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Management of International Business: Holder Construction - Essay Example

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The essay "Management of International Business: Holder Construction" focuses on the critical analysis of the major issues in the management of the international business, i.e. Holder Construction company. It began in 1960 and offers construction services to clients…
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Management of International Business: Holder Construction
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? Management of International Business and Number Management of International Business: Holder Construction Company The firm is a construction company known as the Holder Construction Company. The company began in the year 1960 and offers construction services to clients (Holder Construction Company n.d.). The mission of the company is to ensure clients get construction services of high quality. It is committed to ensure that construction projects are completed effectively and efficiently. Holder Construction Company is a lead company with over fifty years experience in the area of construction. The company is also committed to meeting deadlines following a well organized work schedules. Most of our clients are referred to the company by previous clients indicating that we offer quality services that are customer satisfactory. In addition, it demonstrates that the company is committed to its work and very reliable besides the good customer relations that the company has established. This is the main reason why the company has continued to be relevant over the past fifty years. The company has incorporated sustainability principle in its principles. It utilizes construction materials efficiently and effectively to ensure that there are no adverse impacts on humans and detrimental effects on the environment following the company’s activities. The company has a deep understanding on the need for development that is sustainable. Our construction activities meet the international standards of construction with a long term vision of conserving ecological systems. Holder Construction Company advocates for environmental impact assessment in order to weigh the costs and benefits that are likely to accrue from the development projects. In addition, the company has employed accredited environmental health officers who are experts in the area of environmental impact assessment as well as environmental audit that can be offered to assess if the environmental mitigation measures that were recommended are being achieved. The company is committed to its social responsibility. It is responsive and follows requirements that have been recommended by intergovernmental regulations. For instance, The Rio declaration on Environment and Development, Participatory Principles, Sustainability Principle, and The Precautionary Principle among other environmental principles and policies. Holder Construction Company has a department that drives its goals and mission of implementing sustainability development and Corporate Responsibility through its Sustainability Development Department. The department has a sole responsibility of giving the necessary advice required prior to the actual construction and during construction. This indicates how much we attach a lot of value in efforts towards Corporate Responsibility. The company holds sustainable practices at heart. Corporate Social Responsibility Corporate Social Responsibility, also known as Corporate Citizenship, is a framework that is used to evaluate a company’s performance against parameters including social and environmental parameters including economic parameters. The main aim of Corporate Social Responsibility is to ensure there are sustainable activities in business organizations and entities which require healthy economies, communities and markets (Barney1991). The policies of a company that are adhered towards certain goals are its Corporate Social Responsibility. The norms of the organization may be aimed at either improving the environment or reducing the impacts of its activities that are deemed dangerous in the long run. The Corporate Social Responsibility therefore is policy functions that are built in, a means of self evaluation mechanism in order to monitor the compliance to international norms and regulations. It is also used for assessing compliance to a country’s laws on certain matters of interest and ethical standards. The aim of Corporate Social Responsibility is the embracing of the organization’s activities and actions. This is very important as the organization can review itself to see whether it is geared towards the Corporate Social Responsibility. In addition, the company or the organization is enabled to create a positive effect to the general public through the initiatives it undertakes on the society, environment, workers and the stakeholders and the public in general. At Holder Construction Company, there are a number of activities which have been rolled out in order to give back to the community and promote the well being of the public. The company values both its clients and the society who have in one way or the other contributed to its success throughout the time it came into existence fifty years ago. This is the reason why the company rewards the community through its Corporate Social Responsibility. So far, the Holder Construction Company has encouraged community development and growth since it opened its Sustainability Department that is technically overseeing the compliance to the company’s goals of Corporate Social Responsibility. It has also dropped the procedures and activities that were seen to have likely harmful impacts on the general public. This has seen the company adopt new procedures that are energy, water and material efficient in order to reduce the social costs that the society bears. The company also advocates for capacity building with other key players and has been involved in supporting nongovernmental organizations concerned with environmental conservation. The company’s philosophy advocates for sustainable practices since the human economic activities are sustained by the environment. On the other hand economic activities have negative externality on the environment. The company adheres to environmental taxation. It has never evaded payment of environmental taxes like the carbon tax. Carbon tax is a form of environmental taxation which is charged on the fossil fuels depending on the carbon content level. In a way it is the pricing of carbon which is contained in all fossil fuel. For example, natural gas, petrol and coal. When fossil fuels are combusted, they give out energy and emit carbon IV oxide as a by-product. On the other hand, there are energy sources like solar power, wind power, nuclear power and hydro-power which do not release carbon IV oxide (Harman1967) In addition to that, the Holders Construction Company normally carries Environmental Accounting in order to evaluate the costs it incurs following its environmental conservation activities. By carrying out Environmental Accounting, the company is able to weigh the costs associated and the