Global Expansion of an International Business - Essay Example

R.Preeti 25/11/2007 INTERNATIONAL BUSINESS EXECUTIVE SUMMARY International Business has gained immense importance today, thanks to the development of foreign policies, foreign relations and globalisation. Foreign Trade has received great impetus due to these factors and companies looking towards expanding their organisations are employing norms and policies to facilitate proper monitoring and maintenance of their employees. Due to growth in commerce and management, strategy planning and execution has become an integral part of organisation. Due to this, International Business has come to the forefront. International Human Resources Management seeks to lay down common rules, solutions to problems and personnel management systems to help this new phase of global expansion transform into a success story and to help organisations adapt and procure better results. Working in a country that one is not familiar with, is a great challenge in itself. More so, when it involves the establishment of a branch office of one's company or deals with the successful initiation of an extension of the company, in a scenario completely different from the one, one are familiar with. Heading these operations that delve into international horizons and expansion plans build up more responsibility that needs to be fulfilled, on one's part. Therefore, a great amount of thought-processing and execution must go down into such plans, before embarking on a conclusion. INTRODUCTION You are partners in a leading management consultancy in London. You have been asked to set up an office in the capital city of CHINA. You are required to write a report for the senior partners. What is striking in an international expansion programme, is the Cultural Difference and Incompatibility one is bound to face. Numerous theories have been put forth, with regards to this. One such theory, is Geert Hofstede's 'Cultural Dimensions Theory'. Hofstede believes that management is not something that is related solely to business, but also extends in other aspects of life. (Website: http://www.valuebasedmanagement.net/methods_hofstede.html). He divides the cultural dimensions into four different dimensions, and later on went on to add a fifth dimension. The first dimension that he talks about is Individualism, wherein he highlights the extent of individual handling of projects, and the degree of group or team work that is existent in a management scenario. The second dimension is that of power distance, wherein he talks about the partisan politics. He delves into areas like inequality in management, biased outlook of those in superior positions and the like. The third, is that of certainty, which is nothing but the risk factor that is prevalent in businesses that expand beyond cultural borders. The fourth dimension is that of achievement or masculinity, which is the difference s in the task management between the sexes. The fifth dimension, that was later proposed by him, is Long term vs. Short term orientation, which talks about the time period of existent of the business unit in the extra-cultural scenario. Therefore, his theory states that management not only requires a business to look into the business operations, but to also look into other operations that govern an individual involved with the business. This is where culture comes into the perspective in business expansion. China is one of the favourable fast-growing sites for international expansion of business, trade and commerce. Transfer of technology, the extent of involvement of the local resources, the net currency profit, etc. are some of the factors that are looked into, before the green signal for the establishment of subsidiaries is given. When an employee needs to be sent abroad by a company, both, the company as well as the employee need to look into certain vital factors that affect and make an impact on successful stint of the subsidiary company, in a host country. The strategy employed in the expansion process will surely play a dominating role in determining the level of success received by the proposed plan. INVESTIGATION The difference in the cultural backdrop, between London and China can extend quite a 'culture shock', to the employees who move from the former to the latter. While the mounting pressure to make the new branch a successful venture can be quite unnerving, shouldering the burden of facing an extreme culture shock phase, alongside this can be quite a tough period. Therefore, it is imperative for businesses to chalk out programmes and policies in the aid of these employees. Nothing much can be done about the culture shock, except for getting attuned to it, by performing considerable amount of research before hand. However, the company can surely make up for this, be being supportive and extending its help by being considerate to employees, in the other areas of work. Here are few recommendations on how the company can extend its help and guidance, by being employee-friendly in this whole phase. One of the most striking features of this expansion, is the fact that the employees in charge of the new branch would be given good amount of autonomy. There is a greater degree of autonomy granted to the prospective employees, which is why it could prove to be a great workplace experience. The involvement of employees is extremely accentuated, which could bring about work satisfaction, above everything else. It also facilitates the company, since it ensures the proper comprehension of the company's as well as subsidiary's objectives in the minds of the host country and home country employees. This is another very encouraging step proposed by the management, as it encourages employees to come up with some great plans and policies. This grants them the creative freedom, besides also providing them with the opportunity to work as independent units within a grouped setup. This can be especially rewarding when implemented in an overseas venture, since it could pave way for better employee interaction, interest and subsequently pave way for the growth of the company. It could also lead to a greater degree of involvement with the management, thus, reducing the risk that is often associated with a foreign expansion venture. The practise of performance-based incentives and rewards is a great measure to boost the inventive and productive skills of an employee. It eggs employees on to better their work and produce improved quality of output. When individual employee works by utilising his complete potential, it leads to the overall development and progress in the improvisation of the total output of work and functioning of the workplace. However, a recognised and lucid mode of assessment of meritocracy must be laid down, in order to avoid any unwanted repercussions or employee disputes. The employees must be made aware of this method of output evaluation and any recognitions must be made on the basis of clear understanding. Special skills of employees are not duly recognised as proposed by the management. Instead, there exists the diffusion of persistence of such skill-based work approaches. The sharing of tasks can lead to the sharpening of multiple skills and thus, lead to the overall development of employees. However, as a downside to the same, the degree of specialization and high competency levels go down, when viewed across a cross-section of the various