Incorporating Operations and Global Management at Golden Furniture - Case Study Example

?Program project: Incorporating operations and global management Impacts of global economy on the business One of the impacts of the global economy on the business is availed strategies in the global market for expanding the business’ scope. Entry into new international market segments can be achieved through franchising or direct investments. This would involve transfer of resources to the foreign country. Global venture however identifies the need to build relationships with people and enterprises from different cultural backgrounds and this identifies cultural diversity as a major feature of the global business environment. It may expose the enterprise’s regional branches to different cultures with different needs for building relationships. Effects of cultural diversity may hinder the expansion drive, especially if the organization does not implement global management strategies. Exporting employees to the regional branches may develop a cultural gap and reduce the enterprise’s ability to relate with and capture regional markets. Cultural factors and associated communication barriers will be significant to this but can be resolved by ensuring cultural awareness and cultural intelligence among employees besides recruiting locals at different levels of the business structure at the regional sites (Larson, 2007). The general perception that people have on a producer’s country of origin is another factor to the business in the global market. Target markets from different regions will assume general standards that they have associated with the business’ domestic market and products to be representative to the business’ product. While most countries have high regards for products from the United Kingdom, the perception varies from one region to another and may be further influenced by political and religious factors. The business is for example likely to receive a negative brand identity in countries and regions whose political and religious views are not consistent with views that are widely held in the United Kingdom (Larson, 2007). The global economy’s diversified legal environment is another factor to the business because each territory in the global market has its domestic laws that may be inconsistent with laws in the United Kingdom, the business’ domestic market, and laws in other regional markets in which the enterprise will operate. Such differences challenge organizations and their managers’ initiatives. Poor knowledge of legal provisions in each segment of the international market that the enterprise explores can therefore lead to legal liabilities and litigations against the business. The global economy will with this respect restrict the business’ operation and force it to employ legal experts in the jurisdiction’s legal environments (Larson, 2007). Effects of globalization on economic growth also have direct impacts on the business. Even though the growth has not been uniform across international market segments, it is significant in some segments and this is visible from trends in gross domestic product and per capita income in some countries. This growth identifies markets for the business and therefore facilitates its expansion (International Labor Organization, n.d). Globalization also offers significant competition in possible markets that the business may explore both domestic and foreign markets. Its characteristics that have connected manufactures and supplies with consumers from different regions means that each possible market is open to any supplier who is either existing in the market segment or may explore the market in future (Kayode, 2012). The business therefore faces significant competition but also has many opportunities for exploring potential market segments. Workforce management Organizational structure The business will have its head office with its top management team in London. The team will comprise of the Chief executive officer, a managing director, a general manager, and line managers for different regions. The line manager will be based at the business’ head office but will coordinate operations in their respective regions with frequent travels to their regions. Each region will further have a regional coordinator who will be responsible for all operation and will report to respective line managers. Branch manager position will be the lowest managerial position in the business and will be responsible for each branch’s activities. The managers will coordinate procurement of raw materials, recruitment of human resource, ensures sales and marketing initiatives, and oversee operations processes besides developing and retaining employees. The managers at the different levels will work collectively, facilitated by the current state of technology. Staffing and personnel plan Golden furniture will apply traditional human resource practices, together with cultural awareness and intelligence in the global environment to ensure an efficient human resource base. Further, measures will be taken to ensure development of existing employees and their retention in the organization. Recruitment will adopt a triangulated approach with the aim of diversifying probability of recruiting innovative and dedicated personnel for the organization’s objectives. Recruitment of employees for managerial positions will be done from existing human resource base that will be scrutinized and the most successful candidate considered for promotion. Recruitment of non-managerial staff, however, will be done through diversified avenues that will include newspaper advertisements, recruitment companies, and consultancy firms. Regional managers will be responsible for coordinating the recruitment process. The recruits will then be scrutinized and successful ones subjected to direct interview by a team that will consist of the responsible regional manager, branch managers in the region and two independent human resource management consultants. Once incorporated into the organization, employees will receive periodic trainings towards creativity and innovation, and interpersonal and cross-cultural potentials. Employees will further receive reward that is based on performance, to motivate them into higher level output potentials and improve their job satisfaction (Mayhoffer, Brewster and Morley, 2012). Regional and branch managers will also receive trainings on cross cultural management that is a challenge in the global environments. Core to the trainings will be concepts of cultural diversity, cultural awareness and cultural sensitivity with the aim of successfully integrating the managers in different cultural set ups and attaining successful operations (Regis, 2008; DuBrin, 2013). Local people will also participate in branch and regional management on either consultancy or contractual basis. Risk analysis Integrating many approaches in recruiting potential employees will diversify the process and increase chances of obtaining the desired qualities