Infotek Company - International Business Expansion, Leadership, and Motivational Systems - Example

International Business Expansion Student’s Name: Instructor’s Name: Course Code: Date of Submission: Executive Summary Going international is the business deal where an organization wants to expand its business to international market. Infotek is a company which was founded in the year 1990 and it is among the largest hospitality companies. The company is contemplating expanding its operations to India. The reason for selecting India was that its economy is growing very fast and tourism is the third largest industry in India which implies that there are many visitors visiting India hence there is need for hospitality services. The reasons for going international include improving the profitability of the company, the Australian market became too small, to improve competitiveness of the company and improve the reputation of Infotek. The entry strategy chosen is partnership which will enable the company to adapt the Indian business culture with time. The factors that will influence the operations of Infotek in India are political, economical, technological, social and legal factors. The company will employ both local employees and the Australian employees so as to assimilate the different cultures to avoid resistance from the local consumers. There are also some issues which will affect the operations of the company and they include different legal systems, different cultures and communication problems. The company will motivate the employees through rewards at the end of the financial year and if the company improved the productivity. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Target Country: India 5 Reasons for going international 6 Entry Strategy 7 Infotek Operating Environment 9 Cultural Profile where the Company will Operate 10 Leadership and Motivational Systems 11 Issues Involved In The Overseas Development 12 Recommendations 13 Conclusion 13 Introduction Going international has been a major aspect in the management of organizations in the global business. Many organizations are contemplating of going international in order to improve the reputation of their companies. Going international improves the diversity of organizations by integrating different cultures from different backgrounds (Alan & Paloma 2011). In this regard therefore, this paper will discuss identify an organization which wants to go international, reasons for going international, the planned strategy for entering the international market, description of the environment that the company will operate in, cultural profile of the local area where the company will be operating, description of the leadership style to be employed and the motivational system which will be applied to motivate the employees and finally the issues which are involved in this international expansion as well as the strategies for tackling them. This report will focus on Infotek Company. This is a company which is in the hospitality industry. The company has been among the leading companies in Australia in offering hospitality services. Among the services offered by the company include conference rooms, accommodation, restaurants and providing places for special occasions like the weddings. The company was founded in the year 1990 in Australia and by the year 2000 the company had gained fame and had many customers. When the company started it had 70 employees who included 10 managers, 20 supervisors and the rest departmental employees. By the year 2002, the company had established many resorts in the cities of Australia like Sydney. This improved its market share from 16% to 30% of the market. This implies that the company’s size increased tremendously. As aresult of this good reputation, the company is contemplating expanding its operations internationally to compete with other firms in the international market. Target Country: India The company country the company chose to expand its operations to India. This is because India is among the most growing economies hence there are high opportunities for any company to capture. Besides the growing economy, the hospitality industry is the third in earning India foreign exchange. The hospitality industry accounts for about 6.23% of the India’s GDP (Bikram et al 2009). It also provides about 8.78% employment opportunities in India. This is a clear indication that India is doing well in the hospitality industry and the likelihood is that our company will succeed in India compared to other countries. In addition, the tourism industry is the India’s largest services industry in India. This implies that there is high potential of getting customers who visit the country to spend their holidays there. Through tourism industry, hospitality industry will also grow proportionally (Bikram et al 2009). Therefore, Infotek Company will be able to find customers who will find places to stay hence there are high chances of the company succeeding. The population of India is also high which will ensure that there is an adequate labor for the company besides being among the customers of the company. Reasons for going international For any company which wants to achieve its objectives, it needs to put strategic plans which will enable the company to succeed in the industry. Among the strategies applied is going international to compete with other international firms as well as increasing the market share of the company (Yair & Ravi 2008). Therefore, the following are the reasons for Infotek to go international; The first reason why the company is going international is to build good reputation of the company. When the company is operating in the international market, it will improve its reputation because it will practice diversity and in the process it will look more competitive as a result of comprising stakeholders from different races who have a variety of talents and skills (Alex & Joseph 2001). This will enable the company to increase its profitability which is one of its objectives. Another reason why the company has chosen to go international is the desire to increase its sales. There are many customers in the world who need the hospitality services and some customers are selecting on the places where they could want to go (Gerhard 2000). Through the expansion of the company’s services to international market, Infotek will be able to attract many customers as it will meet their destination requirements hence it