intended goals that the activities were aimed at. For instance, what are the total expenditures that the company has used to plant trees and what is the value of the social benefit. The company has a tradition of revealing the results of its environmental accounting to the public and the stakeholders. This gives room for the general public to provide their view which is normally in corporate into the decision making. The key components for corporate Social Responsibilities at Holder Construction Company include: progressive self interests; accountability and transparency; trust; and the ever increasing expectations from the public. The company tries to contribute to the efforts by other agencies to realize the integration of environment, social and economy. Core Competence of the Organization The organization’s core competencies are the underlying set standards and ways of carrying out activities (Carves 1985). It also refers to established ways of handling challenges of the day to day running of the company as they as they are provided for. This are normally set by the top management while the first line managers are concerned with setting out the deliverables that when undertaken makes the organization to move towards the set goals. Core competencies enable the agency or the organization to continue providing quality services to the clients. Core competencies broadly support the manufacturing or production and delivery of products and services (Hence enabling access to a number of different markets). In addition, core competencies of organizations are vital in contributing to how clients perceive the services of the business entities and its products or goods. They enable customer satisfaction accordingly. They are also generally difficult to be imitated by other business rivals because they are in cooperated into the plans and traditions of the organization. Core competencies are like the organizations culture of doing something. A culture of another organization are very difficult to copy because they may not be defined in the rules and regulations and do not have a clear order. Core competencies are very important in that they offer good terms of references for new services. In addition, core competencies help the managers to evaluate the viability to the new services. They are the face of the organization as they show what the organization is good at, what is valued by the clients and also what is difficult to be imitated by the competitors of the company. The difference between the Holder Construction Company and the others in the construction market is the big work force the company has. The company boasts of its project experience which dates back to over fifty years ago. In addition, the company has made tremendous efforts in ensuring there is Sustainable Development in the country. There are about thirty projects which are LEED certified while others of the same number are in the process of getting certification. The Holder Construction Company is the leading builder of LEED-Data-Center in the entire country. The company participated in the building of the very first LEED-Certified-Data-Center, LEED-Gold –Data-Center and LEED-Silver. The company was also the first to build an LEED-Commercial-Interiors-Platinum-Certified project. Currently, over eighty one percent of the company’s projects have been registered under Green-Globes-Green-Building-Rating-Systems and the LEED. The company uses technologies, building materials and construction methods that have high efficiency and minimal by-products hence decreasing the amount of resource wastages. By adopting construction methods that uses minimum resource input to achieve the maximum output, the Holders construction company embraces the sustainability principle. Green construction is the use of processes which are environmentally responsibly. That is, do not destroy the environment in the long run. The recourses are also efficient in their use right from the beginning to the end of the construction face. In addition, they are also efficient during the operation, renovation and maintenance. The practice of green building complements and expands the needs for durability, comfort, utility and economy. In the Holder Construction Company, the services offered before construction is unique to the building industry. The company has an ability to construct quality buildings because it is focused to the success of the project right from the pre-construction phase. The company takes unique approaches with high values thus giving the clients assurance during pre-construction phase that the company is focused on capturing, understanding and carrying out their conceptual work. The company also has strengths in limiting the chances of occurrence of risks and account for every cost of the buildings. The company is also dedicated to help the clients to plan, make schedules, design and budget in a way that ensures the project is successful in the long run. The company has an objective not only to operate in the country but to expand to other countries as well. Currently it is considering opening a branch in Singapore. Internal capability The rise of demand for construction and expansion in the construction sector is a new wave of doing business. Therefore, strategic management professional, entrepreneurs and policy-makers are critically studying the conditions that enable an organization to expand and create more wealth through venturing in new areas. In spite of the theoretical importance and deep interest in creation of wealth, studies conducted earlier have looked at the process with no scrutiny of the underpinning entrepreneurial. For instance, there are no insights with wide scopes that capture the important conditions of venturing in new areas. Other studies have also documented that idiosyncratic internal-resources are a basis for a long lasting competitive advantages. The entrepreneurs as key players in new ventures have been studied over the years. The qualities of consumers that make them realize success are the personal characteristics like the spirit of entrepreneurship and attitude, the personal and interpersonal skills, the sector and company experiences and lessons from previous activities. (Kazanjian 1988). The attributes of the founders are in addition the key resources that are required to venture into new business or expand into new locations (Dollinger 1995) In spite of the significance role of founders, several reports, for instance by (Brockhaus 1982) and Schoonhoven (1990) have strongly indicated attributes of management like level of division of work, size of the management team and the heterogeneity of members in the functional backgrounds. Entrepreneurs normally design and operate their new business to develop a market position with products and services which are new or to replace the existing players with cheaper price and more quality. Such activities or processes are similar to creative destruction practices (Schumpeter, 1934) and described as entrepreneurship. Construction industry The industry in which the Holders construction company operates in is the construction industry. This industry is concerned with repair, demolition, renovation, alteration and erection of