Successful Domestic Company Goes Global - Coursework Example

Successful Domestic Company Goes Global al Affiliation Successful Domestic Company Goes Global As the competition gets stiffer in domestic markets, businesses are increasingly finding it suitable to diversify their market portfolio by expanding their business operations to foreign countries that present suitable climate for business operations. In fact, the present business environment, it is not easy for a company to compete successfully by merely relying on the domestic market (Haslberger, Brewster and Hippler, 2014). However, before an American company can make a move to invest and do business in either of these countries, it is very critical for American investors to conduct analyses of the cultural environments of these countries that might impact of the ways the company conduct business in the countries. In this respect, for the business to have a thorough understanding of the business environment of these countries, it would be appropriate that the company send an expatriate. This document will begin by analyzing the benefits and challenges of sending an expatriate for foreign assignment. The document will proceed to analyze the major factors that would influence the companys choice of the countries into which to expand. The paper will also detail the criteria that would be considered when choosing the employees to send abroad and the incentives that will be used to encourage the selected employees to accept the international assignment. Other issues that will be addressed in the report include strategy to adopt to persuade the board and executive committee to accept the expansion books that the expatriates should carry with them when going for the assignment. Benefits and Challenges of Sending Expatriates to Other Countries The present day business environment has become more competitive than ever before. Despite the stiff competition witnessed in domestic markets, globalization is increasingly opening up more markets for business expansions abroad. However, before it is very critical for a business to learn and familiarize with the foreign country where it intends to expand (Bossink, 2011). This usually requires sending expatriates to the foreign countries considered for business expansion to analyze the market opportunity, the cultural, political, economic and technological issues that might affect business operations in the country. However, undertaking a foreign assignment usually presents a big challenge to most expatriates. In fact, research shows that the first major challenge experienced by most expatriates sends to undertake an assignment in a foreign country is the culture shock. This is because they encounter a new environment with people, who speak a different language and have different beliefs, values, and sets of acceptable behaviors. Other cultural issues that often pose a huge challenge to expatriates in foreign countries include differences in dress codes, food, eaten, hygiene and attitude towards time (Haslberger, Brewster and Hippler, 2014). Therefore, in order for an expatriate to succeed in undertaking a foreign assignment, it is very important for the expatriate to adjust faster to the new environment by learning the culture of the people in that country. Despite the challenges that an expatriate faces while on international duties, sending an expatriate abroad can have a huge benefit to a company that intends to conduct business in a foreign country. The first major benefit that a company gains by sending an expatriate in a foreign country is that it enables the company to understand the business environment of the foreign country. These include understanding the business culture of the country and the political environment. Understanding these factors help the company to come up with a proper plan on how to approach the market to ensure success (Pfoertsch, 2015). Additionally, sending an expatriate on a foreign assignment ensures that the company understands government regulations, thereby ensuring compliance once the business starts operating in the foreign country. Further, sending an expatriate abroad is beneficial to the business because it enables the expatriate gain experience of the new environment, resulting in better performance during the actual assignment. In fact, Bossink (2011) noted that employees with past knowledge perform best because of the experience and skills they have. This helps minimize chances of failure. However, sending an expatriate to undertake a foreign assignment also has its share of challenges. The first major challenge is that it might take an expatriate a long time to adapt to the new environments with people with a different culture and values. Secondly, sending an employee to undertake an international duty may prove expensive for a company. Additionally, finding an employee who is willing to undertake an international assignment may prove difficult due to fear of culture shock. Major Benefits That This Report Can Provide For the Organization This report will be of immense benefit to the organization in many ways. First, the expatriate report will be of benefit to the organization in planning. Because the business environment in a foreign country normally differ with that of the home country, it is important to analyze the foreign market in details to understand all the internal and external factors that might affect the successful operation in the country. Therefore, the expatriate report will act as the basis for planning on how to approach the foreign market (Haslberger, Brewster and Hippler, 2014). Secondly, the report will be used as the basis for deciding which country provides the best environment for expansion. For instance, after the two expatriates have conducted analysis of the countries where the company intends to expand to, the organization will have the opportunity to compare the business environment of the two countries and decide on the one that present less risk to the company. Analysis of Major Factors That Might Influence the Choice of Country to Expand As stated earlier, there are a number of factors that impact greatly on companies that operate in foreign countries. Therefore, before starting to conduct business in a foreign country, it is important to understand the factors that might impact on the business in the foreign language. Accordingly, the first major factor that would influence the choice of country to expand to is the economic growth. A countries level of economic growth will influence the choice of a country because it shows whether or not the people in the country have enough disposable income to be able to buy the products or not (Pfoertsch, 2015). The second major fact that would influence the choice of a country to invest is the level of politically stability. High political volatility implies greater business risk, thus not conducive to investment. High political stability implies less business risk, thus favorable for business investment. The third major factor to consider would be the cultural factors. This is because the cultural issues will determine how the business communicates with the locals and how they perceive the business. Distance will also be a major factor to consider when deciding the country to expand to because distance has an impact on the cost of transport, which affects profitability. Based on the factors highlighted above, India and Brazil are the two countries that would be considered for expansion. Firstly, the two countries would be considered for business expansion because of the faster growth of the economies of the two countries. Economic analysis shows that India and Brazil are among the fastest emerging economies in the world. The two countries are also among the freest economies globally. India, for instance, being the second most populous country in the world with 1.2 billion people, has a GDP of 5.1 trillion PPP (Kumar, Sethi and