3 months must be considered before termination of the contract. When signing the contract lawyers must be within before any transactions begin (Gaski, 1984). To deal with the giant retailer who is strict on the supply, then a notice of 3 months must be given to me before the termination of the contact and lawyers must be available to verify whether the termination is deserved and should be stipulated in the termination exclusion clause (Farris, 1992). If in any case there is a fire outbreak in the factory, certain amount of fund must be allocated by Wal-Mart to help renovate the factory and this must still be in the termination and exclusion clause failure to that then I can terminate my contract with Wal-Mart and look for another company that is willing to loan the fund to the firm. As a supplier, I would not deal with Wal-Mart since it is a giant retailer but I would engage lawyers in the supply agreements and terms of trade must be reviewed and any documents before I sign the lawyer must give directions relating to the supply. Communication is another tool that I would engage with the supplier since any dispute with the giant retailer must be solved in amicable way or one can use a mediator to solve the problem. References Ailawadi, K. 1995. Market Power and Performance. New York: New York press. Anderson, J. 1991. Partnering as a Focused Market Strategy. California: California press. Barbaro, M. 2007. Its Not Only about Price at Wal-Mart. New York: New York press. Buzzell, R.1987. Insurance Coverage to the Factories :Linking Strategy to Performance. New York: Free Press.  Etgar, M. 1976. Channel Domination and Countervailing Power in Distributive Channels. Englewood Cliffs: Prentice-Hall. Farris, P. 1992. Retail Power: Monster or Mouse? Journal of Retailing, 68(4), 351–369. Fishman, C. 2006. The Wal-Mart Effect: How the Worlds Most Powerful Company Really Works—and How Its Transforming the American Economy. New York: Penguin Press. Gaski, J. 1984. The Theory of Power and Conflictt in Channels of Distribution. Chicago: Chicago press. Paul, Y. 2010. Trouble in Store: Probes, Protests, and Store Openings by Wal‐Mart. Chicago: Chicago University Press. Stern, L. 1969. Distribution Channels: Behavioral Dimensions. Boston: Houghton Mifflin. Read More