Successful Domestic Company Goes Global - Report Example

Successful Domestic Company Goes Global Successful Domestic Company Goes Global Benefits of Sending Expatriates to Other Countries Any business seeking to expand into foreign markets like the Family Dollar Store would reap huge benefits from expatriate managers owing to their immense experiences, exposure and training in diverse cultures. Ahlstrom & Bruton (2009) believe the interaction with different cultures exposes them to a new paradigm in doing business. In the process they become much more efficient and holistic managers.in addition, expatriates also makes it easier for the parent company and the subsidiary to communicate. This makes them very instrumental in harmonizing operations between the two facilities. Besides, expatriates who manage foreign facilities adopt a global mentality which helps them benchmark performances to global standards (Ahlstrom & Bruton, 2009). Challenges of Using Expatriates While having expatriates to manage foreign subsidiaries may have its advantages, it also has a few challenges. For instance, the assigning of certain positions to expatriates gives locals the impression that the company is not to be treated as one of their own since they have no sense of identity with the company. Lang (2003) argues that this may prove problematic for the company especially if they want to give it a local or regional appeal. As a result, the consumers may feel left out due to the absence of one of their own within management. In addition, expatriates may experience cultural shock if they are not well versed with the foreign cultures, traditions and practices. The time needed for them to adopt may prove too costly for the company especially if the expatriate is experiencing difficulties adjusting. Likewise, the compensation packages required in such situations are usually high as a person requires to be paid high salary to be in tandem with the prevailing economic conditions in the country he is relocated to. This raises the company’s expenses, and eats into their profit margins. Finally, expatriates cost quite a lot of company resources which would otherwise have been allocated for other pressing undertakings (Ahlstrom & Bruton, 2009). Benefits of This Report This report will act as the basis for decision making for the Human Resource department of the Family Dollar Store to determine several factors. For instance, the section dealing with merits and demerits of hiring expatriates will enable them weigh the pros and cons of doing so. According to Keyes (2010), reports are also instrumental in helping the company formulate policy for different operations. For instance, the store may decide to adjust salaries of expatriates to reflect the prevailing economic conditions of their various jurisdictions. This report will also enable the management to plan effectively for the expansion project by factoring in variables such as costs to cover contingencies while deploying expatriates. In addition, it also opens other opportunities and information which might not have been hitherto accessible by other members of the organization (Keyes, 2010). For instance there are some reports passed by the management committee which are only accessible after their publication. This report also provides the information to the owners of Family Dollar Store about the risk levels involved and the opportunities available to them in this expansion endeavor. This makes it easier for the management of the store to carry out a cost benefit analysis on different aspects of the expansion scheme. This will guide them in making prompt decisions regarding running and administration of the subsidiaries. Finally, this report covers most of the concerns that the management may have regarding the expansion program. As a result it will save them valuable time in decision making which would otherwise have been wasted on board meetings and other brainstorming sessions. Factors Influencing the expansion. The choice of a country will depend upon several factors like culture, distance and the local dialects within a given area (Rafiq, 2014). For example, people from the eastern countries like China and japan tend to have better spending habits than their western counterparts who suffer from acute consumerism. Since the Store’s business model is founded upon the sale of variety of household goods, China may be an ideal destination for expansion because the store stocks goods that the Chinese consumers would still find useful. Likewise, we can skew our product portfolio to include things that sell faster in china like rice and pasta which is their staple food. Rafiq (2014) also cites distance as another factor that comes into play during the expansion to new markets. For example, since our company is in the fresh produce business including perishables, then expansion into a distant location may prove problematic since our products may go bad before they reach their destination. The cost of purchasing refrigeration equipment may therefore be an obstacle to the expansion. In the case of fruits however, the company can still expand by slightly changing the nature of the product. One way would be to venture into value addition by exporting fruit juice which has a longer shelf life instead of farm fruit. Alternatively, farm produce like vegetables can be sourced locally. Language is yet another factor that may influence expansion into a foreign market (Rafiq, 2014). Because most of the employees for the subsidiary will be sourced locally apart from the