for the business. Direct interviews for selecting the recruits will further allow for scrutiny towards attaining objectives of the selection process. While these processes ensure that suitable candidates are absorbed into the organization, training and reward packages ensure a quality human resource base with limited employee turnover. Golden Furniture’s staffing and personnel plan will therefore mitigate risks of poor quality human resource base and employee mobility besides ensuring effective cross-cultural management. Sourcing The enterprise will purchase its supplies from established dealers in the globalized market. The decision to purchase, instead of self-reliance, arises from the scope of the required materials such as different types of plants’ products, metals and minerals, whose harvesting and mining, respectively, would be uneconomical for the regional sizes of the business. The business will contract different suppliers based on quality of their products and terms of their offers during each procurement exercise. A list of the best global suppliers and a close relationship with the selected entities will however be maintained. Sourcing for the materials will be undertaken at regional level and supplies conveyed to each branch according to their communicated level of need. Procured stock will also be stored at regional warehouses and delivered to the branches on demand. Sourcing will further be done globally because of the associated advantages. Globalized outsourcing offers the benefits of specialized production process for high quality as compared to local materials whose production processes may lack specialization into quality (Dubrin, 2008). The outsourcing strategy also offers opportunities for cheaper products because of comparative advantage in production processes. Each raw material will be sourced from a supplier who will be able to meet cost, time and quality needs of the organization. The high level of competition in the global market will empower the business to leverage supplier networks towards desirable terms of service. This is because existence of many suppliers will allow the business a freedom of choice that will in turn intimidate each supplier to compromise positions in order to secure the organization’s contracts. The organization’s approach that procures materials for an entire region also identify its bulk purchases, a feature that is attractive to suppliers and influences their terms because of the involved economies of scale (Dubrin, 2008; Rao, Rao and Sivaramarkrishna, 2009). The proposed sourcing strategy will therefore be effective and will exploit advantages of globalization such as availability of cheaper and quality supplier and enhanced consumer power. Global opportunities for growth Venturing into the global market through decentralized operations identifies the business’ opportunity to grow in the global market. Comparative advantage, as a characteristic of globalization, will allow the business to explore different markets, their costs of production, their demand potentials, and their market prices for finished products. This will also allow the business to produce its products, centrally, in markets with the lowest production cost and export to other markets. The global approach further has the opportunity for lower selling prices towards competitive advantage in different markets, especially against competitors who produce their furniture locally. Even though this strategy is not on the enterprise’s top agendas, it offers an opportunity to market expansion and to an expanded profit margin (Dubrin, 2008). Business operations risk management Business operations risks recruitment and selection of poor individuals into the business, contracting unreliable suppliers and failure to develop cross cultural management skills among the business’ managers. Involved risks in the human resource base are likely to compromise effectiveness of employees and consequently reduce productivity levels. The risks can however be managed through appropriate leadership and management techniques to influence and control employees to desired behaviors and productivity levels. Terminating employee’s contracts, subject to local laws is, however, a last resort to managing the risk. Risks from defaulting suppliers can however be managed through investigating their background information before contracting, ensuring legal contracting formalities and retaining significant percentage of payments until deliveries are made. Even though significant risk factors exist, they are manageable to prevent occurrence of the risks (Ramroth, 2007). Ethics and legal issues: Social responsibility Workforce management, sourcing, and supply chain management identifies both ethical and legal issues. Legal issues arise from contractual relations and political regulations in every territory while ethical issues arise from contractual relations and effects of the business on its immediate societies. Contracting against legal provisions such as cases of child labor, violation of labor laws and contractual obligations are some of the legal aspects that will face the business. Potential ethical issues include sales of defective products, poor environmental concern, and cultural insensitivity in the enterprise’s ventures (Dubrin, 2013). Conclusion The global business environment offers potential impacts on the business. Some of the effects such as expanded operational scope, wider market, availability of cheaper and high quality resources, bargaining power, and possible low production cost are beneficial to the business. Cross cultural challenges, different legal environments, risks in operations, sourcing and supply chain management are however challenges, though the involved risks can be managed. Exploring the global environment will therefore benefit the business because the associated advantages are more significant that challenges that are also manageable. References Dubrin, A. (2008). Essentials of management. Mason, OH: Cengage Learning. Dubrin, A. (2013). Leadership: Research findings, practice, & skills. Mason, OH: Southwestern. International Labor Organization. (n.d). Globalization and its impacts. International labor organization. Retrieved from: http://www.ilo.org/public/english/wcsdg/docs/rep2.pdf. Kayode, O. (2012). Impacts of globalization on human resource management. Science Journal of Business Management (2012.3): 1-4. Larson, P. (2007). International growth patterns remain strong. In F. H. Maidment (Ed.), International business (14th ed., pp. 150–152). Dubuque, IA: McGraw-Hill Contemporary Learning Services. Mayhoffer, W., Brewster, C. and Morley, M. (2012). HRM in Europe. Burlington, MA: CRC Press. Ramroth, W. (2007). Risk management for design professionals. New York, NY: Kaplan Publishing. Rao, C., Rao, B. and Sivaramarkrishna, K. (2009). Strategic management and business policy. New Delhi: Excel Books India. Regis, R. (2008). Strategic human resource management and development. New Delhi: Excel Books India. Read More