The Transfer of Japanese-Style Management to American Subsidiaries - Research Paper Example

Management Exam Question 1 Doing business in different countries presents fresh challenges to companies, particularly in light of the differences inherent in various cultures and nations. This is the case in instances where a company seeks to enter the US market from Japan. Digital Frontier is Japanese production company, which focuses primarily on the development of motion pictures. The company has a motion capture studio referred to as OPAKIS located in Odiaba, Tokyo. If the company wanted to expand its business to the US, Digital Frontier would need to make substantive changes to its manner of conducting business. Firstly, the organization should desist from over-depending on personal relationships. Within Japanese sales situations, personal relations with customers are the single most crucial aspect of sales. This is hardly ever the case in the US. Although personal relations are essential in the US, they are not as vital as in Japan (Beechler and Yang 482). Americans are more independent than the Japanese, and do not conform to a culturally established need to seek out personal relationships. Often, Americans find it vital to deter the appearance of favoritism opting to conduct business strictly on an emotionally distant basis. It is, therefore, critical that the Japanese realize that they should conduct business primarily on the basis of price, product fit or quality regardless of personal relationships. A notable benefit to the Japanese company is that, as a consequence of the natural interpersonal distance in the US business relations; the conventional Japanese requirement of sending expensive seasonal gifts to potential, current and past customers is not necessary. In truth, many Americans consider Japanese gift giving practices as expensive, excessive and reason for ethical concern. In addition, the Japanese company will also need to change it culture of disparaging the company. In order to show humility and proper hierarchical status, Japanese businesspeople often criticize, disparage and demean themselves, their own products and company. Although this form of outward humility is a norm in Japan, it can result in diminished sales in the US. A Japanese customer automatically understands that a Japanese businessperson demeaning his company or product does so out of cultural behavior even in the event that the product is the best in the industry (Beechler and Yang 486). This is not so in the US, hence in order to attain success in the US production industry, Digital Frontier should express confidence by touting the strength of its products and services. Americans typically desire to work with the best organizations, purchase the best products and think of their own companies as the best in the industry. It is unthinkable for American organizations to disparage themselves or their products since these customers consider such rhetoric as an indication of weakness. The Japanese company should also change the traditional Japanese culture of ignoring the significance of sales training. Similar to American sales representatives, Japanese representatives also require product knowledge, as well as professionalism in all aspects of the sales process. Certain sales representatives may be too busy to request training while others may consider such a request as a sign of weakness. The Japanese detest losing face or being embarrassed and as a consequence, Japanese sales representatives may be unwilling to request sales training. Therefore, in order to succeed in the US, the Japanese company’s management should insist that all sales representatives engage in constant sales training programs. The company’s management should also not expect their American workforce to behave the same as their Japanese counterparts, particularly in terms of after hours’ activities. While in Japan employees are required to entertain clients after work or spend time fellow employees, Americans are not typically required to do so. Conflicts may arise if Japanese executives expect American employees to spend their free time entertaining clients rather than spending their time with their families (Beechler and Yang 490). Making these changes to Digital Frontier’s business mannerisms would ensure the company remained profitable since its workforce and customers will be satisfied. Question 2 First Solar Inc. refers to an American manufacturer of solar panels and a provider of supporting services, finance, construction and maintenance of PV power plants. First Solar makes use of the latest technology such as cadmium telluride (CdTe) as a viable semiconductor to make solar panels, which are relatively inexpensive compared to those, manufactured using the crystalline silicon technology. First Solar is a record holder in technology utility as the organization utilizes the most recognized thin film semiconductor (CdTe) (Dymsza 21). The utilization of this technology brings about the output of superior energy in real-world conditions, superior performance with regard to environmental friendliness and low cost volume production advantages. In the year 2009, the organization became the initial solar panel making company to reduce its cost of manufacturing to at least $1 per watt, and this has since reduced to 73 cents per watt. The solar panel manufacturing industry is highly competitive although First Solar remains competitively advantageous. First Solar’s primary competitors include both national and international companies. These firms include SunPower, which is one of the industry’s fastest growing companies, Sharp Electronic, which is the world’s largest photovoltaic (PV) cell manufacturer and SunTech Power Holdings, a Chinese PV company. Other competitors include JA Solar Holdings, a Chinese organization that deals primarily with monocrystalline solar cells; and Evergreen Solar, which produces string ribbon PV cells. Japanese electronics company Kyocera is also a prominent competitor and a substantial solar cells