Successful Expansion of a Business - Essay Example

Consulting Skills Roll No: Teacher: 10th April 2009 Consulting Skills Introduction Consultants play a crucial role in the success and expansion of a business setup. For the expansion of a business, it is essential for a business to obtain consultancy regarding its expansion. The businesses that are established domestically and have an intention to expand globally are in a dire need of a consultant as without an experienced and skilled consultant, successful expansion is not possible. The management has to be very responsible while hiring a suitable consultant for the business. Some businesses have internal consultants while others have external consultants. In some cases, the businesses require the support of internal as well as external consultants. External consultants that are hired by the organizations and businesses usually are expected to have a wide range of skills regarding consultancy (Kipping 1997). External consultants work on individual basis as well as for consultancy firms. Consulting party can be defined as an organization or a person who is involved in planning procedures in relation to federal undertaking. A federal undertaking can be explained as a project that is facilitated by federal participation in terms of support, allowance or authority (What is meant by the term “consulting parties?”). A consultant is an individual who is involved in solving or analyzing a problem of a client. A consultancy is the organization involved in it. A management-consulting firm usually deals with the problems associated with one organization, customer problems, employee problems, expansion of a firm, market studies related with economic, political, demographic and sociological changes etc (Alvesson and Johansson 2002). A simple model of a consultancy practice is as follows, (Markham 2004, p.12). According to this model, the consultants have to deal with the whole infrastructure of an organization, which is linked to clients, leadership and intellectual property. For any kinds of decision taking in relation to clients, leadership or intellectual property, the consultants’ assistance is acquired for enabling the infrastructure to operate successfully. Consultancy is a wide field that needs experience and skill in order to facilitate people with relevant knowledge concerning clients and their day-to-day business tasks. Expansion from a Domestic to Global Market From a domestic to global expansion, an organization is required to consult its human resource department because the human resource department keeps the accountability of provision of a suitable plan, recommendations and information for the business expansion needs. The human resource department assigns this task to an external consultancy. This case discusses as to what are the factors needed to be considered when one firm is going for a global strategy. For an HR department, recruitment is the main task involved so what are the steps needed to be taken for a global expansion. Domestic HR function is entirely different from a global HR function, the culture will be diverse and the method of functioning will be different. Therefore, the factors affecting domestic and global HR function will be different. For example, the major income for Chinese economy is from exports (Jones and Brazzel 2006). Recent studies show that if Chinese economy will continue moving like this, it will become as large as US Economy (largest economy in the world) by 2035 (Paik and Vance 2006). According to Chinese global point of view, by going global means not only exporting but also it needs a practical understanding (Paik and Vance 2006). Before venturing to go global, there is need for exact knowledge about the market, and the interested people are required to overcome the challenges that they face in their recognition procedure. Therefore, in the business case study the strategy adopted by the HR organization in deciding to go global will be evaluated and also it will be discussed as to what methods need to be adopted for choosing an external consulting firm. Going global is a big task; more difficulty is in its implementation. When an HR department is expanding to other countries, it is more challenging one. So expanding organization needs a good knowledge about the external situation or needs an external consultant (Clark 1995). An external consultant can solve the entire problem faced by the external organization (Morton and Joynt 1999). There are many problems an organization is facing when it decided to expand globally (Kubr 2002). Some of them are:- Technical problems: When an organization is going globally, it needs an expanded technical capacity to withstand in the market. Employees should be technically competent. An external consultant can train the employees to adapt the new environment Problems related with implementation: if we are choosing a domestic consultant for the implementation, it will be more difficult because they will not be aware of the market problems outside, technical incapability etc. If the difficulty by choosing global consultant was 20%, in domestic it will be more than 70%. Difficulty related to maintenance: Maintenance problems arise once organization starts working. After expanding the business to other countries timing will be different in different countries, it will affect maintenance. Effort will be beyond standards: After becoming global, it cannot be compared with the standards of domestic organization because it will be more than that. Some points that make the decision (global expansion) perfect: Select qualified employees in a team who are managing a project. Select the best candidates from different countries. Select a workflow process that saves or reduces the time consumption. Induce the employees to report the up to date progress to manager. When expanding globally the organization must consider some factors like taste, life style and preferences of citizens outside. Globalization forces an organization to rethink about its present process (Paik and Vance 2006). Four factors must be in mind while going global; that includes, 1: Need to develop and maintain a global competitive advantage. 