HI5013 Managing Across Borders Assignment

HI5013 Managing Across Borders Assignment

HI5013 Managing Across Borders Assignment

Executive Summary

Being international assists in bringing clarity related to strategic benefits that include the capability for accessing new consumer markets, new suppliers as well as new partners. These immediate beneficial aspects will be creating as well secondary ones. To build a base of the customer in the new market assists in providing familiarity as well as associations that will be enabling added investments. Moreover, strategic challenges take place when an organization is functioning globally. Microsoft finds it increasingly challenging for having the flexibility as well as adaptability in the local periphery as they are broadening their international presence. Specifically, methods towards the development of strategic aspects as well as the allocation of resources will be struggling towards coping with the growing market diversity, customers as well as channels. (Jenkins, 2011) To overcome the challenge of slow decision making, the managers at Tesco taking into consideration the global arena might use video conferencing that is considered to be a great tool to assist teams in having better presence in meetings as well as providing the team members the capability towards communicating effectively taking into consideration the body language and tome of another individual. Therefore, video conferencing assists in speeding up the business as well as the faster execution of matters. Managers at Tesco has found out that in the global arena there might take several weeks for scheduling a meeting that is working in respect of everyone’s calendar. In addition to the lack of clarity discussed earlier, making of decisions can take place at a very slow rate from the perspective of global business. Managers at Tesco also face this challenge that to work mostly via emails makes it challenging for dealing with crisis matters and everyone gets involved in it. So, managers need to understand that from the global perspective, it is challenging to manage situations in the correct manner, which are considered to be delicate. A good number of executives that were interviewed for a study possessed a strong belief that the huge amount of skills, knowledge as well as experience within the international workforce of Microsoft is representing an invaluable asset. But it is very challenging to make the most of that asset. Simultaneously, Microsoft finds it very much challenging to deploy as well as develop talent in markets that are emerging.

Introduction

This assignment is discussing global organizations that are enjoying economic leverage from having the ability for investing in shared infrastructure that ranges from centers of research and development to functions regarding procurement. But with the increasing growth and development of Microsoft, there will occur an inevitable growth regarding complexity costs. Endeavours for standardizing the basic components of necessary functional aspects of sales as well as legal services will be clashing with the domestic requirements. Moreover, the markets that are emerging will be complicating matters, since operational aspects that are located there at times provoke regarding the expenses they must be bearing as part of the group centred in the developed world as well as the cost to comply with international standards and the managers that coordinate across distant geographies as well as loss regarding agility of the market that gets imposed through the adherence to global processes that are considered to be rigid. (Jenkins, 2011) A good number of executives that were interviewed for a study possessed a strong belief that the huge amount of skills, knowledge as well as experience within the international workforce of Microsoft is representing an invaluable asset. But it is very challenging to make the most of that asset. Simultaneously, Microsoft finds it very much challenging to deploy as well as develop talent in markets that are emerging. A significant number of executives of Microsoft think that they are not very efficient towards tailoring the recruitment process, retention process, training as well as development process in respect of various geographical locations. A recent study revealed that it is quite challenging towards the development of talent in respect of emerging markets at a rate that will be matching their anticipated development. Microsoft is a global organization is having the consciousness of a changing aspect that “local competitors” brands are now increasingly strong, and they are offering more senior positions in the domestic market.  Foreign direct investment is referring to the formal establishment of business operations regarding Microsoft on foreign locations that includes the development of factories, sales offices as well as networks of distribution for serving the domestic market in a country other than the home country of the company. (Iqbal, 2011) FDI is considered to be the most expensive assurance that Microsoft will be making in respect of an overseas market and it is distinctively driven by the target market’s size as well as attractiveness. A basic type of FDI is considered to be the foreign subsidiary that refers to an independent organization whose ownership is with a foreign organization (in this case, it is Microsoft). This step to go international will be assisting Microsoft in getting complete accessibility of domestic markets as well as giving the company an exemption from any laws or regulations that might have hampered the activities regarding foreign organizations.

HI5013 Managing Across Borders Assignment

Task 1

1. Identify and describe four specific challenges and opportunities that a manager may encounter.

From the global perspective, it could be stated that conducting business internationally gives rise to different opportunities as well as challenging aspects in respect of managers. For understanding this more specifically, identification, as well as the description of four particular challenges as well as opportunities that are encountered by a manager, will get discussed. In this regard, there will be two organizations that are taken into consideration. One of them is a renowned software company named Microsoft and the other is a famous retail organization having its presence globally known as Tesco Plc.