will improve its market share by having a large base of customers. Through increased sales the company will achieve the objective of increasing the sales. In addition, the company will be able to diversify the sales and the diversification of supply. By expanding the business into the international market, the company diversifies the sales because if the performance of the company in Australia goes down, the sales in India will compensate the poor performance in the other market which balances the performance of the company not to make too many losses (Shaista 2010). Also the company will have a large supply base because in every market there will be suppliers and this improves the power of the company than the suppliers. Furthermore, the need to expand the company operations to international market was to respond to the market competition. There is high competition in the hospitality industry and for Infotek to be able to compete effectively it has to expand the operations (Shaista 2010). Through going international, the company will attract many customers because customers are selective in the places where they can spend their holidays thus the company provides many places to choose from unlike when it could be operating in one country that is Australia and some customers may prefer India to Australia. Therefore, Infotek Company will attract many customers and it will remain competitive in the hospitality industry. Entry Strategy The planned entry strategy for Infotek Company is through partnering. The company will partner with another Indian company which is in the hospitality industry for the first two years after which Infotek will start operating as a company of its own (Paul 2009). This strategy was chosen because the cultural practices in India and Australia are different and therefore the company has to consider cultural issues by learning them from the partner company in order to know the appropriate strategies to apply to expand the market like what promotional methods the company should use which will not provoke the people of India. The advantages of partnering strategy include the following; Through partnering operational risks will be reduced. This is because Infotek Company originated from a different cultural background and now it will operate in a different culture (Paul 2009. There are high risks of not succeeding if the company could not partner with another company which is familiar with the cultural background of the Indian people. Therefore Infotek will assimilate the new culture through partnering with Lemon Tree Hotels in India. Partnering also promotes transfer of knowledge and skills between the two companies. Infotek will acquire new skills in the hospitality industry from Lemon Tree Hotels about the recommended promotional strategies and the government regulation (Paul 2009). This knowledge will enable Infotek to design better strategies and be able to eliminate barriers. Also through partnership, the company management will be able to know the best strategies to motivate the Indian employees. Different employees from different cultures prefer different motivators therefore through partnering with Lemon Tree Hotels; the management will understand better the strategies which can be applied to improve the motivation of the employees (Attila & Bahattin 2010). Finally, through partnering Infotek will be able to manage the company effectively in the international market. The management can get new ideas on how businesses in India are managed and develop strategies which are appropriate to the Indian business environment. This will help to remove barriers which could affect the performance of the business like the marketing of the company in the new Indian market. Infotek Operating Environment Our company will operate under the Indian business environment and these factors can greatly influence the performance of our business. To start with, there is the competition factor. The fact that Hospitality industry being the third largest foreign exchange earner, it means that there is high competition (Stephanie & Patricia 2005). Infotek will compete with firms like Lemon Tree Hotels. This will lower the productivity of the company at the introduction stage but due to promotional strategies the company will be able to attract and maintain customers. Another factor is the social factor. Indian culture is very different from the Australian culture. For example the recommended marketing strategies in Australia are different from those recommended in India (Nan & Arun 2010). This social factor will affect the growth of the company because we have to take time to learn the culture before implementing our strategies fully. There is also the factor of technology. Infotek applies online booking in Australia but in India the customers are not used to online booking of the facilities and this will impact on the application of the technology (Tina & Heather 2012). The company will develop the online booking system which will attract many customers to the company’s services as they do not have to travel to far distances to book for the facilities. This will give the company competitive advantage. Economically, the company will be advantaged because the economy of India in the recent years has been on the increase (Nan & Arun 2010). This will make the operations of the business better because the company will be able to access financial resources and also the customers will spend more on the company’s services and products increasing the revenue of the company. There is also the political factor under which Infotek will operate. For a long time now India has been stable politically providing a favorable environment for businesses. Furthermore, the systems of government encourage the investment in various sectors in especially in the hospitality sector (Elynor & Bernard 1996). This will promote the performance of the company in India as the government encourages even foreign investors. Finally there is the legal factor. There are no barriers to foreign investors in India and licenses to operate a business are not discriminative. Therefore the company will be able to acquire Indian trading license hence will be able to conduct businesses without breaking the law of India. The business environment will be good for the Infotek Company to operate (Nan & Arun 2010). Cultural Profile where the Company will Operate The company will recruit local employees from the Indian market. At the management