2: Continuous strategic movement should be focused. 3: Require coordination in decision making of the market. 4: Give an eye on government rules and regulations also market participation. Many studies have proved that if a company expands globally without understanding the cultural factors of life and work in that market, business may end up as failures. Many of the recent researches show that by going global without understanding the life style and chemistry of the citizens outside causes many problems, such movement end up in utter failure. For understanding all these, we will take time for an example. For 17 years, Philip merry is concentrating to implement multi cultural teamwork to be successful globally (Paik and Vance 2006). Now his company is one of the leading companies. By considering this, it is better to choose an outside consultant. (Building cross cultural teams). In today’s world, global and international businesses are common because of the concept of globalization. For local firms and for international firms, marketing plans should be developed differently because the international business captures a larger market as compared to local business (What are some differences between domestic and global marketing plans 2009). Language is one main problem when going for global expansion. If we ignore this aspect, it will affect the business adversely because it is quite possible that the meaning of a word in one language is entirely different when it spoken in another country. For example, on the occasion of Pepsi’s one of the campaigns in China, they mentioned, “come alive with the Pepsi generation” when converted into Chinese, it meant “Pepsi brings your ancestors back from the grave”; so it generated a bad effect. May be all these things are not known to a domestic consultant; so it is better to go for an external consultant. (What are some differences between domestic and global marketing plans 2009). When an organization is managing globally, not only it needs to look into external factors at the same time need to look into internal factors also (Kipping and Engwall 2002). An organization alone is difficult to manage it so an external consultant will be helpful. Why need to discuss with a consultant: Discussion with a consultant is a very significant step and is also essential. A consultant is the one who is able to direct the management towards enhanced productivity and appropriate management techniques for assessment of employees in the right manner (Kipping and Engwall 2002). Consultants are fully skilled personnel that are able to gather relevant information concerning business ineffectiveness and blunders that can become a reason for creating disturbance in the smooth production. Along with the provision of support and assistance in the field of business production, the consultants also provide concerning recommendations and legal knowledge for keeping the organization away from liquidation or bankruptcy (Top 10 reasons why to choose management 2009). If we choose an external management consultant they can serve a company by all the following ways because they are already in outside they can coordinate with the employees easily they are familiar with the external functioning. A management consultant helps to solve problem practically. They help to encourage communication between employees. They guide to reschedule the structure of the company. A consultant motivates the employees to work as a team. They will do the survey and they can suggest latest managerial trends. Each company will have their policies consultant analyzing the policies. An important role of a management consultant is to improve the corporate culture in a company. They help to develop initiative qualities among employees. How to Select a Suitable Candidate as a Consultant Recruiting a suitable consultant for a business expansion is extremely essential as without an external consultant, the business can be in loss in its decision of going global. According to the theory of Edwin B Flippo “it (recruitment) is the process of searching the candidates for employment and stimulating them to apply for jobs in the organisation”. Recruitment is the activity that links the employers and the job seekers.” (Bose 2004, 207). Every organization’s needs, size and business, everything is different. Based on the needs and wants of the organization, recruitment can be of two types - centralized and decentralized. In centralized recruitment all powers are in the hands of head of the department and they are required to take the decision. In decentralized recruitment, the right of decision making is divided and every department and branch of business can make decisions according to its own understanding and requirements. It is the organizational need to decide whether to go for a centralized or decentralized recruitment. The recruitment