manufacturer (Dymsza 94). First Solar sells its products to system integrators, independent power producers and solar project developers. The company experiences uncertainty and declines in European markets such as Italy, France, Spain and Germany following the feed-in-tariff subsidies. This necessitated First Solar’s expansion into markets such as China, India and new markets in the US. In 2011, the company announced a shift from existing markets heavily dependent on government subsidies to the provision of utility-scale PV systems to sustainable markets having immediate needs (Dymsza 117). First Solar’s greatest internal resources include financial strength, physical manufacturing plants, management effectiveness and superior products. The company can use motivations and structures to enhance its multinational business strategy. The organization should make use of three motivations to deal with international differences inherent in multinational trade thereby enhancing its multinational business strategy. First Solar can use adaptation to adjust to international differences, aggression to conquer these differences and arbitrage to take advantage of the differences. Arbitrage will allow First Solar to think of international differences as potential business sources rather than constraints with regard to value creation. First Solar can focus on adaptation by becoming country-oriented in its multinational business strategy. Conversely, it can focus on aggression and focus on cross-border groupings such as regional structures and product divisions. First Solar should also leverage its platform, portfolio and mandate globally to form intimate relations with global suppliers, as well as lessons from varying business formats (Dymsza 67). The organization can maintain a homebase in regional business centers and locate business hubs in all its potential markets. These strategies will enable the organization maintain its effectiveness in the international market throughout the course of the next decade. Question 3 Value chain disaggregation is inevitable in the modern business world. This is particularly the case given the changing business models inherent in telecom companies such as Nokia, a thriving, telecommunications company. Revenue in telecom companies is largely dominated by network edge products, and this form of domain continues to trail the core network with regard to disaggregation. This is the last bastion of the integrated value chain among massive telecom vendors such as Nokia. Several years back, Nokia attempted to unite the industry under a base station standard referred to as Open Base Station Architectural Initiative (OBSAI). The objective was to desegregate the value chain by standardizing interfaces and base stations and ultimately enabling superior performance and low research and development costs and enhancing time-to market new products. The development of wireless base stations proved quite costly and complex despite rapidly changing technology. Therefore, vital elements of Nokia’s product disaggregation include components, enabling tools such as technology, low and high volume subsystems, network services and facilities software, OSS software and communication applications (Gorchels 124). Components: nearly all components of the value chain are externalized, from powerful comprehensive processors and highly specialized elements such as radio frequency chipsets. These components are becoming immensely disaggregated. Enabling technology: nearly all enabling technologies are also externalized, which is an indication of a mature industry. Years ago, the organization established and sustained its own email and customer support solutions, as well as software library systems, operating systems and language. Today, these technologies are mature such that Nokia offers sufficient solutions, which are part of its core activities. However, the superior services do not provide sufficient differentiation to warrant incremental distraction and cost. Low and high volume hardware subsystems: in most telecom companies such as Nokia, nearly all low, medium and high volume hardware is offered by general purpose computing platforms. Nokia has often offered leadership regarding the disaggregation of its value chain (Gorchels 92). One year ago, Nokia sourced such a platform for its server based products. Currently, small system suppliers provide these platforms, but in light of the size of Nokia’s market and the relatively minute quantity of massive customers, it is plausible to see a consolidation of vendors. Network services and facilities software: while Nokia has a smaller domain than other telecom companies, particularly on revenue basis, the management of network services is related to hardware and network integration. This is a vital element albeit difficult to disintegrate from the hardware. The control software component of Nokia’s products is embedded in the operating system software component, which is controlled by standards. Operating system software: over the last decade, Nokia’s OS has become a domain of specialty occupying key relations with large corporations and service providers. Communication applications: advancement of the Internet and the introduction of e-commerce allow the introduction of smart applications, which give Nokia a network edge (Gorchels 51). Net neutrality provides immense potentials for disaggregation as Nokia and other telecoms companies tussle over who will supply and profit from communication services. This means that Nokia needs to offshore some of its services such as the production of communication applications. Works Cited Beechler, S., and Yang, J. Z. “The Transfer of Japanese-Style Management to American Subsidiaries: Contingencies, Constraints, and Competencies.” Journal of International Business Studies, third quarter: (1994): 467-491. Print. Dymsza, W. A. Multinational Business Strategy. New York: McGraw-Hill, 1992. Print. Gorchels, L. The Product Manager's Handbook 4/E. 4th ed. New York: McGraw-Hill, 2011. Print. Read More