MN7405 Management decisions and risk analysis Assignment Sample
MN7405 Management decisions and risk analysis Assignment Sample
Introduction
In this area of globalisation, businesses are emphasising expansion in the international market to enhance financial stability and ensure business growth. The following assignment would be focused on the business expansion of Alpha Inc. in countries like Japan and Turkey. The organisation has identified that global demand for its services has increased after the Covid-19 lockdown, along with the increasing use of digital technology.
Hence, organisation is willing to open new subsidiaries in Turkey and Japan. This study would critically analyse cultural issues that would influence managers in the headquarter of the organisation to take negotiation activities in its subsidiary countries. Additionally, a clear evaluation of management approaches that would be beneficial for the company to ensure proper employee relations would also be included.
Part A- Critical evaluation of theory-1000 words (40%)
According to the Lewis model, cultural norms, and patterns have an impact on how people behave. On the other hand, cultural differences across nations may have an impact on how enterprises based in foreign markets engage in negotiations. According to the Lewis model, there are three types of cultures in the world, such as linear-active, multi-active, and reactive (Lewis, 2019). The stages of negotiation often involve preparation, conversation, agreement, action implementation, assuring successful outcomes, and others.
Subsidiary in Turkey
Turkish culture is more closely related to European nations due to their romano-christian roots (Leduc, 2021). Most Turks consider themselves closer to Europeans than the Middle Eastern or Asian populations due to their European ancestry. This makes the workers of the nation significantly more accepting of other Europeans such as the French.
Despite this, acceptance of the concept of Europe, both the French and the Turks maintain their own distinct identities as can be seen in the independent nature of France and Turkey both economically and culturally in the globalised world. The cultural aspects here can be noted to be both traditional practices as well as religion and staunchness of religious beliefs.
Most of the Turks are Muslims, Turkey is a secular nation with religious and political secularism. However, the majority of them; 75% are Sunny Muslims (Guides Global, 2022). However, the Turks are much more traditional and religious by nature. Along with having a traditionally inclined country Turks adhere to their local customs and traditions drawn from their rich history.
French culture, on the other hand, is not as traditional but maintains its distinct French values. Moreover, observing the fact that the two countries cultures are very different from one another. Therefore, while promoting operations linked to hold business meetings in Turkey, the managers of Alpha can witness problems.
However, despite such challenges, it has been determined that Turkey is considerably alluding to a multi-active plot, according to the Lewis model (Glinkowska-Krauze et al. 2020). Multitasking nations engage in a variety of activities at once, are highly emotional, and engage in emotional conflict.
This nation is particularly focused on its citizens and exhibits body language that is uninhibited. Given that France places a strong emphasis on culture, this background suggests that French managers must take this component of marketing into account while supporting any negotiating actions.
Due to their close proximity, most Turkish people are able to communicate in English as a foreign language (Shinnar and Zamantılı Nayır, 2019). This would help in the ease of communication with the managers of Alpha Inc. This is significant as English may be used as a communication bridging language between the two parties. However, French people are not well versed in English and may choose to train the employees in either English or Turkish, so that the communication barriers can be overcome.
Despite this, the Turkish culture is comparatively more accepting of foreigners and foreign cultures leading to an ease of management of the employees. This also results in managerial actions being carried out without the inflexibility of the local culture. This is also because Turkish society is no stranger to corporate culture being significantly more westernised in their approach to life. Hence, Turkey is a lucrative market with high demand for software services with a more flexible culture that Alpha Inc. managers can use to their advantage.
Subsidiary in Japan
Alpha Inc. needs to be aware of a few things, as they proceed to open up a subsidiary in Japan. One of the first things regarding Japan is that the culture is a homogenous culture and most of the people in japan are Japanese with shared values and cultural ethics (Sasaki et al. 2021). Hence, the culture is still largely traditionalist and monolingual.
This creates two distinct issues for management in general, such as communication issues. Since most of the workers are monolingual, they would only understand, speak, read and write Japanese. Hence, the management in senior ranks needs to be well versed in the Japanese language in terms of speaking, reading, and writing to be able to be effective in their managerial roles.
This in itself is a challenge as Alpha Inc. needs to either spend extra resources in skilling and training of their employees. This requires increasing their overhead expenses, and it is a highly time consuming task (Stachová et al. 2019). This could hamper the fast mobilisation of human resources into Japan to set up their subsidiaries. Additionally, Japanese culture puts special emphasis on non-verbal communication during interactions.
