SM4008/LD4008 International Business

 Assignment Sample SM4008/LD4008 International Business: Contexts and Challenges

Introduction

According to Hung, et.al. (2011), globalization is currently at its most advanced stage now which mainly offers a variety of opportunities for all businesses who aim to expand in host countries. On the other hand, De Mooij (2010), stated that the comprehension of the culture is one of the most important aspects that firms should not ignore, especially when they are pursuing business in a different country.

The use of Socialization as an integration strategy

Socialization is often a tool used in the organization by employees to understand the roles they must adapt in terms of their needs and the organization’s needs. In most organizations, employees tend to have fixed roles, this may change as the organization changes and other employees are integrated into the culture.

Employers should use this socialization strategy as a tool to ensure that employees can interact with each other. Conflict and lack of collaboration will affect how the company functions so it is important to make sure the socialization process runs smoothly. The two teams should be given activities to get to understand each other and integrate seamlessly. The activities should help them identify the various roles that the employees can take and ensure that they reflect. This reflection should be self and reflect on skills other people have as well. This can help them to form a basis for the team to form.

Team formation is important to how the culture is formed. Especially when the culture is employee-led and more dependent on how the employees act. This is why employees need to be able to act as a unit. Socialization may be able to build bridges for employees to form bonds, trust each other and be able to work together in sync. This creates a harmonious environment where employees can discuss innovations and be creative. These activities need to be thoroughly planned and made in a way that helps them understand each other as a person, employee, and colleague.

Diversity Issues

Diversity Issues are a priority for all companies. Some studies have proven that diversity increases the innovativeness, productivity, and efficiency of the company. Diversity is very integral to the company. Sprint has always tried to ensure diversity in the company.

The diversity of the employees should be maintained even during the merger. The company’s diversity is not only important to the processes but also to understanding the consumers while expanding into new markets (Romani et al. 2019).http://LD4008 International Business Diversity allows for the product design and services to be not limited to one perspective. It helps the company understand how various cultures react to products and how to create them in a way that is appealing to the general public. The diversity of the employees should be maintained even during the merger.

This will be dependent on the employee culture and the organizational culture. The culture should encourage employees to have their voices heard. The culture should not be hostile towards people who are different or not from the majority. They should feel accepted in the organization and not be treated differently depending on their characteristics. There should be encouraging conversations about diversity (Risberg and Gottlieb, 2019).http://LD4008 International Business Diversity hires should start campaigns to increase the diversity hires and try to understand how the culture can be improved. The company should take an active part in trying to increase diversity. This can be done by encouraging color bind hiring and encouraging policies and regulations that take into consideration the cultures of the employees that are working in the organization.

Globalization and Cross-Cultural Management

Cross-cultural management is very important in today’s economy. The policies and regulations should not cater to a particular country. It should apply to various countries where the company is operating in. Especially in Sprint, this has been important as the culture is heavily employee-led.

This is why cross-cultural management should be smooth and done in a way that inspires the employee. The employees should work at their full potential, collaborate in teams and be creative. Management plays a very important role in helping to inspire this from the employees. This is why the management across the board must have a similar framework with adaptations made for their culture. The management should be able to push the employee toward their potential. This works both in terms of the company working in different countries and the companies having diverse employees in their own company.

The company should be able to be sensitive to the ends of the particular culture. Various cultures have varying perspectives on the way the environment in the organization works. The importance of understanding the work culture local to the country for culture is very important. As the slightest change in behavior may be offensive in another culture. In some cultures, the boss needs to dismiss the employees and in other cultures, the employee can leave when they finish work. So it is important to know about these cultural beliefs and practices to ensure that no one is offended or that any source of conflict is avoided.

Stress

Stress is a very important factor that should be taken into consideration when the merger is discussed. Stress is caused due to uneasiness that occurs for the employees around the merge as there is limited knowledge. The employees fear the job changes and culture changes that may occur. The company needs to be proactive to ensure that the stress of the employee during the merger is reduced. The changes should be outlined and mailed to the employees. They should be reassured that they will not lose their job and if there are any changes that may occur they should be informed of them well in advance and the company should try and have an open conversation about the concept, if possible.

Stress after the merger is also something that needs to be taken into consideration. The company before the merger ensured that there are ways for employees to be able to deal with their stress. There are working out places and places so the employees can take rest. This allows us to reduce the stress of the day. The flexible hours and leave help to contribute to reduced stress. These benefits should be retained during the merger to ensure that employees do not burn out.