buildings. The characteristics of the construction industry depend on the types of the outputs, the size, the purchasing power parity of the country, the human development index, the demand characteristics for construction services, the type of technologies available in the country and the type of construction expected and the industry structure. Currently there is a lot of demand for construction services both from the government and private individuals. This can be attributed to the increase in the economic growth of the country and the rise of the human development index. The government is committed to creating an impact to lives of over a hundred million people who do not have housing tenure. This has led to high demand for construction services. In addition, government policies and regulations require that companies and industry must ensure housing allowance laws are well adhered to. The construction sector in the country is one of the largest growing employers in the country. Its annual growth rate has been projected to approximately 1.3 percent for the last ten years. In addition, it has so far created new jobs amounting to about a million besides being the employment sector that employs a variety of occupations. This explains why the construction sector was targeted by the High-growth-job-training-initiative. Other economic sectors also rely on construction sector to construct and maintain their facilities. The construction sector is also relied on by other sectors to build the necessary infrastructure that are important to their daily operations. Similarly, other occupations depend on this industry. For example, electricians, surveyors and the carpenters depend on the construction activities. There are various kinds of businesses that operate under construction industry. These include the building contractors, engineering works like utility systems and highways. There are categorically three sectors involved in construction namely building contractors, civil engineers and the trade contractors. In particular, the construction sector accounts for over 4.4% of GDP. The industry is an employer of over 28% of workers manufacturing sector. This accounts for 5.2% of the workforce in the country. Employment in the construction in the sector is predicted to reach 7,745,400 in the year 2012. This is the only industry that is expected to grow than the others. Although the growth of the household may be slower in the coming years, residential construction demand is predicted to be on the rise. Demand for second homes and houses which are larger with more features, will continue to be on the increase, since baby boomers have reached the years of peak earning thus can manage to spend more resources on building houses. Another factor that will make the demand for more houses is the ever increasing immigrants in the country. In addition, more rental apartments are going to be on more demand. Non residential constructions are also expected to rise in order to replace the numerous old industrial building that has become inefficient over the years. Many buildings that house the industries were built years back yet there has been technological advancement in types of machines. Furthermore, industries are expanding and handling more voluminous raw materials and producing more products. The government has also increased the money allocated to the building of additional bridges, highways and construction of streets. These facilities on the other hand require continuous repairs and maintenance to limit their depreciation. Construction of new hospitals, convalescent homes and nursing homes are also expected to increase due to the rising number of the elderly population attributed to the high life expectancy in the country. In addition more hospitals are being equipped with facilities that have high technology. Similarly the education sector is also expanding leading to more schools being constructed to meet the increasing number of pupils and students. Expansion of the company The Holder Construction Company is considering expanding to Singapore in order to look for better markets. Singapore was the chosen among other listed countries because is a country with unique business environment that protect property rights. When property rights are well defined and protected, the risks of a business undergoing extra costs to defend its properties are avoided. In addition, innovations and intellectual property rights are respected. Singapore has an independent judicial system with no interferences from the executive indication the investors are assured of the safety of their business entities. Tax review in Singapore reveals income taxation territorial with low taxation on corporate incomes. There are also a number of tax incentives which bring about the reduction of taxation on corporate income. In addition to this, capital gains are not taxed and there are liberal rules that advocate for capital allowance set-offs and requirements concerning group relief. Moreover, in Singapore foreign tax credits are available. Foreign income source in Singapore are exempted from taxation. Other considerations made include political stability, transparency and government accountability, and investor friendly and pro-business government, availability of sufficient work force which is highly educated (Schafer 1990). It is also easy to set up an industry or a company in Singapore. Setting up one is said to take only three days to process the required documents. The government of Singapore has relaxed its regulatory requirements. In addition, there are over thirteen Free-Trading-Agreements. References Barney. J. B., 1991. ‘Firm resources and sustained competitive advantage’, Journal of Management, 17, pp. 99-120. Brockhaus, R. H. (1982). ‘The psychology of entrepreneur’. In C. A. Keneth, D. L. Sexton and K. H. Vesper (eds.), Encyclopedia of entrepreneurship. Prentice Hall, Englewood Cliffs, NJ, pp. 39-72. Bruderl, J., P. Preisendorfer and R. Ziegler (1992). ‘Survival chances of newly funded business organizations’, American Sociological Review, 57, pp. 227-242. Caves, R. E., 1985. ‘International trade and industrial organization: Problems, solved and unsolved’, European Economic Review, 28, pp. 377-396 Dollinger, M. J., 1995. Entrepreneurship: Strategies and resources. Irwin, Boston. Harman, H. H., 1967. Modern factor analysis. University of Chicago Press, Chicago. Holder Construction Company, (n.d.) .Adding Value for Over 50 Years. Retrieved from http://www.holderconstruction.com/Pages/default.aspx on 18 April, 2011. Kazanjian, R. K. (1988). ‘Relation of dominant problems to stage of growth in technology-base new ventures’, Academy of Management Journal, 31(2), pp. 257-280. Schafer, D. S., 1990. Level of entrepreneurship and scanning source usage in very small business, Entrepreneurship Theory & Practice, 15(2), pp.19-31. Schoonhoven, C. B., K. M Eisenhardt and K. Lyman (1990). ‘Speeding products in market: Waiting time to first product introducing in new firms’, Administrative Science Quarterly, 35(1), pp. 177-208. Schumpeter, J. A., 1934. The theory of economic development. Harvard University Press., Cambridge, MA. Read More
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