Globalization of a Domestic Company - Research Paper Example

Globalization of a Domestic Company Affiliation Globalization of a Domestic Company Introduction Following the rapid globalization of the world, several companies have sought to expand their operations into other nations. This is attributed to a variety of factors that have propelled the growth of businesses into multinational corporations. Among the major factors that have facilitated this is the reduction of trade barriers, advancement of technology, and most importantly, the sound performance of a given firm. In this regard, therefore, this paper will cover the expansion process of a well-performing countries into new borders. To facilitate the efficient delivery of this task, the given company will be called Sterling Limited Company. Importance of this report This report will present an intensive justification for the expansion of Sterling Limited Company into other countries. In this view, the significance of this paper cannot be underscored in tandem with core objectives of the expansion process. Primarily, this paper will present the factors that the management committee will consider in the establishment of new branches in the new countries. Through these contemplations, the committees will be better placed to narrow down to the ideal countries for the expansion. Second, this paper will analyze the importance of sending out the employees as expatriates overseas to lay grounds for the development of the operational activities in the preferred countries of interest. Factors that will influence the choice of country Investing in a given country will is affected by a diversity of factors. In this regard, it is crucial for the management of Sterling Limited Company to have an in-depth analysis of these factors. By attention to the most significant factors, this section will focus on the distance of the designated country, the cultural background of the residents, the overall knowledge of the country in question, the language classification as well as the relatives of the chosen expatriates in the new country. Distance The distance between the mother country, the United States, and the designated state for the expansion will be very crucial in the decision-making process. As a core factor of consideration, the aspect of distance will dictate the efficiency of the operations as well as the financial implications of the expansion process. Clearly, the greater the distance between the two countries, the harder the management and the more the operational costs (Ahmed, 2013). It is, however, imperative to note that this does not mean that the expansion of the operations of a given company will be limited to countries within the same geographical regions. Impediments facing the expansion of a given company across borders van be internalized through the adoption of a variety of dynamics. For instance, the organization will have to invest heavily in telecommunication and communication in a bid to ensure a smoother flow of resources from the headquarters to the satellite branches in other countries. Additionally, the use of expatriates in the satellite countries will provide a better market immersion of the company’s products. Cultural Background Understanding the cultural background of the residents in the new country is very crucial in the growth process. While globalization strives to establish a harmonious global culture, business expansion should be cautious when it comes to culture discordance. For a company to thrive in the international scope, the culture of the new country should be in league with the organizational culture. For instance, it will be a misadvised expansion move to establish a pork business in a Muslim country (Verbeke, van Tulder, & Lundan, 2014). The product of the said company will be in contrast with the societal expectations of the new country hence a business failure. Knowledge of the related countries General knowledge regarding the new country is also a top priority in the expansion process. For instance, the management department of Sterling Limited Company should observe the political nature of the country in question. For the investment to be active, the given state should have a history of political stability that is a motivational factor for investment. Additionally, the company should secure vital information regarding the tax regime in the new country as well as the labor laws. In tandem with the deployment of the expatriate strategy, it will be crucial to understanding the travel requirements as well as the terms of residence in the given country. With such knowledge in place, it will be ideal to form a partnership in the country. Languages Communication is the core driver of the development of a given company in the global context. Following the fact that Sterling Company will be engaging in expansion for the first time, it will be worthy to invest in a country with similar language. In such a case, the cost of development will be subsidized a great deal. In the event where the company chooses to invest in a country with a completely different language, its will incur translation costs as well as a complete rebranding to fit the linguistic affiliation of the new country. For this reason, it is ideal to develop the investment in a state with relatively similar language (Anguelov, 2014). Relatives in the new country This proponent is critical especially in this situation where the expatriates will propagate the expansion. Noteworthy, the expatriates are sent to the new country in a bid to facilitate the expansion process as well as the analysis of the market in tandem with the products of the company. For the importance of this proponent to be practical, there will be a particular need to define the profiles of the employees as a way of determining whether some of the employees have relations in the new country. It will be an added advantage if one of the employees has a relation in the country since the accommodation as well as mobility of the expatriates will be easier. Additionally, the relatives will help the expatriates in the market survey in the new country thus a simpler market immersion. Potential Countries Following the analysis of the key factors to be considered in the expansion process of Sterling Limited Company, it is to suggest the top countries that fit the description of the proponents. While the countries might not necessarily fit the descriptions of the mentioned proponents, this section will present a recommendation that will be the best fit for the expansion process. The first country under consideration is India. While India is relatively far from the United States, it has a fairly large market base following its vast population. On the other hand, the costs of labor in India are relatively low hence lower operation costs for the company. Additionally, India has less stringent laws regarding foreign direct investments that will act to the best interests of the expansionary objectives of the firm. Another important factor in India is the fact that the national language is English hence an easier communication between the customers and the management. The second country with equally viable investment opportunity is Canada. Canada enjoys an excellent geographical proximity with the United States. In this view, the expansion into the country will be relatively cheaper. Additionally, the legal system in Canada is relatively compatible to