Employee Resistance to Change

Employees are going to be very resistant to this change. Employees already have fixed roles and are used to a certain culture. Mergers bring about a sense of uncertainty and may cause conflict and resistance. This is why it is important to keep employees aware of the process and ensure that they have their questions clarified. They should be made aware of what will stay the same and what will change (Liu et al. 2019.) . http://SM4008/LD4008 International BusinessInformation is a very powerful tool in resistance. They should be made aware of the benefits the organization and the staff will enjoy from the merger. This is a nice way to get employees on board with the change. They can be told about how they will be able to improve as an employee and the organizational growth that will occur from the merger.

The employees should have orientation and training. This will help them feel more prepared for the change that is to come. The open-door policy should also be employed. Employees should be encouraged to reach out to management for any queries or concerns they might have in context to the change. They should also be encouraged to become part of the change and help their fellow employees with the change. The sense of initiative may help them concentrate and be able to make sure that the other employees also are less resistant to the change.

Upper Management’s Resistance to Change

The upper management’s resistance to change should be dealt with similarly. The upper management often is the key to helping the employees deal with the change. So they must understand that decision is the best possible outcome for the organization. The change will benefit them and the employees in the long term. The change should be explained to them and the various aspects of the changes should be made clear.

The upper management should be given the initiative to plan the change. They should be given a schedule and tasks to complete. This gives them the initiative to focus on and less time to delve into the impending change. This focus will ensure that they make the change step by step and do not have time to sit and wonder about the negative effects of the change. This step-by-step allows them to understand what may occur and what should be incorporated to improve the plan.

Communication Processes

The communication processes are very integral to the functioning of any organization. Communication forms the basis of how employees interact with each other, management, suppliers, and consumers. It is important that the communication processes are mapped out and ensured that they make sense for the environment the company wants to foster. The decision of what culture the organization wants to create determines how the workers will communicate. Meetings, emails, and posters are a few examples of how communication works in organizations. The communication schedule should be created and this will be based on financial reviews, budgetary discussions, marketing decisions, and other factors. The processes should be determined organisation-wise, department-wise, and team-wise. There should be someone in charge of these processes to ensure they are deciding on what’s best for the team and the employees. The company should adopt newer forms of communication so that process is simple and effective. There should be no room for mistakes or miscommunication. Miscommunication has been a very good source of turmoil in an organization, in some cases even conflict. This is not favorable to a company that is trying to create an environment of collaboration and creativity. This should be finalized before the merge and shared with the employees.

Suggestions for appropriate organizational design/structure to help facilitate any proposed changes

The organizational design should take into consideration the various aspects that were discussed. The organization should create a structure that ensures the organizational culture encourages employees to work together, be innovative, and be able to complete their goals. For this to work employees should feel valued and wanted by the company. The company should make sure the employee understands that their priorities the employees align with theirs. Diversity and Cross-cultural management encourages different perspectives and increases the creativity of the employee and the environment of the organization.

The company should also ensure that they monitor the employee’s stress. Employee burnout is a very serious problem especially in a new organization environment as there is so much to accomplish and often involves a lot more tasks to ensure that the process runs smoothly (Jung et al. 2019). http://LD4008 International BusinessThe company should ensure they can reduce the stress of the employee as it will cause the employee and the organization problems in the long run. This is why the communication processes should be stressed and decided before the work begins so employees have the means to communicate about their problems and can ensure they do not burn out.

Literature Review

Croucher et al. (2012) defined that culture may be defined as a part of the social norm or a kind of behavior of the people living in a society. The concept of culture has been considered to be the main notion in the field of anthropology which mainly hovers around a range of phenomena that are particularly transferred using social learning amongst the people of a society. On the other hand, Chaney & Martin (2013) have already considered culture to be the main nucleus of a whole society. The aspect of culture cannot be inherited but it can be learned from people around us. Apart from this, Bochner (2013) has defined culture as an aspect that can be learned from social interactions. It has also been said that culture mainly consists of beliefs, values, and certain customs. Culture differs from society to society. Kim et al. (2011) have opined that organizations need to study the culture of the country, in which it aims to make a market entry. The brand will fail if the company fails to understand the culture of the host country.

