Discussion Question – International Strategies

Discussion Question – International Strategies.

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International Strategies

Play media comment.

Prior to beginning this discussion, review Chapter 11 in the Abraham’s textbook on Diversified, Global, and Other Types of Organizations and listen to this audio snippet covering International Strategies. When companies expand into the international arena, they do so either because their home market has matured or because they see real opportunities in the foreign market.

Increasing the number of strategic business units requires a more complex business strategy. Sometimes the road to success in a foreign market can be a bumpy one. For insights into some of the more extreme cultural challenges posed when entering foreign markets as experienced by one of the United States’ largest fast food chains, read How McDonald’s conquered India (Links to an external site.) (Kannan, 2014) and McDonald’s Settles Beef Over Fries (Links to an external site.) (Grace, 2002).

For this discussion, determine whether or not the company operates in the international marketplace. If so, research the company’s international strategy and evaluate it in terms of effectiveness in regards to one of the issues below. If your company is not involved internationally, then choose one that is and evaluate that company’s international strategy in terms of effectiveness in regards to one of the following issues:

  • Cultural Barriers
  • Monetary Exchange Rates
  • Political Instability

Then,

  • Assess how your chosen issue potentially affects the strategic considerations of your organization involved in a global economic environment.
  • Propose language to add to the organization’s strategic plan that addresses the potential impacts to the organization’s global strategy.
Weekly Lecture

Business Ethics

Ethics refers to accepted principles of right or wrong that measure the conduct of a person, the members of a profession, or the actions of an organization (Abraham, 2012, p. 278). Managers may be confronted with ethical dilemmas while pursuing strategies that maximize the long-term profitability of the organization. We need to consider that the quest for profitability should not be constrained only by law, but also by ethical considerations.

Ethical Issues in Strategy

The ethical issues that managers confront are often due to the conflict between the goals of the company and the rights of the stakeholders. The most common examples of unethical behavior involve self-dealing, information manipulation, and anti-competitive behavior, among others.

Proponents of the stakeholder view of business ethics often argue that managers should behave in an ethical manner to ensure the support of the stakeholders, which will ultimately benefit both the stakeholder and organizations. Others argue that acting ethically is simply the right thing to do.

When facing an ethical dilemma, managers can ask themselves five questions that might help in making the right decision:

1. What’s in it for me?

2. What decision or action would lead to the greatest good for the greatest number?

3. What rules, policies, and social norms (written or unwritten) apply in this situation?

4. What are my obligations to others?

5. What will be the long-term impact on me and on important stakeholders (Abraham, 2012, p. 287)?

For a real life example of the role of ethics in determining company actions, see Sweatshops in Bangladesh Improve the Lives of Their Workers, and Boost Growth (Links to an external site.)on Nike and the use of sweatshops.

Corporate Social Responsibilities (CSR)

Ethics and social responsibility are closely related. Social responsibility is the conscious effort to operate in a manner that creates a win-win situation for all stakeholders. It is often called corporate social responsibility as CSR is an umbrella term for exploring the responsibilities of business and its role in society (Abraham, 2012, p. 287).

Corporations have a responsibility to try to create a win-win situation for stakeholders. For customers, the corporation must provide safe products and services with customer value. For society, the corporation should improve the quality of life, or at least not destroy the environment. The corporation must compete fairly with competitors. Through technology, the corporation should develop new ways of increasing customer value and the quality of life. The corporation must work with suppliers in a cooperative manner. It must abide by the laws and regulations of government. The corporation must strive to provide equal employment opportunities for the labor force. It must be financially responsible in relation to the economy. The corporation must provide shareholders with a reasonable profit. It must provide employees with safe working conditions with adequate pay and benefits.

For a discussion on the use of social media to promote CSR, you may find How the Voice of the People Is Driving Corporate Social Responsibility (Links to an external site.) interesting.

Going Global

As companies expand into foreign markets, they face the challenge of how best to organize their activities across different nations and regions. The five most common strategies include

• Exporting and market expansion.