of an external consultant is the task of HR department. The manager of the HR department will conduct the recruiting process by the help of his/her associates. The manager of HR department is required to keep an eye on the surroundings, business needs and requirements, what is going on, need to find the right candidate for the required position, need to formulate strategies for hiring and define the market condition etc. Selection of the right candidate involves many steps. Each step needs to be carried out carefully to avoid expulsion of right candidate and selection of wrong candidate. There are many factors that affect the recruitment process of an organization. These can be divided into internal and external factors (Bose 2004). Internal factors inside the organization and the other is external to it. Challenges in recruiting a Consultant Recruitment process should be flexible and it should meet the immediate requirement of organization (Jones and Brazzel 2006). Every organization is looking for efficient candidate so it is a big challenge. For finding the best candidate, from a pool of candidates, an HR candidate has to face many challenges (Jones and Brazzel 2006). When an organization is being globalized, it must be flexible to any kind of situation. Not getting the right reward for the consultant: even though the consultants performed well and recruited right candidates, they are not rewarded. Process of recruitment: Need a speedy process, adaptability should be there, need to cater the immediate requirements. Prioritization of the task based on market trend: An HR organization need to priorities the task based on the changing market trends. This is a big challenge faced by the organization. Before selecting a consultant some factors must be considered Global business is a well-established and expanded business due to which, the consultant that is required for a such a business should be selected after enough consideration and evaluation of the skills that a consultant should have in order to support and assist a global business. Therefore, the selection of a consultant cannot be considered as a small task (Bailey 1987). By opting for the right consultant for the global business, the business can get right assistance in terms of adoption of strategies and implementation of right measures for business expansion. A consultant that is required for a global business should have interpersonal as well as technical skills related to global businesses (Bailey 1987). Consultant should be well competent in consulting skills. Before we select any consultant, we should think whether he is competent to give us the desired outcome (Clark 1995). There are many consultants worldwide from which we need to search out the best one. There are many parameters through which we can select the service of a consultancy. Some factors that influence while choosing a consultant are, Where does the consulting firm rate in the market (reputation)? How much is the practical experience of the firm (who are the present client firms with whom the organization is dealing with) Process of hiring a consultant Rules for management consultant are essential for effective working due to which, IMC (The Institute of Management Consultancy) has structured certain rules for management consultants that they should follow in order to work effectively. In addition, these designed rules can be consulted for successful completion of any project that the consultants have undertaken (Hiring a consultant with Brefi group 2009). The rules/process of hiring the consultant is as follows, 1: Openly define the objectives that the organization wishes to achieve. 2: Confer with the employees and management to agree with specified objectives. 3: Select more than 3 consultants and their proposals. 4: Concise the consultant appropriately 5: Need to touch with the consultant to know the progress 6: Be sure that the consultant submitting on time without surprise. 7: Involve in the implementation process recommended by management consultant. The process of consulting Some of the phases of consulting are (1) pre-entry, entry, contract agreements (2) data organization and preparation (3) action planning (4) evaluating progress and results. (Jones and Brazzel 2006). Consulting is means giving instructions or advice. We can say that a manager in an organization is also doing a consulting job because he is giving advice to his peers and colleagues. Management consulting is a process of improving business exercises and management. Consulting itself is a profession, and helping other organization to give assistance in recruiting, globalizing, solving employee problems, motivating employees through which giving good direction to the organization (Alvesson and Johansson 2002). Nowadays many of the consultancies are emerging so it is difficult to find best in them for taking advice. Brigman along with other writers inform that the American School Counsellor Association (ASCA) report that the difference that exists in clients concerning their age, gender, ethnicity, sexual orientation, social and economic status, racial background and religious identity, all should be identified by the counsellors of the school in order to facilitate them with relevant support (Brigman, et. al 2004). The counsellors should also gain training for analysis and evaluation of differences that exist between individuals to make sure that they are able to compete successfully (Brigman, et. al 2004). A consulting firm performs work for its clients