expatriates, an ideal location would be that whose population speaks at least one international language to enable easy flow of information between the parent company and the subsidiary. For instance, it would be easier for Family Dollar Store to expand into English speaking countries otherwise the cost of managing and sharing information may prove costly since a lot of time will be wasted on trying to understand information which may be too complex or ambiguous due to language barrier. Factors Determining Employee Suitability To determine which employees can be sent to work in a newly opened foreign subsidiary, several factors come under consideration. First off, the employee in question must demonstrate an honest appreciation and understanding of the country from which they seek to be transferred (Ahlstrom & Bruton, 2009). This is important because people who understand and respect other cultures are more likely to integrate and mingle freely than those who have little information about that culture. From a business perspective, it is wiser to send people to countries whose culture they not only understand, but also appreciate. For example, it would seem wiser to send an employee who speaks a bit of French to a French speaking country because they would enjoy themselves there rather than have them in a country where they will struggle to communicate with customers and get frustrated in the process. Secondly, the employee in question must be qualified for the position he/she seeks to fill in that foreign country. If the employee is qualified, then management can confidently delegate complex tasks to him/her without micro managing their every operation. If on the other hand the employee is not qualified, then there is enormous pressure on management from the main company put them under constant supervision which consumes a lot of time. Besides, it would seem illogical to spend time and other resources transferring an unqualified employee to a new station when you could spend less money and time getting someone locally to fill that position. The whole essence of sending an expatriate it because they are better placed to handle the task better owing to their vast experience with the corporate culture of the parent company. Finally, I would ensure that the employee in question is highly motivated to take up new challenges. The employee has to prove that the motivation is not merely adventure or better perks (Ahlstrom & Bruton, 2009). A highly motivated employee constantly demonstrates these virtues even in the absence of such attractive opportunities. This type of employee would be handed the opportunity to lead from the front in a new location. Motivating Employees to Be Expatriates To effectively motivate employees into becoming expatriates, I would look at their major needs and wants as a guiding principle. For example, one of the most commonly used motivators by most institutions is remuneration (Leonard , 2010). Because money ranks highly within most people’s hierarchy of needs, I would use it as a motivating factor by paying exceptionally well for those in position of expatriates. This would then prompt the others to work harder in the company with the anticipation of a future expatriate position. For instance, I would drastically adjust the net salary of expatriates who fall within a certain job group, while also offering attractive allowances as part of the perks. This will keep the employees working hard and focusing on their tasks as they seek to advance their careers into becoming expatriates. In addition, I would design the employment terms of the expatriates in a manner that it allows them a lot of time to relax and unwind. Because most employees believe they should be working for fewer hours every week, the proposition of having them work for fewer hours per day would be enough motivation for those not necessarily motivated by higher pay. These terms of engagement may also include offers like other employment benefits like accessible loans, personal company maintained car, education policies for their children etc. (Leonard , 2010). Another key motivator I would consider is offering opportunities for career advancement for expatriates. For example, by sponsoring further education to your expatriates, the store will have given enough motivation for the other employees to follow suit. This can be achieved through giving either partial or full scholarships to those employees who excel in their different domains with the promise of being made expatriates upon completion. Ensuring Commitment between Executive Committee and Board of Directors To ensure that both the executive committee and the company board of directors remain steadfast in the expansion projects of the company, I would use information as my main strategy. Because lack of proper information my lead both teams into conflicts regarding the sustainability or even relevance of this expansion project. I would ensure there is sufficient information on every aspect of the expansion and avail it to both teams as an when called upon to do so. This will help them monitor the progress of the expansion project and limit cases of conflicts arising due to lack of information. Experts argue that in the successful implementation of an expansion project, there needs to be a system of free flowing information and consultation between the executive committee and the board of directors because misinformation from either party may lead them to consider abandoning the whole project all together (Ahlstrom & Bruton, 2009). For example, if the