Country Effect to Companies Success.Thailand - Assignment Example

? WEEK 6 DISCUSSION WEEK 6 DISCUSSION Introduction As much as the setting up of new companies in emerging and other developed markets is a very daunting task, the need to maintain the new businesses and ensure their growth remains even more demanding and tasking (Baughn et al, 2006). This is because most processes of company formation are clued in as part of the entrepreneur’s expenditure. It is only through sustained growth and development of the company in the new market that incomes and subsequently profits will be yielded on the investments. But questions have been asked as to why some companies succeed easily in new markets and why other struggle till collapse. Indeed, no single answer can be given to explain why this phenomenon is so. However, one fact that is inclusive in the many available options of answers the regard for the country effect (Lee-Ross and Mitchell, 2007). By country effect, reference is being made to the need to pay critical attention to rhythmic cultural and socio-economic behavioral pattern of the people within the country in which the company is situated (Garcia-Cabrera and Garcia-Sota, 2008). Studies have showed that the mistake that most modern companies make with the country effect and thus the regard for the cultural influence of the local people is that, they tend to take pride in globalization and thus think global and act global. In this paper, an example is presented of how an entrepreneur in Thailand effectively made use of the country effect to his advantage, using the article of Brettel, Engelen and Heinemann (2008) as a case study. Consumer Perception and Ethics A regard for consumer perception and ethics is an important factor that determines success for entrepreneurs in Thailand. This is because according to Brettel, Engelen and Heinemann (2008), the perceptive and ethical values of the people of Thailand is carried directly into their consumer decision making as to which companies to do business with and which companies to withdraw from. Generally, these consumers would want companies to show high sense of integrity, ethical consideration and respect for social responsibility. Entrepreneurs who have become successful in Thailand have therefore been those who make as part of their organizational culture and climate, the respect for integrity, ethics and community development. Specific example is used with DHL Thailand in a separate study where the company made as part of its new market entry strategy, the need to throw themselves up to the people as the most trusted company. With the use of high moral standards through respect for privacy, timely delivery of parcels, concise charging of fees, and improved corporate social responsibility, the company became one of the fastest growing companies in Thailand (Baughn et al, 2006). In effect, it is always important to know the values that consumers cherish through consumer perception and ethics and rightly make these values showed in the company’s virtues. Consumer behavior and preferences Another study conducted has showed that the country effect and the exhibition of culture can be translated into the consumer behavior and preferences of the local people (Nguyen et al, 2009). That is t say that the kind and nature of goods and services that consumers will patronize depends largely on their country culture. Disregarding the country effect would therefore mean that companies and for that matter, entrepreneurs will offer goods and services that do not meet the preferences of consumers. As far as consumer behavior and preference is concerned, Brettel, Engelen and Heinemann (2008) explained that two key dimensions of country effect that comes to play in Thailand are collectivism and uncertainty avoidance. With collectivism, Thailand is ranked high, meaning there is high dependence on group in the society. In effect, the consumer behavior of individuals is influenced by what the masses accept to be true, real or authentic. With this in mind, entrepreneurs who have wanted to succeed have used a marketing strategy that is based on mass publicity. This is because through mass publicity, products become popularized among several people within the folds of consumer base (Garcia-Cabrera and Garcia-Sota, 2008). These consumers would in turn speak more about the products, making their colleagues also accept them. The country also scored high for uncertainty avoidance, meaning that consumers do not take risk with unknown situations. With this also, mass education is said to help in clearing doubts of consumers about products and services offered by new entrants. Attitude to work In tailoring business plan with country effect in mind also, it is important to look at the labor that is going to be used for the generation of goods and services. Labor is always an important aspect of business plan because without labor, production cannot be complete (Nguyen et al, 2009). In this regard, entrepreneurs entering new markets have been urged to test the attitude to work of the local people, as the generalized culture of the local people can influence their attitude to work (Lee-Ross and Mitchell, 2007). Using the Thai country culture as an example, Brettel, Engelen and Heinemann (2008) emphasized that the local people has a culture and respect for hard work, which is inculcated into people right from their youthful ages. Therefore once these people take up duties at work, they stay committed to them and approach the work from a perspective of personal ownership, meaning that they view themselves as key stakeholders for growth who must be blamed in case the company fails. Working under such as cultural atmosphere, entrepreneurs have a lot to trust in terms of the growth and development of their companies. By extension, it can be said that the country effect also comes with some advantage to the entrepreneur, as much as it also requires him to study the market critically to make the best out of it. Conclusion To conclude, it will be reiterated that the search for success for business does not only rest around the entrepreneur and the company that he sets up, rather, the collective interest, ideologies and culture of the entire country in which the business finds itself really counts as an important determinant of success. Indeed, as much as some companies paid attention to the role of the country effect, they benefited immensely from it. If for nothing at all, it has been realized that even though globalization opens trade in emerging markets unto a global pedestal, the direct contributions of the local people always count as very dominant and influential (Kessler, 2007). This is because when entrepreneurs focus their attention on the local market rather than globalised market, a lot of savings are done with the supply chain. Example of this is the savings that the company gets on distribution, delivery and feedback. Entrepreneurs are therefore admonished to make the impact that the country effect plays through the cultural determinant of success very important to them if they really want to record any successes with the opening of new companies. Finally, it will be recommended for the need to blend local taste with global taste by ensuring that the attention that is given to the local market does not affect the need to act global. This means that the phenomenon of thinking local and acting global is very influential for new businesses in emerging markets (Kessler, 2007). References Baughn, C.C., Cao, J., Le, L.T.M., Lim, V.A. & Neupert, K.E. (2006) ‘Normative, social, and cognitive predictors of entrepreneurial interest in China, Vietnam, and The Philippines’, Journal of Developmental Entrepreneurship, 11 (1), pp.57-77 Brettel, M., Engelen, A. & Heinemann, F. (2008) ‘New entrepreneurial ventures in a globalized world: The role of market orientation’, Journal of International Entrepreneurship, 7 (2), pp.88-110 Garcia-Cabrera, A.M. & Garcia-Sota, M. (2008) ‘Cultural differences and entrepreneurial behavior: an intra-country cross-cultural analysis in Cape Verde’, Entrepreneurship & Regional Development, 20 (5), pp.451-483 Kessler, A. (2007) ‘Success factors for new businesses in Austria and the Czech Republic’, Entrepreneurship & Regional Development, 19, pp.381-403 Lee-Ross, D. & Mitchell, B. (2007) ‘Doing business in the Torres Straits: a study of the relationship between culture and the nature of indigenous entrepreneurs’, Journal of Developmental Entrepreneurship, 12 (2), pp.199-216 Nguyen, T.V., Bryant, S.E., Rose, J., Tseng, C-H, Kapasuwan, S. & Kapasuwan, S. (2009) ‘Cultural values, market institutions, and entrepreneurship potential: a comparative study of the United States, Taiwan, and Vietnam’, Journal of Developmental Entrepreneurship, 14 (1), pp.21-37 Read More