that of the United States hence a better investment opportunity in the country. Moreover, relocation for the expatriates will be relatively easier when it comes to investing in Canada. Therefore, the expansion of the company into the global context will be ideal in India as well as Canada. Criteria used to choose the expatriates to send to the designated countries After the potential companies are identified, it will be imperative for the business to determine the expatriates that will oversee the expansion process into the targeted countries. Primarily, the expatriate’s should have expansive knowledge regarding the mechanisms of development. Ideally, development requires intensive knowledge of market analysis, consumer profiling, political analysis, and the geographical analysis of the target countries. In this regard, the expatriate should be well-versed in various information about Canada and India. In the event where a given employee is a Canadian or an Indian native, he or she will be given preference to represent the company in the foreign meetings with the potential stakeholders in India and Canada. The first criterion in the selection of the expatriates will be centered on the skillsets of the given individual. Particular, the selected expatriate should have expansive knowledge on negotiation skills to help secure a better deal in the target country. Additionally, as mentioned earlier, the person should be aware of the most competitive marketing strategies that will help the company excel in the new market. Second, the person should be at the top management levels of the enterprise. According to the enterprise policy, people in this category have the mandate to make important decisions in tandem with the core objectives of the firm. Additionally, such persons have the power to represent the company in international meetings thus the advantage of their administrative position in the enterprise (European Commission, 2013). Lastly, it will be an added advantage if the expatriate candidate will have a relative in India or Canada. Additionally, the person must be well conversant with the language of the target country as a way of simplifying the market immersion into the destination country. Moreover, it will be an added merit if the given expatriate will have relations in either Canada or India. In such a case, the person will have better information regarding the political nature of the country, the financial obligations, tax regime, and the geographical topography of the country. Through this knowledge, the expansion of the company will be relatively easier if the mentioned recommendations are adopted. Incentives to make the expatriates go to the other countries Incentives are very vital in the development of the psychological point of view of the expatriates. In this regard, the management will be tasked to motivate the employees for them to accept the expatriate position. Primarily, most employees are motivated by the growth in their career. Therefore, the management will shed light on the importance of career growth and how the position is an opportunity to the advancement of such a plight. Noteworthy, the career growth goes hand in hand with the increase in the compensation. Therefore, the expatriates are subject to additional payments to compensate for the relocation as well as their role in the expansion of the company’s operations. Additionally, the company will ensure that the expatriates receive a promotion one the establishment of the new corporation in the target country. Strategy to ensure that the executive and the board of directors is committed to the expansion The expansion of the business into other countries will only be possible with the support of the board of trustees. The board of directors has to be convinced with empirical evidence that the expansions of the company will work to the best interests of the enterprise (Richet, Delteil, & Dieuaide, 2014). Noteworthy, the core objective of the board of directors, is to ensure that the company experiences growth regarding market coverage as well the growth in revenue. In this regard, the panel should focus their argument in tandem with the growth strategy of the firm. By expanding into Canada and India, the company will have a greater client base. A larger client base will mean that the company will secure a greater market share, which is a good sign of growth. Through the expansion of the operations into other countries, the company will achieve more considerable revenue as well as gaining a competitive edge over the consumers. This way, the board of governors will- most likely- support the expansion process following the guaranteed return on investments. Recommend two books that the expatriates should carry a. Investing in India by Shanta Acharya This book will be vital for the expatriate who will be going to India since it covers the investment laws as well as opportunities in India. Therefore, it will act as a comprehensive guide to the establishment of a new branch in the country. b. Business plan, business reality: starting and managing your own business in Canada by James R Skinner This is a comprehensive guide to the investment in Canada. Written with the modern business context in mind, the book presents a variety of guidelines regarding the starting and the management of a new business in Canada. Therefore, the book will be crucial for the expatriate sent to Canada. A two-year guide for the expatriates For a two-year stay in Canada and China, the expatriate will have to follow a particular guideline that will ease the stay. Primarily, the expatriate will have to acquire a passport and visa to travel to either Canada or India. After traveling, the expatriate will look for an affordable accommodation that will be catered for by the company. After about three months of stay, the expatriate will organize for his or her family to move into the new country. In the event where there is a provision for dual citizenship, the given expatriate will apply for such as well as that of his or her family. Moreover, the expatriates are required to travel with their clothes and other meager belongings since the furniture and other amenities will be provided in the target country. However, there will be a special consideration for the expatriates with pets in a bid to accommodate them as a part of the expatriate’s family. The company will organize for the purchase or hire of vehicles in the new country to enhance the mobility of the expatriates. In conclusion, the expansion into India as well as Canada will be effective with a good choice of the expatriates. The expansion will ensure that the company secures a greater market share and a competitive advantage in the market. Works Cited Ahmed, S. (2013). Foreign direct investment, trade, and economic growth : challenges & opportunities. New Delhi, India: Routledge. Anguelov, N. (2014). Policy and political theory in trade practice : multinational corporations and global governments. New York, NY: Palgrave Macmillan. European Commission. (2013). International trade and foreign direct investment. Luxembourg : Publications Office. Richet, X., Delteil, V., & Dieuaide, P. (2014). Strategies of multinational corporations and social regulations : European and Asian perspectives. Heidelberg : Springer. Verbeke, A., van Tulder, R., & Lundan, S. M. (2014). Multinational enterprises, markets and institutional diversity. Bingley: Emerald. Read More