The concept of cross-cultural communication (CCM) is very much important when a company tries to have strategic importance for the organization which aims to grow in the global world of business. According to Aeneas & Sandín (2009), the concept of cross-cultural communication is very much important for all companies that aim for a diverse work environment and seek to compete in the global world. On the other hand, Reisinger & Crotts (2010), cross-cultural communication means having complete comprehension of the belongingness of the people in a particular culture, the main forms of communication in that culture, and the perceived notion of surroundings within the society. Frankel et al. (2012), stated that all successful companies mainly tend to work more efficiently when they understand the culture of the host country in a better way. A total understanding of the beliefs and customs helps the company to strategize its communication strategies. Shamim & Mohsin Butt (2013) have argued by saying that, the differences in the language that is spoken in the host country and the stated language that is upholder by the company poses a big challenge and a barrier, when the company is working in the market, especially when English is considered as the only standard language.

The cross-cultural risks faced by the companies:

When a company thoroughly ignores the cultural differences, then they have to face a very weak market share along with low or even negative return on investments. The other factors which can be posed as a challenge to the company may comprise all the missed opportunities, or the damage to the reputation, leading to productivity loss, or even the company can face legal issues. Hence it is imperative to study the probable cross-cultural risks which must be avoided by the company:

The Failure of adoption of the global models of business into the local markets: The behaviors of the consumers as well as their preferences differ from region to region and even from country to country. Hence when a new company enters into a new market on a global level, sometimes they fail to modify their business models according to the needs and demands of the local customers.

Failure the identification regional as well as sub-cultural differences: The barriers of culture can be considered both internationally and internationally. There can be variations in the demand based on ethnicity and gender which sometimes are overlooked by the company in their campaign and launch of products for the customers in that particular region.

Failure of understanding the local business practices: Apart from the customers, the cultural barriers differ in the business practices and customs as well, which includes regional, economic, political as well as regulatory differences.

Failure the identification of new opportunities: Cultural barriers may be the reason behind the missed opportunities faced by the company. Some of the companies also fail to look at the certain potentials of the market and such opportunities remain unacknowledged by the companies. Such missed opportunities can be termed due to the cultural differences faced by the companies.

  • Failure of understanding the local ethical as well as legal issues: Global companies sometimes fail to understand the local ethical as well as legal matters and issues and thus they fail to create an opportunity for their business in the host country.

IKEA’s failure in the US market

IKEA is termed as one of the best companies which have already operated in various regions of the world and has become successful in the majority of those areas. But it is no surprise that even such big giants make certain mistakes in operating across the globe. The toughest challenges it faced were during the time when it was trying to make a market entry in the United States of America. The company’s marketing team had strategized for a simulation process with the already existing marketing strategies in the US. But all its efforts went in vain as it was later discovered that IKEA was lagging to satisfy the customers of the US. The main thing that was needed to consider by the company was to offer customization abilities for the products purchased by the customers of the US.

On the other hand, when the company finally entered the markets US, they were faced with a huge demand from customers, who mainly preferred larger furniture in size. The main demand circulated was for the bigger-sized beds and closets. It was clear that the IKEA market researchers failed to perform extensive research on the market in the US domain before trying to enter the US market.

But after all the realizations, they stuck on the same strategy as was predetermined by the company, and this was the cause of its biggest failure. For example, The people of America are in favor of soft sofas, but the products that were produced and delivered by the company were hard enough to sit comfortably. Thus the products launched by the company were unable to meet the needs of the customers in the US. On the other hand, the size of the furniture was small and it did not cater to the needs of the big households in the US. Sauter et al. (2010) said that the importance of culture was ignored and prevented by the company, which posed a huge challenge for the company to survive in the US market. On the other hand, he said that the communication barriers were also the major aspect of its failure since, in some regions, there lies a difference in the non-verbal communication forms as well. Hence the marketers were unable to tap the customers even in their creation of advertisements for the product.

Conclusion:

Recommendations for IKEA:

Some of the strategies required by the company IKEA to mitigate the cross-cultural risks are:

Embracing Diversity: When a company has a diverse workforce, it poses a threat and a challenge in the aspects of customs, regions as well as communication. These situations are to be taken very seriously and the differences need to be respected across the entire arena of the business. The company when expands its business to a new location located in a different region of the globe, it is imperative for the company to respect the diversity and welcome the regional employees to their company and also serve the best products and services, according to the preferences of the local community.

Promotion of Open Communication: When a company is managing its business in different parts of the world, it is necessary for the company to mainly realize the importance of the language barriers and focus on implementing policies that would ease the communication process with the customers as well as the regional employees.

Thorough pursuit of Market Research: The company’s market analysts must go through thorough market research even before entering the market of another country. The preferences and demands of the customers of the host country need to be focused upon and then the business models which are appropriate for the host country need to be adopted.