level, Infotek will employ 3 managers and 6 supervisors. The average age for the managers will be 40 years while that of the supervisors will be 35. This is because the company needs more professional people who will advice the company on the Indian business phenomenal. Other employees of the company will consist 40% female and 60% male both from the Australian labor market and the local labor market. This will promote diversity and sharing of ideas. The company will explore the local requirements for recruitment then it will start recruitment by advertising the positions available. There will be preliminary interviews to eliminate those who are not qualified according to job prescriptions. Then interviews will be done to select the best qualified candidates. After selection and induction have been done, the company will train the selected employees through departmental induction, seminars and on the job training (Levent & Mehmet 2003). This will enable the employees to be familiar with their tasks and avoid confusions which will improve the quality of services offered to customers. The kind of reception we expect from the Indian government is cooperation. According to our research, the government of India encourages investments hence we expect no resistance from the government. From the side of the suppliers, we expect some defiance because they are not familiar with our company hence it will take some time we build good relationship with them (Alan & Paloma 2011). About the reception of the competitors is that we expect harsh reception because they know that we will increase the competition hence lower their profitability therefore we expect negative reception from our competitors. Finally, we expect best reception from the consumers. Any competition benefits the customers hence they will benefit much because through competition they will get quality services and products like online booking for facilities. Leadership and Motivational Systems The leadership style that will be implemented by Infotek Company in the new business environment is the participative style of leadership. There will be free interactions between the employees and the management which will promote sharing of ideas and issues (Nan & Arun 2010). Before any decision is made, there will be consultations with all the stakeholders of the company before the top management analyses the various responses and comes up with a final solution. This will promote motivation because the employees we feel that they are part of the decision making hence they will identify themselves with the company. On the aspect of motivation, there will be rewards to employees who have performed well. For instance any team which has managed to achieve the set objective will be rewarded accordingly. Through the rewards the employees will be motivated and increase their productivity (Kristin et al 2006). In addition, there will be rewards at the end of each financial year to appreciate the efforts of the employees. In addition, there will be trainings and seminars which will improve the skills of the employees to serve customers. Each employee will undergo training at the end of every six months. This will promote job satisfaction hence motivate the employees. Issues Involved In The Overseas Development The first issue is difficult in managing the company. Global market attracts people from different cultural backgrounds which will make it hard to integrate them into one culture. For instance salary structures are different in different economies hence it will be hard to harmonize them (Satu 2007). To overcome this issue, the company will develop organization culture which is neutral to all employees. All stakeholders observe the organizational culture and forget their personal cultures. Another issue as far as we are concerned is the differences in languages. The employees from Australian labor market and the employees from the Indian labor market may not communicate well. This is because of the language patterns thus there will be difficult in communicating between the employees and the management which may affect effective management of the company (Kristin et al 2006). To end this issue, the company will offer free English training to ensure that all the employees understand the same language and phrases to avoid communication breakdowns. There are also issues with the legal systems. The company has diversified employees with different legal systems in terms of manpower relations. Therefore it will be hard to manage the company and solve issues because the employees handle issues differently from their countries (Lydia et al 2013). In this regard, it will be hard to solve issues more amicably to satisfy each employee. The company will adopt a legal system to be followed the by the company stakeholders and should be communicated to all people to ensure they all know the legal procedures to take incase there is an issue. The system will be based on the Indian legal systems. Recommendations Besides the company adopting the partnership strategy to enter into the foreign market, I recommend that it should include other strategies like exporting some of their services to India for instance management. The company should send some employees early in advance to India as employees so that they will collect the information concerning the Indian market. Through this strategy, the company will design appropriate strategies before starting to operate in India. Another strategy that should be applied is licensing. The company should develop alliances with the Indian companies so that Infotek will incorporate its services through the Indian company and later start operating as a fully licensed company to operate in India. This will create a good image of the company to the public. Conclusion Going global is a major step among many organizations in the modern global business. Among the reasons of going global include increasing the competitiveness of the company, increasing the productivity and improving the reputation of the company. The entry strategy that will be applied by Infotek is the partnership which will enable the company to learn and appreciate the new culture in the new market. Issues which are involved in the global expansion include different legal systems, different cultures and communication barriers which are all tackled with the strategies the company has put in place like English training. 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