Microsoft

Challenges that are faced by Microsoft

1. Strategic confidence and stretch – To be international assists in bringing clarity related to strategic benefits that include the capability for accessing new consumer markets, new suppliers as well as new partners. These immediate beneficial aspects will be creating as well secondary ones. To build a base of the customer in the new market assists in providing familiarity as well as associations that will be enabling added investments. Moreover, strategic challenges take place when an organization is functioning globally. Microsoft finds it increasingly challenging for having the flexibility as well as adaptability in the local periphery as they are broadening their international presence. Specifically, methods towards the development of strategic aspects as well as the allocation of resources will be struggling towards coping with the growing market diversity, customers as well as channels. (Hayton, 2012)

2. People as an asset and a challenge– A good number of executives that were interviewed for a study possessed a strong belief that the huge amount of skills, knowledge as well as experience within the international workforce of Microsoft is representing an invaluable asset. But it is very challenging to make the most of that asset. Simultaneously, Microsoft finds it very much challenging to deploy as well as develop talent in markets that are emerging. A significant number of executives of Microsoft think that they are not very efficient towards tailoring the recruitment process, retention process, training as well as development process in respect of various geographical locations. A recent study revealed that it is quite challenging towards the development of talent in respect of emerging markets at a rate that will be matching their anticipated development. (Harrell, 2011) Microsoft is a global organization is having the consciousness of a changing aspect that “local competitors” brands are now increasingly strong, and they are offering more senior positions in the domestic market.  

3. Scale and scope benefits, complexity costs– Microsoft being a global organization is enjoying economic leverage from having the ability for investing in shared infrastructure that ranges from centres of research and development to functions regarding procurement. But with the increasing growth and development of Microsoft, there will occur an inevitable growth regarding complexity costs. Endeavours for standardizing the basic components of necessary functional aspects of sales as well as legal services will be clashing with the domestic requirements. (Hayton, 2012) Moreover, the markets that are emerging will be complicating matters, since operational aspects that are located there at times provoke regarding the expenses they must be bearing as part of the group centred in the developed world as well as the cost to comply with international standards and the managers that coordinate across distant geographies as well as loss regarding agility of the market that gets imposed through the adherence to global processes that are considered to be rigid.

4. Risk diversification and the loss of familiarity –Microsoft will be benefitting from a geographically diverse portfolio of business providing a natural circumvent in opposition to the volatility regarding domestic growth, the risk of the country as well as the risk of currency. But to pursue numerous advancing opportunities regarding market is taking global organizations such as Microsoft more into unknown risk areas that many find very challenging for evaluation. (Harrell, 2011) Moreover, methods that are considered to be of international standard, and having comprehensive risk management might not be the optimum means for dealing with market risks in which Microsoft, as a global company is required moving faster for grabbing earlier scopes.

Opportunities for Microsoft

1. Licensing and franchising – When Microsoft wants to enter a global market in a quick manner while considering limited financial as well as legal risks then it might take into consideration the licensing agreements with foreign organizations. An international licensing agreement will be allowing a foreign organization aka the licensee for selling the products of a producer aka the licensor or using its intellectual property like patents, trademarks, copyrights in exchange of royalty fees. One more famous method of global expansion is associated with selling franchises. Considering a global franchisee agreement, Microsoft will be granting a foreign organization the right for using a brand name as well as selling its products or services. (Cox, 2014) The franchisee is having the responsibility regarding every functional aspect but agrees to function in accord with the business model that the franchiser establishes.

2. Contract manufacturing and outsourcing – Due to increased domestic labor costs, Microsoft is manufacturing their products in countries where there are lower labor costs. This aspect is known as international contract management or outsourcing. With the advancement in information technology, there is also occurring outsourcing of non-manufacturing functions to nations having a lower cost of labour. Microsoft is having a growing focus on a huge supply of comparatively reasonably priced skilled labour for performing different business services like software development, accounting, as well as claims processing. (Griffin, 2015)

3. Strategic alliance and Joint ventures –A strategic alliance are considered to be an agreement within two organizations for pooling resources in respect of achieving business objectives that will be benefitting both the organizations. Alliance in respect of Microsoft assists in serving various purposes such as enhancement of efforts related with marketing, to build sales as well as market shares, to improve products, to reduce costs related with production as well as distribution and to share technology. Joint ventures are considered to be alliances where a separate entity is being funded by the partners. (Furnham, 2012)