  • Fostering stronger relationships within the work environment: The team spirit should be built in such a manner that all the employees from the different diversities work comfortably and can help each other and wave away all the cultural differences and work together towards a pre-set goal.

Conclusion

In conclusion, the organization should make sure its prime focus is the employee. The employees should be considered when planning the structure for the new organization. The structure will be in a way that ensures employees can work at their full potential. It will also encourage employees to be more creative and work as a unit to accomplish the goals of the organization. The listed issues should be taken into consideration and be outlined and determined based on the organisation’s needs. This must be done properly so that the company can function smoothly and continue to grow and increase its success.

References:

Hung, K. P., Huiling Chen, A., Peng, N., Hackley, C., Amy Tiwsakul, R., & Chou, C. L. (2011). Antecedents of luxury brand purchase intention. Journal of Product & Brand Management, 20(6), 457-467.

De Mooij, M. (2010). Consumer behavior and culture: Consequences for global marketing and advertising. Sage.

Dorling, J.L., 2017. Impact of psychological capital on the resistance to change during post-merger integration. Journal of Organizational Change Management.

Nikolaou, I., Vakola, M. and Bourantas, D., 2011. The role of silence on employees’ attitudes “the day after” a merger. Personnel Review.

Parola, H.R., Ellis, K.M. and Golden, P., 2015. Performance effects of top management team gender diversity during the merger and acquisition process. Management Decision.

Risberg, A. and Gottlieb, S.S., 2019. Workplace diversity and gender in merger and acquisition research. In Advances in Mergers and Acquisitions. Emerald Publishing Limited.

Romani, L., Barmeyer, C., Primecz, H. and Pilhofer, K., 2018. Cross-cultural management studies: state of the field in the four research paradigms. International Studies of Management & Organization, 48(3), pp.247-263.

Grotto, A.R. and Andreassi, J.K., 2020. Mix It Up? The Influence of Team Composition on Employee Perceptions of Stressors in a Post-Merger Environment. The Journal of Applied Behavioral Science, p.0021886320923370.

Liu, J.Y.C., Hsu, H.C. and Lin, J.L., 2020, June. Influence of Relationship Capability on Project Performance of Post-merger IS Integration. In International Conference on Business Information Systems (pp. 157-166). Springer, Cham.

Jung, J.I., Son, J.S., Kim, Y.O., Chae, C.H., Kim, C.W., Park, H.O., Lee, J.H., Shin, Y.H. and Ha, J.C., 2018. Changes of depression and job stress in workers after merger without downsizing. Annals of occupational and environmental medicine, 30(1), pp.1-9.

Croucher, S. M., Bruno, A., McGrath, P., Adams, C., McGahan, C., Suits, A., & Huckins, A. (2012). Conflict styles and high–low context cultures: A cross-cultural extension. Communication Research Reports, 29(1), 64- 73.

Chaney, L., & Martin, J. (2013). Intercultural business communication. Pearson Higher Ed.

Bochner, S. (Ed.). (2013). Cultures in Contact: Studies in cross-cultural interaction (Vol. 1). Elsevier.

Kim, Y., Sohn, D., & Choi, S. M. (2011). Cultural difference in motivations for using social network sites: A comparative study of American and Korean college students. Computers in human behavior, 27(1), 365-372.

Aneas, M. A., & Sandín, M. P. (2009). Intercultural and cross-cultural communication research: Some reflections about culture and qualitative methods. In Forum Qualitative Sozialforschung/Forum: Qualitative Social Research 10(1), p. 58.

Reisinger, Y., & Crotts, J. C. (2010). Applying Hofstede’s national culture measures in tourism research: Illuminating issues of divergence and convergence. Journal of Travel Research, 49(2), 153- 164.

Frankel, R. M., Flanagan, M., Ebright, P., Bergman, A., O’brien, C. M., Franks, Z & Saleem, J. J. (2012). Context, culture, and (non-verbal) communication affect handover quality. BMJ Qual Saf, 21(Suppl 1), pp. 121- 128.

Shamim, A., & Mohsin Butt, M. (2013). A critical model of brand experience consequences. Asia Pacific Journal of Marketing and Logistics, 25(1), 102-117.

Sauter, D. A., Eisner, F., Ekman, P., & Scott, S. K. (2010). Cross-cultural recognition of basic emotions through nonverbal emotional vocalizations. Proceedings of the National Academy of Sciences, 107(6), 2408-2412

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