Sethi, 2012). The country also experiences economic growth of 4.4%. The strong economy of the country is also indicated by the low level of unemployment, which stands at only 3.7%. A similar strong economic expansion is witnessed in Brazil, which is the seventh largest economy in the world with a GDP of $2.4 trillion PPP. This is spurred by an annual growth rate of about 2.3% in 2014. Unemployment rate in Brazil also remains at about 6.6%. In fact, economists predict that the Brazilian economy will overtake that of the U.K. and France by the year 2020 to become the fifth largest economy in the world (Neto – Advogados, 2013). Accordingly, the strong economic growth in India and Brazil has made the two countries attractive for business expansion because they show that most Indians and Brazilians have enough disposable income and high purchasing power to buy the products that the company intends to introduce. Secondly, the two countries have been chosen for business expansion because they enjoy strong political stability, which implies less business risk. India and Brazil have been ranked among the most democratic and politically stable countries in the world (Neto – Advogados, 2013). Accordingly, this implies that the business is not exposed to risk of wars as in the case in politically unstable countries. Thirdly, the two countries have been chosen because their cultures present a good business opportunity. Studies show that India and Brazil are some of the most culturally rich countries in the world. However, the people of both countries are friendly and receptive to foreigners. In fact, there are quite a number of foreign companies that are doing exceptionally well in the two countries. Regarding language, India is more suitable than Brazil because the majority of Indians speak English language as opposed to Brazilians who speak mainly the Portuguese language (Kumar, Sethi and Sethi, 2012). Although the majority of Brazilians speak Portuguese, a large number of business executives and managers speak fluent English. As a result, the company will not have much difficulty communicating with the locals. Brazil and India will also be chosen because they are not very far geographically. Brazil, for instance, is just a few miles away from the United States, which would mean less cost of transport. India, although relatively far, this is not very far the extent that it might bar the company from doing business in the country. Criteria That Would be Considered When Deciding Which Employees to Send Abroad Choosing the right employee for an international duty is the key to the success of the assignment. As such, the following are some of the criteria that will be followed when choosing the employee to send abroad. The first that would be looked at is whether or not there is an employee with international skills and experience (Pfoertsch, 2015). Looking at the skills of an employee in international matters is important because employees who lack experience working abroad might experience culture shock, which might impact negatively on the assignment. Therefore, the right employee to choose for the international assignment would be one who has travelled abroad, familiar with the culture of the country and is capable of speaking the language spoken by the majority in that country. Secondly, health issues would be another thing to consider. Normally, the majority of people who travel to a foreign country develop diseases, because of the change in environment and the stress that comes with struggling to adapt to the foreign culture (Haslberger, Brewster and Hippler, 2014). Therefore, the right employee who would be chosen for the international duty would be one who is in good health. Additionally, consideration would be made as to whether or not the employee has family members who are also traveling with him or her. This is because having a family is important because they provide support, but also require a bit of training and support. This is because an employee cannot discharge his or her duties well is the family is left in a miserable condition back at home. Major Methods And / Or Incentives You Would Use In Order To Encourage the Selected Employees to Become Expatriates In order to encourage the employees to accept the assignment, there are a number of incentives that would be provided. Firstly, the employees will be provided with a salary increment to entice them to accept the assignment. Secondly, the organization will entice the employees by offering support and benefit to their families. Providing help to the employees family would help release tension that usually characterize families would member is traveling abroad for an international duty (Bossink, 2011). Additionally, the employees would be enticed to take up the assignment by promising them accommodation benefits. This would make the employees accept the assignment easily because they know that their accommodation costs are catered for by the company. Strategy to be Used to Ensure That Both the Executive Committee and the Board of Directors Commit to the Expansions Because the Executive Committee and the Board of Directors might be skeptical about the expansion plan, influencing them in the most appropriate way might help win their support. Accordingly, the strategy that would be adopted to win their support is by explaining to them how the company would benefit from the expansion. This would involve detailing to the board and the executive the estimate of revenue and profits expected to be generated from the expansion in the selected foreign countries. Recommended Books That the Selected Expatriates Should Take With Them When They Go Overseas The two books that the selected expatriates should consider taking with them include U.S. Expatriate Handbook Guide to Living and Working Abroad Paperback (1998) by John W. Adams and Expatriate Management: New Ideas for International Business (1995) by Jan Selmer. These books are appropriate for the expatriate because they explain the challenges that an expatriate is likely to experience in a foreign country, such as culture shock and the strategies to overcome the challenges. However, before embarking on a journey to the foreign countries, it would be appropriate for the two selected expatriates to prepare adequately in terms of resources and transport (Haslberger, Brewster and Hippler, 2014). As such, it would be appropriate for the expatriates to carry all the clothing, including those that can protect them during adverse weather conditions. The expatriate should also ensure that the families left behind are provided with the necessary resources and finance before leaving. However, assets such as vehicles, furniture and bedding should not be carried these items would be provided by the company abroad. Conclusion In conclusion, as a business environment becomes competitive in the domestic markets, companies are increasingly finding it suitable to expand abroad. Nevertheless, before expanding business operations into a foreign country, it is important for a company to send expatriates in the foreign countries to analyze the business environment and factors that might affect the business in the foreign country. However, because expatriates also face many challenges when undertaking assignments abroad, proper preparation is necessary to ensure success. References Bossink, C. (2011). To go or not go..? Princeton, NJ: Rozenberg Publishers. Haslberger, A., Brewster, C., & Hippler, T. (2014). Managing performance abroad: A new model for understanding expatriate adjustment. Abingdon, OX: Routledge. Kumar, R., Sethi, A. K., Sethi, A. (2012). Doing business in India: A guide for western managers. New Delhi: Palgrave Macmillan. Neto – Advogados, P. (2013). Doing business in Brazil. New York, NY: Juris Publishing. Pfoertsch, W. (2015). Going abroad 2014: How to understand foreign markets and do business around the globe. New York, NY: Epubli. Read More