4. Foreign direct investment and subsidiaries –Foreign direct investment is referring to the formal establishment of business operations regarding Microsoft on foreign locations that includes the development of factories, sales offices as well as networks of distribution for serving the domestic market in a country other than the home country of the company. FDI is considered to be the most expensive assurance that Microsoft will be making in respect of an overseas market and it is distinctively driven by the target market’s size as well as attractiveness. A basic type of FDI is considered to be the foreign subsidiary that refers to an independent organization whose ownership is with a foreign organization (in this case, it is Microsoft). This step to go international will be assisting Microsoft in getting complete accessibility of domestic markets as well as giving the company an exemption from any laws or regulations that might have hampered the activities regarding foreign organizations. (Frydman, 2013) Microsoft being a parent company is having strong control regarding the functional aspect of a subsidiary but while the senior managers from Microsoft often supervise functional aspects, many managers, as well as staffs, are natives of the host country.

Tesco Plc

Challenges that are faced by Tesco

1. Lack of clarity – It is common aspect towards the loss of crucial messages in translation while functioning with members of a team who speaks varied native languages. Due to weak connections of the phone as well as team members that are multitasking while doing conference calls showcases the aspect as to why there occurs distorted communication in the first scenario. (Freeman, 2010)

2. Slow decision making –Managers at Tesco has found out that in the global arena there might take several weeks for scheduling a meeting that is working in respect of everyone’s calendar. In addition to the lack of clarity discussed earlier, making of decisions can take place at a very slow rate from the perspective of global business.

3. Disjointed conflict resolution – Managers at Tesco also face this challenge that to work mostly via emails makes it challenging for dealing with crisis matters and everyone gets involved in it. So, managers need to understand that from the global perspective, it is challenging to manage situations in the correct manner, which are considered to be delicate. (Fernando, 2011)

4. Conflicting corporate culture –Manager’s at Tesco acknowledges the fact that great organizational culture is depending on continuous interaction as well as bonding in a team within the staffs. But this solidarity is considered to be very challenging in respect of Tesco being a global organization towards defining, implementing as well as ultimately achieving it.

Opportunities for Tesco

1. Putting action items and key decisions in writing – For overcoming the challenge of lacking clarity the managers at Tesco from the global perspective, is required following up the conference calls with clear, written communication of the result regarding the meetings ensuring that there occurs absolute clarity in whatever is being communicated in the meetings. (Frydman, 2013)

2. Communicating strategy and direction face-to-face whenever there is a possibility – To overcome the challenge of slow decision making, the managers at Tesco taking into consideration the global arena might use video conferencing that is considered to be a great tool to assist teams in having better presence in meetings as well as providing the team members the capability towards communicating effectively taking into consideration the body language and tome of another individual. Therefore, video conferencing assists in speeding up the business as well as the faster execution of matters. (Cox, 2014)

3. Picking up the phone– The managers at Tesco from the global perspective should acknowledge the fact that messages that are considered to be tough should never get communicated through email since there is a high risk of misunderstanding messages that are written. In this respect, again video conferencing comes to aid where live conversation can occur between two individuals sitting in two different countries that give a better understanding as well as more effective communication.

Conclusion

This assignment regarding global business opportunities is discussing the opportunities and challenges that are faced by global business organizations. To overcome the challenge of slow decision making, the managers at Tesco taking into consideration the global arena might use video conferencing that is considered to be a great tool to assist teams in having better presence in meetings as well as providing the team members the capability towards communicating effectively taking into consideration the body language and tome of another individual. Therefore, video conferencing assists in speeding up the business as well as the faster execution of matters.

References

Cox, S. (2014). Managing Information in Organizations. Palgrave Macmillan.

Fernando, A (2011). Business Environment. Pearson Education India.

Freeman, R (2010). Stakeholder Theory: The State of the Art. Cambridge University Press.

Frydman, R (2013). Rethinking Expectations: The Way Forward for Macroeconomics. Princeton University Press.

Furnham, A (2012). The Psychology of Behaviour at Work: The Individual in the Organization. Psychology Press

Griffin, R. (2015). Fundamentals of Management. Cengage Learning.

Harrell D., G. (2011). Marketing Management.  Simon and Schuster Pub.

Hayton, J (2012). Global Human Resource Management Casebook. Taylor & Francis

Iqbal, T (2011). The Impact of Leadership Styles on Organizational Effectiveness. GRIN Verlag.

Jenkins, D (2011). Managing Empowerment. Random House.