through individual operating assignments. Based on the firm’s strategy consulting firms are implementing their own methods otherwise it will affect the organization (Kubr 2002). Managing the Consultancy Process The managers of an organization are required to select skilled consultants for their organization. Along with the selection procedure, they are also required to manage the consultancy process that is assisted by the consultants. The managers are required to communicate with the consultants in order to understand their opinions regarding the initiation of a project, expansion of the business and many other relevant matters in relation to the business (Bose 2004). The managers are required to keep the consultants in constant contact in order to evaluate their performance and their legal and economical advises. The management of an organization is not only responsible for handling other employees but also external consultants to check whether they are working for the betterment and advancement of the firm or not (Bose 2004). By identifying that, consultancy is a significant aspect of successful performance of a business, the management should be responsive to the consultancy process continuously. Consulting skills Required by the Consultants Consultants should be fully aware of certain key skills that they should have acquired for formulating strategies for an organization (Hiring a consultant with Brefi group 2009). The following three skills can be considered as essential for consultants for their successful and diligent working: 1. Technical skills Technical skill is associated with engineering skills, how a firm is planning their activities, method of controlling a project, how manufacturing is done, how dealing with HR function finance and system analysis. 2. Interpersonal skills This quality a firm needs in all activities; the qualities includes, Boldness Supporting mentality snooping management style cooperation to work in group 3. Consulting skills This is one of the most important skills required by a consultant. It contains 4 phases. Requirement in consulting phases includes, Constricting: In it they are coping with mixed motivation, settling their wants Invention: In this phase, they are developing surface of analysis, handling the political climate Feedback: In it channelling the data needed, realize and work with different opposing situations, presenting self and the firms data collected and formed. Decision: In it, they focus in running group meetings; do not take decision personally. External Consultant for Global Expansion When an organization is widening its service outside the country it should be proved that there is no hindrance related to legal, governmental, political, sociological, cultural etc. If any of these problems exist, an external consultant can find a solution easily because they are familiar with these kinds of situations. Nevertheless, a domestic consultant cannot solve these problems as fast as an external consultant can. According to Ernst and Kieser (2002), internal consultants do consultancy job better as compared to external consultants but at some occasions, external consultants are essentially required because internal consultants have some lacking knowledge concerning expansion in some farther areas. For example, for global expansion, the business has to establish in new areas about which, internal consultant has limited knowledge. For this purpose, an external consultant who has better knowledge of the new locality will be an excellent choice (Ernst and Kieser 2002). Experienced Consultants are Prioritized Choosing a consultant is a grand task as his/her selection is going to impact the whole business largely. Before choosing, the organization needs to do a study, which should be about the well performing consultancies in the market, their previous experiences and successful cases etc. because once the consultant is chosen, the organization expects an efficient performance and a desirable output. It is reported that for an organizational success and establishment, the consultants are required to be highly experienced in their field (Clark Fincham 2002). The consultants are required to make recommendations that are crucial for the business. Failure of Kellogg’s India Ltd In 1994, Kellogg has launched their products like corn flakes, wheat flakes and basmati rice flakes (Brown, et. al 2001). Even though they offered good quality products, the products failed because they didn’t look into the culture of India, their life pattern, the behaviour of breakfast India have (Kellogg Company 1986). In this case, if the company had chosen an external consultant in India for studying cultural behaviour, failure would not have happened. It clearly explains that an external consultant will be well aware of all these matters. External Consultant better than internal Consultant An external consultant has more and efficient consultancy skills because he is much more experienced than internal consultant is, as he has worked with number of clients. External consultant possesses more experience on global level They can easily predict the changes happening on global level. Ernst and Kieser report that internal consultants are better because they are fully aware of the business procedures of a business (2002). This is true to some extent but the external consultants have broader knowledge and can gain knowledge about business procedures much easily because of their prior knowledge. Challenges affecting external consultants External factors