board of directors of the store were to hear that the subsidiaries have not broken even long after the projected period, they may consider cutting their losses by just voting and deciding to pull out. If on the other hand I present them with information detailing why things are taking longer to materialize, then I would be able to prevail upon them by asking for more time to turn things around in the new location. In addition, this information may help me convince them to inject more resources into the newly created subsidiary if my feeling is that this would play a significant role in helping the subsidiary turn a profit. Recommended Books for Expatriates The first book I would recommend to the expatriates as they embark on their new endavour is The Family sabbatical handbook by Elisa Bernick. This book would prove resourceful to them since it contains information that is crucial for anyone moving to a different country for the first time. It has real time firsthand experiences hence will give a step by step process of adapting to the cultures, and will leave them feeling at home since it depicts different family situations, and how to face them in a peaceful manner. The book also gives guidance on how to go about a situation of meeting new people, how to make friends in a fast way, associating with the different cultures in an amicable way and looking for property that can best suit your needs. Another fine book I would recommend is ‘Emotional Resilience and the expat child’ by Julia Siemens. This book is a perfect resource for those expatriates with families. It helps their children learn different cultures, and teaches them social skills to enable them blend in without too much emotional strain. It also helps a parent to secure intelligent connections, and mature psychologically hence ease communication leading to a much less dramatic lifestyle. They learn to put their feelings into words which calms them, and modifies their future relations. The book brings out clearly significance of a strong relationship in children. It also upholds the significance of family rituals and traditions which brings togetherness, and reduces the monotony of moving to a new background. Finally, it also depicts how to make a child feel special and loved as they might take time adjusting and making new friends. All these factors are important to a person beginning life in a new country. Guide to Traveling Expatriates An expatriate who is traveling on an assignment of one to two year should take note of the following guide. Items to pack:- this should only comprise things that are easier to transport and are used on a regular basis like clothes, and other personal effects. Accommodating a vehicle:- If the company provides a personal car to be used by the expatriate, then you may leave yours behind. If it does not provide any, then it would be wiser to ship it over since renting one or buying another may be too costly in the long run. Furniture:- Most furniture are easily affordable so there would be no need to ship them since they can purchased I the new country. Moving pets:- It is easier to move pets to a new location. Although you need to check with the hosting country on matters of animal immunization and their policy on the same. Accommodation for children:- This can be arranged soon after the expatriate parent arrives at the work station. Presentation Framework Visuals The company’s sales have been increasing dramatically and hence it means the company has accumulated enough funds from sales to fund expansion Compared to its main competitors which have gone global it looks like family dollars is doing well and hence can be successful in the global arena its like its main competitors The revenue estimate of family dollar stores, revenue actual and revenue GAAP Statistics show the company is ready to expand. The following graph shows how family dollar store’s revenues, net income and profit margin are favorable for globalization. Feasibility study According to feasibility study done by family stores Mexico and Canada are countries from which many people demand the retail products sold by the company. The feasibility study also indicates that the company will be able to double its sales 5 years after it expands into Mexico and Canada. The feasibility study established that the expansion will significantly add to the cost of the company but the costs are justified in the long run since the expansion will lead to increased profitability in the long run. Information regarding rent buying land or building Family Dollar Store aims at expanding to Mexico and Canada as a low-cost retailer so that it is able to attract customers from different socio-economic groups. In order to do this, the company plans to enter into long term leases on property that it will establish its operation. The leases will be paid periodically and will make the company avoid the cost of paying rent regularly and hence concentrate on matters that attract customers such as advertising. References Ahlstrom, D., & Bruton, G. (2009). International Management: Strategy and Culture in the Emerging World. New York: Cengage Learning. Lang, A., S. (2003). Examining Expatriation: A Survey about Female Austrian Expatriate "Man"agers. Berlin: diplom.de. Keyes, J. (2010). Implementing the Project Management Balanced Scorecard. Florida: CRC Press. Rafiq, M. (2014). Principles of Retailing.Oxford: Palgrave Macmilan. Leonard, P. (2010). Expatriate Identities in Postcolonial Organizations: Working Whiteness. London: Ashgate Publishing. Read More