departments at the workplaces. Thus, multi-skilling could brush up skills in a number of spheres; however, the net output in one's specialized field is lowered. CHINA---LIFESTYLE AND CULTURE Firstly, the very fact that China is a Communist country and the UK is a parliamentary democracy, is a great shift. China is very often associated with the traditional cultural value, while London is perceived as the city of liberal ideas and notions. China's capital city, Beijing carries forward this traditional culture to a great extent. Language can be quite a barrier, especially when English is not something you can easily converse in, with a Chinese. Therefore, the city has English expats, who help in acting as translators between the Chinese and the others. Therefore, it is important that the employees contact and network with some of the expatriates or the others who are familiar with translation. Besides this, the food and the nightlife are quite different from what one can expect in London. It is more of a conservative culture here, with historical aspects being attached more importance. Therefore, the cultural difference is quite striking and the employees need to empower themselves with good amount of research and a little acquainting before actually taking charge of operations there. (Website: www.chinaexpat.com) RECOMMENDATIONS The abolition of job descriptions can be a great move in doing away with workplace discrimination between employees, more so when there exists a cross-cultural employee mix. However, the lack of the same can sometimes reduce the impetus provided to the employees, since it acts in contrast to the special recognition of an employee's work, by granting him special posts and designation titles. It has been well acknowledged by most companies that the provision of special designations can go a long way in boosting an employee's work satisfaction derived, besides provoking better quality output. Hence, the absence of the same could result in a dip in such occurrences that are beneficial to the employees and the companies, on a mutual scale generally. The company must recognize the services of employees and provide guidance and help, in aiding them settle down amidst changing scenarios. First comes the phase of adaptation, when the employee finds the environment new and different from the routine he has been subject to. He needs to get used to the whole new setup, which could probably include a new language, culture or practices in general. This could create disillusionment and slight depression. Next, the employee might feel like moving back home and returning to his routine. The phase of experiencing a culture shock, might take of his vigour and excitement. The third phase is the one when the employee begins to adjust to the whole situation and regains his vitality. This three-tier phase of adaptation can be made easier and successful if the company extends its support and helps the employee settle down, by creating easier conditions of work, monitoring their adaptation and progress. Helping employees settle down amidst alien conditions is the first aspect of countering the culture shock or novelty experienced. When an employee returns from his overseas experience, the company m must help him acquaint himself with the changed conditions back home. He may not comprehend the altered practices at his workplace or might feel that his expectations on returning have not been met with. Therefore, the company must also develop programs and monitoring systems, to help him settle down to the second shock---that on returning home. They could perhaps implement a program that keeps the expatriates informed about the new changes that have been implemented in their organisation back home. They could also organize training sessions on the return of their employees, to facilitate easy adaptation and help them get over the shock phase. ('Repatriation', website: http://www.intercultural-training.co.uk/repatriation.asp) When employees return form their international program and adapt to home conditions, they turn out to be well-experienced and informed about numerous programs, policies and fields of work. The company, must surely make sue of this knowledge since it could help them scale great heights. The company could appoint the employee in question to coach a newcomer or narrate his experiences in specific fields at conferences and the like. The employee too feels acknowledged and satisfied that his company considers him important and treasures his knowledge and services. This strengthens the equation between the company and its employees, forging mutual contentment and loyalty. The company, in the process of endeavoring to avoid any misdemeanors or power-plays, cold wars and jealousies, must lay down a common standard for assessing and appraising employee performances and must reveal the same. This way, employees shall strive to achieve the set standard for rewards, improving the overall performance of the company. Moreover, the company shall also forge unity and a collective and qualitative approach towards work! All along the company must exhibit the fact that it values and treasures its employees. All programs, policies, staff appraisals and schemes must be made keeping this in mind. Every endeavour of the company must reveal this ideal, which is a great way to cement relations, effect an increment in the quality and quantity of output, retaining and embracing trust, faithfulness and loyalty. It is said that a company must not function as a physical quantity; rather, it must adopt a policy of diminishing the business-like approach and nurture relations as well. As a company undertaking global expansion and dealing global transfer of personnel, it vital for the company to adopt and formulate programs to help its employees familiarize themselves with the experiences of moving from one country to another. Initially, an employee faces quite a number of problems, coping with the phases of adjustment and getting over the initial culture shock scenario. In such testing times, if the company can formulate special training sessions and adaptation procedures, it reflects the bond extended by the company, to safeguard the interests of its employees. It also carries forward the message that the company cares! Therefore, interest shown in emphasizing on the employees' welfare, shall go a long way in retaining loyalties. (Website: http://www.ebooks.com/ebooks/book_display.aspIID=231840) REFERENCES 'Developing a Globally Competitive Corporate Culture', website: http://spectrum.troy.edu/vorism/670_hrm.htm Website: www.chinaexpat.com 'Cultural Dimensions Theory', website: http://www.valuebasedmanagement.net/methods_hofstede.html Rodrigues, C, '1996, 'International Management', West. 'Repatriation', website: http://www.intercultural-training.co.uk/repatriation.asp Linen, Margaret , 'Repatriation: The frequently forgotten phase of an international assignment'. Evans, Paul; Pucik, Vladimir; 2002 'The Global Challenge: Frameworks for International Human Resource Management', 1st edition, McGraw-Hill/Irwin. Mathis, Robert L.; Jackson, John; 2006, 'Human Resource Management', Thomson South-Western. Website: http://www.ebooks.com/ebooks/book_display.aspIID=231840 Bohlander, George; Snell, Scott; 'Managing Human Resources'. Guion, Robert M., 1998 'Assessment, measurement, and prediction for personnel decisions'. 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