can be considered as a huge challenge to the external consultants and also the external consultants are unable to manage and eradicate some of the external factors (Robinson 1995). The external factors, which cannot be eradicated wholly, are political, economical, market factors, governmental regulations and many others like these. Along with external factors, internal factors are also there that can be managed by the management of the organization (Robinson 1995). Conclusion In conclusion, we can say that when we choose a consultant for expanding globally it is better to choose an external consultant. Domestic consultants may have demerits such as Less exposure to external affairs. Inability to predict market problems outside. When compared to external consultants, they lack some consulting skills. They do not have much experience on global level. Choosing an external consultant is better enough for expanding globally because they possess all the above mentioned characteristics apart from that they have many global experience also. For tapping innovatory tasks, the organizations can hire external consultants, which can help the organization in managing its innovatory tasks (Paik and Vance 2006). The communication between the organizational management and the external consultants take place by means of meetings held with the organizational management and also through newsletters (Paik and Vance 2006). The many problems related to political, economical or sociological factors can be identified, understood, and handled with the help of consultants. If we need to get efficient and valuable management consultant, who are jam-packed with skills and sound experience in global level, we need to choose an external consultant. A company can save some money by not appointing an external consultant, but this savings can be offset by losses due to the lack of knowledge of the market in which it operates. It is always prudent to appoint a well-qualified and professional external consultant in case where the market and its players are alien and unknown. References Alvesson, M., and A.W. Johansson 2002, "Professionalism and Politics in Management Consultancy Work." In T. Clark and R. Fincham (eds.), Critical Consulting New Perspectives on the Management Advice Industry, pp. 228—46, Blackwell, Oxford. Bailey, A, J 1987, Support of school management: external consultancy, Routledge, London. Bose, Chandra 2004, Principles of Management and Administration, PHI Learning Pvt. Ltd, New Delhi. Brigman, Greg et. al, 2004, School counsellor consultation: developing skills for working effectively with parents teachers and other school personnel, John Wiley and Sons, New York. Brown, Gerald, J.B. Keegan, and K. Wood Vigus 2001, "The Kellogg Company Optimizes Production, Inventory, and Distribution," Interfaces, November/December, pp. 1-15. Clark, T 1995, Managing Consultants: Consultancy as the Management of Impressions, Open University Press, Buckingham, UK. Clark, T., and R Fincham 2002, Critical Consulting: New Perspectives on the Management Advice Industry, Blackwell, Oxford. Ernst, B., and A. Kieser 2002, "In Search of Explanations for the Consulting Explosion." In K. Sahlin-Andersson and L. Engwall (eds.), The Expansion of Management Knowledge: Carriers, Ideal and Circulation, pp. 47-73. Stanford University Press, Stanford. Building cross cultural teams, Global Leadership Academy, http://www.philipmerry.com/programs/cross_cultural_teams.shtml Hiring a consultant with Brefi group 2009, BREFI Group, viewed 24 March 2009, http://www.brefigroup.co.uk/consultancy/hiring_a_consultant.html Jones, Brenda B and Brazzel, Michael 2006, The NTL handbook of organization development and change: principles practices and perspectives, John Wiley and Sons, New York. Kellogg Company 1986, The History of Kellogg Company, Kellogg Company, Battle Creek, Mich. Kipping. M 1997, "Consultancies. Institutions and the Diffusion of Taylorism in Britain. Germany and France, 1920s to 1950s." Business History 39 (4): 67-83. Kipping. M 1999, "American Management Consulting Companies in Western Europe, 1920-1990: Products, Reputation and Relationships", Business History Review, 73 (2), 190-220. Kipping. M. and L. Engwall 2002, Management Consulting: The Emergence and Dynamics of 1I Knowledge industry, Oxford University Press, Oxford. Kubr, Milan 2002, Management consulting, International Labour Office, Geneva. Markham, Calvert 2004, The top consultant: developing your skills for greater effectiveness, Kogan Page Publishers, London. Morton, Bob and Joynt, Pat 1999, The global Hr manager, CIPD Publishing, London. Paik, Yongsun and Vance, Charles, M 2006, Managing a global workforce: challenges and opportunities in international human resource management, M E Sharpe, New York. Robinson, James, D 1995, Performance consulting, Berrett Koehler, San Francisco. Top 10 reasons why to choose management 2009, Royalty Universe, viewed 24 March 2009, http://blog.royaltyuniverse.com/2009/01/02/top-10-reasons-why-to-choose-management-consulting.aspx Wightman, Daryl et al 2000, Internal consulting skills, Performance Dynamics, viewed 24 March 2009, http://www.consultingskills.com/docs/leaflet.pdf What are some differences between domestic and global marketing plans 2009, Linkedin, viewed 24 March 2009, http://www.linkedin.com/answers/marketing-sales/business-development/MAR_BDV/422547-15845748 What is meant by the term “consulting parties”, viewed 24 March 2009, http://www.us31e.com/images/consulting_party_definition.pdf Read More