There is a part of Japanese culture focusing on politeness known as “Keigo” roughly translated as “polite language”, which includes things such as etiquette and manners (Kusumarini et al. 2021). For example, pointing chopsticks at someone while talking during meals are considered highly offensive, similarly pointing fingers or pens at people while talking is considered equally offensive. These are cultural barriers and may cause interpersonal conflicts among the employees that may prove to be harmful to team cohesion and work. Hence, solving conflicts can become more difficult for the management.
The managers at Alpha Inc.’s headquarters need to comprehend the cultural traits and reacting behaviour of the Japanese people when conducting negotiations in the Japanese subsidiary. Officials of Alpha’s subsidiary in Japan should adhere to local cultural customs; failing to do this may harm company operations. The second issue is that of an aging population and the strict hierarchical nature of Japanese society (Verbeke et al. 2020). Japanese society is dominated by mostly by people in the later halves of their life.
This makes the society highly traditional in nature stopping the influx of new ideas and customs. This can be a tough challenge for the management in taking quick action to solve any internal or external issues. The strict hierarchical nature of Japanese society may also pose an issue in interpersonal relations creation. Therefore, Japan is not an easy country for foreign managers to negotiate, the addition of Japanese managers may ease the issues with efficiency.
Part B- Decision-making analysis- 1500 words (50%)
- Power Interest Matrix
Stakeholders play an important role in making effective decisions, preventing project delays, risk management, and other aspects that have the possibility to result in positive organisational performance (Prud’homme et al. 2021). Considering the importance of stakeholders in business, stakeholders analysis for the Japan and Turkey subsidiary of the organisation needs to be illustrated; the use of the power interest matrix is helpful in this regard.
Power Interest Grid considering the Turkey subsidiary of Alpha Inc.
Figure 1: The power interest grid considering the significance of the stakeholders of Alpha’s Turkish subsidiary (Source: Created by the researcher)
The power interest grid of Turkey clearly projects that the government financial institutes and the IT ministry are considered as active consultants, as they have high power. This is because the Turkish government has been providing great support to businesses (Daily Sabah, 2020). Apart from that, the IT ministry and financial institutes also have high power. Organisational managers of Alpha also need to emphasis stakeholders such as potential investors, suppliers, external consultants, environmental agencies, and trade unions, as they are considered to be in the regularly engaged section of the power interest grid.
For example, environmental agencies such as Anadolu Agency, which concerns with climate change, can influence the business of the Turkish subsidiary of Alpha (Bianet, 2022). On the other hand, community citizens of Turkey and religious bodies should also be considered in the Turkish subsidiary of the organisation; however, they have low power and interest. Most importantly, customers and employees are the most influential stakeholders, as they have the capability of driving business success (Boudlaie et al. 2020). Hence, customers and employees are considered in the maintain interest section of the power interest matrix considering their high interest in the business of Alpha Inc.
Power Interest Grid considering the Japanese subsidiary of Alpha Inc.
Figure 2: The power interest grid considering the significance of the stakeholders of Alpha’s Japanese subsidiary (Source: Created by the researcher)
In the Japan subsidiary, the stakeholders of Alpha Inc. would be potential suppliers, financial institutes, and the community where the business would be operated, potential investors, NGOs, consumers, and government agencies. Specifically, the leading financial institutes of Japan are Mitsubishi UFJ Financial Group, Chiba Bank Sumitomo Mitsui Financial Group, Fukuoka Financial Group, and others (Vaidya, 2022). Financial institutes among these would be a stakeholder of the Japan subsidiary of the organisation, which would help the organisation to maintain its financial resources for business management.
Figure 3: Leading financial institute of Japan that has the potential to be a stakeholder of Alpha Inc. (Source: Vaidya, 2022)
Based on the above illustrated power interest grid, financial institutes have high power to influence the business of Alpha’s subsidiary in Japan. Potential investors have high power as well as interest in the business success of the Japanese subsidiary of the company. The government is also considered an active consult, as it has high power. Additionally, stakeholders such as potential investors and potential suppliers have high interest and power.
In accordance with the study of Dai et al. (2021, p.7), corporate customers are considered as one of the most significant types of stakeholders. This is because customers have the ability to positively contribute to business success. Hence, customers are considered as one of the most influential external stakeholders, who are in the maintained interest section, along with employees who are responsible for business operations. Lastly, citizens, community, and NGOs are in the keep informed section of the grid, which should be considered by the organisation.