• Strategic alliances.

• Joint ventures.

• Acquisition.

There are a number of ways in which global expansion can enable companies to increase and rapidly grow profitability. At the most basic level, global expansion increases the size of the market in which a company is competing, thereby boosting profit growth. Global expansion offers opportunities for reducing the cost structure of the enterprise or adding value through differentiation, thereby potentially boosting profitability.

A company can increase its growth rate by taking goods or services developed at home and selling them internationally. The Ford Mustang is an excellent example of a product that is being launched globally. Ford CEO Alan Mulally talks about the challenges of changing the look and feel of the Mustang to appeal to international and domestic customers. Check out the Ford Mustang Goes Global (Links to an external site.) video.

Startups and Small Business

A small business is a business that is independently owned and operated with a small number of employees and relatively low value of sales (Abraham, 2012, p. 322). Small businesses are generally less bound by bureaucracy and corporate policies, and, usually, maintain closer relationships with their customers. In other words, their flexibility affords them the ability to focus on their customers and meet their needs, which naturally generates customer loyalty. At the same time, small firms often grow out of the innovative ideas of their entrepreneurial founders, and, therefore, this mindset is likely to prevail in the small business.

The U.S. Small Business Administration (SBA) provides numerous articles on starting and managing a small business. Check out SBA’s Starting & Managing (Links to an external site.) web page.

When starting a new business, managers should consider developing a business plan which helps to ensure systematic coverage of the important factors to be considered in starting a new business. By identifying the variables that can affect the success or failure of the business, the business plan becomes a model that helps the entrepreneur and any employees focus on important issues and activities for the new venture. Finally, a business plan is essential when additional capital from outside investors will be needed at some time in the foreseeable future.

The Forbes website provides valuable information on writing a successful business plan with Torki’s (2014) How to Write a Business Succession Plan (Links to an external site.).

Nonprofit Organizations

The fundamental difference between nonprofit and for-profit organizations is that the primary goal for a nonprofit organization is not financial in nature. Another major difference between nonprofit and for-profit organizations is that nonprofit funding comes from a third party rather than a customer. Lastly, nonprofits are cause driven and socially geared (Abraham, 2012, p. 324).

Although some noteworthy differences exist, the manager’s role is the same in for-profit and not-for-profit organizations. All managers need management skills, perform management functions, and play management roles regardless of the organization type.

SPACE ON RYDER FARM is an excellent example of a leading arts nonprofit. For a brief discussion of the nonprofit and its founder, Emily Simoness, visit How She Did It: From Actress to Founder and Executive Director of a Leading Arts Nonprofit (Links to an external site.).

References:

Abraham, S. C. (2014). Strategic management for organizations. Retrieved from https://content.ashford.edu/

Boynton, J. (2013, July 17). How the voice of the people is driving corporate social responsibility (Links to an external site.). Retrieved from https://hbr.org/2013/07/how-the-voice-of-the-peopl…

CNN Money. (2013, December 5). Ford Mustang goes global (Links to an external site.). Retrieved from http://money.cnn.com/video/news/2013/12/05/n-ford-…

Powell, B. (2013, May 2). Sweatshops in Bangladesh improve the lives of their workers, and boost growth (Links to an external site.). Retrieved from https://www.forbes.com/sites/realspin/2013/05/02/s…

Pham, T. (2014, June 5). How she did it: From actress to founder and executive director of a leading arts nonprofit (Links to an external site.). Retrieved from https://www.forbes.com/sites/tiffanypham/2014/06/0…

Torki, N. (2014, May 14). How to write a business succession plan (Links to an external site.). Retrieved from https://www.forbes.com/sites/groupthink/2014/05/14…

U.S. Small Business Administration. (n.d.). Starting & managing (Links to an external site.). Retrieved from https://www.sba.gov/starting-managing-business

Discussion Question – International Strategies

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