- Suggested suitable approach for Japan and Turkey
Best fit and universal approaches can be taken by businesses in order to maintain their operations in international marketplaces (Malik, 2022). Based on the stakeholder analysis considering the power interest matrix, stakeholders of both of the countries have been identified. In particular, in the Turkish subsidiary, most influential external stakeholders, IT ministry, the government financial institutes, trade unions, the community, potential suppliers, investors, employees, customers, community, and others.
On the other hand, the stakeholders’ analysis of the Japanese subsidiary of the organisation indicates that it has some differentiations in the list of stakeholders. This is because the power interest Matrix indicates that in the Japanese subsidiary of Alpha potential suppliers and investors have high power and high interest. While, on the other hand, along with potential investors and suppliers, external consultants, environment agencies, and trade unions also have a great importance, in the Turkey subsidiary. Considering the difference in the list of stakeholders, the best-fit approach is considered to be one of the most influential for the subsidiaries of Alpha in both of the countries.
This approach helps businesses to interlink the HRM practices of different subsidiaries with organisational strategic goals (Oppong, 2018). Moreover, the best-fit approach could help managers of headquarters to take suitable strategies in different subsidiaries that are relevant to the situation and the best fit. On the contrary, the universal approach cannot be helpful for the organisation as the stakeholders’ list of the organisation has differentiations in both of the countries. Hence, with the adoption of the best-fit approach, the headquarters of Alpha in France would be able to properly manage the overall business activities in Japan and Turkey subsidiaries.
- Evaluation of the influence of stakeholder power on Japan and Turkey
| Factors | Japan | Turkey |
| Political factors | ● Stable democracy reflects the existence of political stability
● Political stability of Japan is standing at 1.03 points (The Global Economy, 2022) |
● Declining political stability (The Global Economy, 2022)
● Separation of powers in the political system |
| Economic factors | ● Second largest economy of the world
● Growth of software companies and IT sector |
● GDP growth of 815.27 billion dollars (Trading Economics, 2022)
● Extensive growth of the IT market |
| Social factors | ● Strict social stratification
● Humble nature of communication |
● Maintenance of collective social structure
● Increasing poverty limit with 10.2% (Macro trends, 2022) |
| Technological factors | ● Distinctive technology advancement
● Excessive focus on research and development (World Bank, 2022) |
● Focus on research and development for technology advancement
● Increasing digitalisation throughout the nation |
Table 1: PEST analysis of Japan and Turkey
With regards to the entire PEST analysis as highlighted above, it can be reflected that the stakeholders in Japan are comparatively more potent as compared with Turkey. The prime reason behind this stakeholder power reflects the existence of positive political stability in the Japanese market.
On the other hand, ongoing political instability has been raising questions in terms of considering the effectiveness of Turkey to ensure flexible IT industrial operations (The Global Economy, 2022). This aspect has been playing a negative role in terms of signifying the IT industry of Turkey to create a supportive business environment for companies like Alpha INC and others.
As highlighted previously, Japan is recognised as the second largest economy in the world with a distinctive growth of software and IT industry. This attribute has eventually enhanced the accountability and credibility of the Japanese market in terms of being considered as having greater stakeholder power. For evidence, it can be highlighted that the IT market in Japan was expected to grow by USD 130 billion by the end of 2019 (Statista, 2022).
Apart from that, the sales of the software industry in Japan are considered to be 16.7 trillion Japanese Yen as per the reports of 2022 (Statista, 2022). This evidence signifies prospective advancement of Japan compared to Turkey to ensure the stakeholder power and influence throughout the IT industry.
With regards to this concern, the subsidiary of Alpha Inc can be expected to experience increasing efficiency and production in the Japanese market under the lights of highly efficient stakeholders with high interest and power. The power matrix presented previously has eventually highlighted the status of the Japanese IT stakeholders.
Moreover, the communicative nature in Japan is extremely humble where strict social stratification can also be notified. This aspect would be highly supportive and beneficial for the Japanese market with a subsequent focus on creating a supportive business atmosphere. On the other hand, the Turkish market is notified to experience an increasing poverty limit that might create significant obstacles for the growth of information technology as well as digitalisation throughout the country to a certain extent (Macro trends, 2022).
Based on the overall shreds of evidences, it can be stated that Alpha Inc might experience high interest and power for the it stakeholders in Japan where is the Turkish market would include considerable influence of the poverty limit as well as separated powers in the political system.
C. Evidence of contribution to module community- 10%
- Contribution to the academic community: Provide three screenshots of your contribution to the weekly discussion on Blackboard- (5 %)
- Describe how useful other students’ contributions were to develop your knowledge: Provide screenshot evidence of your response to a discussion board that you found useful to support your points here. (5%)- 500 words
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