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Globalization is the term that refers to the expansion of business across borders. The companies that expand its business from the country of origin to other countries than the company is said to expanded in global areas. Now, if the company starts its operations in another country than the management of the company needs to consider different areas and functions to plan accordingly. This is because the functioning of the company needs some of the modifications when the company has to manage across borders. The reasons may be the difference in culture, people, needs, the way of working, market etc. There are many issues that need to be considered by the managers when the company decides to operate in another country. Several researches need to be done by the managers of the company in order to develop the skills and to plan the functions for global activities and operations of the firm.
Strategies and globalization:
The first issue that can be considered by the managers is the strategies that should be opted for globalization. For developing the strategies, it is important to know about the reason for the globalization of the company. The reason for expansion of business can be reactive or proactive. Telstra is the company that serves the customers with its services in different countries. The company is based at Australia and very successfully expanded its business overseas. This company uses the reactive approach for globalization. The company believes that it is not only expansion of the business that is the reason for the globalization but it’s the competitiveness that is there is the market. (“community and environment”, 2017) This approach is called as reactive because the company is going global in reaction of the competition that exists in the market. On the other hand, BHP Billiton is the mining, metal and petroleum firm, that have the strategy of expansion in order to own and operate large, long-life, low-cost, expandable, upstream assets diversified by commodity, geography and market. This approach is called as proactive approach because the company is not making the globalization strategies in reactive manner of the external forces but have its internal approach of expansion. (Brewster, Sparrow, & Vernon, 2007) According to the reasons of going international, the managers have to make the strategies for entering the international market. To enter the international market, either firm has to merge and acquire the companies that already exist there or have to start its operations in another country. As far as Telstra strategies are considered, it has been observed that the company focuses on acquiring the firms as well as creating the joint ventures. The company acquired Pacnet Ltd. in order to enlarge the customer base of the company in Asia and also started a joint venture with Telkom Indonesia to cover that region. Another strategy to expand in international market was the strategy of investment. The company focuses on investing in the businesses that complements the company’s strategy. The company has yet invested in around 20 companies in Australia and overseas to expand its business. BHP Billiton also uses some of the strategies like acquiring other companies to expand the business. The company not only chooses the emerging markets but also looks at the transportation and other facilities to start up a new business. Globalization is the technique that facilitates the companies to grow as well as to compete with its competitors. Some of the companies make international expansion in order to acquire the opportunities available in the international market and some just do it in order to withstand the competition or to follow other multinationals. The reason for expanding the business becomes the foundation for the strategies adopted by the company to move global. The globalization of the company makes the mergers to play their part in researching about the reasons and aligning the strategies with the globalization approach so that it facilitates the company to manage across the borders. The basic management challenges that have been faced by the company in terms of strategy formulation are to evaluate the future prospects and to decide over the various alternatives available in front of the company.
Operating across borders:
The next key issue that needs to be assessed by the managers in order to expand the business of the company is operating across the borders. After analyzing the reasons and making the strategies, the next step is to analyze and assess the operations. There are various influential factors exists that affect the operations of the company across borders. It is not only the company functions but other external factors such as cultural differences and the government legislations of the host country as well as the foreign country also affect the operations of the company. (Caligiuri, Lepak, & Bonache, 2010) As far as Australia is considered, the Trade Practice Act inhibits the practice of mergers and acquisitions on the grounds that such practices should not restrict the competition in the market. Therefore, it is very important for the Australian companies to take expansion decisions very carefully and being competitive in any of the way. Through this Act, the Australian government identifies the reasons behind the mergers and acquisition stakes place by the Australian companies and target only those companies whose reasons are not acceptable on the grounds of unfair competition in the market. It is essential for the company to merge with other companies or to make a new venture with other in order to expand the business at international markets. BHP Billiton is the company that has around 35,000 employees working for the company in around 30 countries. Thus the company’s management needs to consider the cultural values and the environment of the country where the company wants to start its operations. The biggest merger in the history of BHP Billiton was the merger of BHP and Billiton. BHP was the Australian based company that merges with Billiton, a European company. At the time of merger, company faces a lot of challenges in terms of management. ("BHP Billiton | Work with us", 2017)This is because, the merger occurred not only with physical approach it also results in merging the operations. The main concern would always be the human resource operations. The managers need the hire the employees according to the company policies but also needs to consider the cultural policies of that country as well. This in turn may results on differentiation between the activities and operations of the same firm in different countries. In order to overcome the issue, BHP Billiton hires the employees at the managerial level from the host country and sends them to the foreign country so that they can train the local employees about the company policies. Telstra’s joint venture with Telekom Indonesia was a great success because of the effective management of the operations.(“company and environment, 2017”)The company focuses on merging the operations along with the cross cultural integration that supports the working of the people from the host country as well as from the local country where the business operates. Various problems may occur at the time of developing joint venture such as difference in strategies and goals, different in technology used, difference in skills etc. the company should either give power to one of the culture or either mergers the cultural factors of the two destination so that there will be no conflicts among the operation teams.
Staffing and Training:
The third issue that has been considered is staffing and training for global operations. When any company expands its business to international market, it also needs to shift their operations in the foreign country. This requires hiring of the employees for conducting those operations. It is not necessary that hiring and staffing process is always remain similar in every country, it may differs according to the policies of that country and act as the challenge for the management to take staffing and training decisions. As far as international employment patterns are considered, there is so much difference based on cultural differences, government policy differences etc. culture of the country depicts the nature of the organisation and the working people in that country. Government policies also frame the foundation of the staffing framework in the country. As far as Australian policies are concerned, the Disability Discrimination Act 1992, Sex Discrimination Act 1994 etc are some of the Acts that need to be involved while recruiting the employees in any of the Australian companies. Telstra is the company that considers all such laws framed by Australian government. The major key issues that become the challenge for the management of the companies are difficulty in managing the disparities overseas, handling the expatriates and decision making processes at different regions. Different approaches have been used by the companies in order to manage the workforce in different regions. Telstra is the company that uses ethnocentric approach for such purposes. This approach allows the company to send some of the home country nationals as the expatriate mangers to the foreign country in order to train the employees. (Schuler & Jackson, 2006) This results in simpler management of the process outside the country but restricts the development opportunities of the local mangers to achieve higher posts. Another approach is polycentric approach. This approach deals with employing the local managers at the higher positions. This is an advantageous approach as the local managers know about the local environment as well as they are more acceptable by the staff working in the host country rather than the home country manager. This also has some of the disadvantages as it is difficult for local mangers to understand the concept and processes of the home country. Another disadvantage is that it restricts the chance of having expatriate experience of the home country managers. Another important approach that can be used by many companies is global staffing approach. According to this approach the company recruits most appropriate manager regardless of their nationality. This is the best approach as this allows the company to recruit the best for the operations of the company. Many of the times expatriate failure occurs due to some of the reasons. The most important reason that needs to be considered by the managers is training of the expatriates. Training the employees with the cross cultural awareness is very important before their departure. The training needs of the expatriates should be assessed by the HR department of the firm in order to train them regarding the skills and knowledge that are required by the expatriates before their departure to the host country. It has been analyzed that the mars need to be very effective in the host country in order to conduct al the operations well. The most critical factor that needs to be considered is the coordination between the expatriate manager and the local employees. Local employees find it very difficult to deal with the expatriate manager as he is from different culture and background. This leads to urgent need of training of the local employees regarding the management roles so that they can handle the host country operations by themselves with the guidance of the headquarters. (Silver, 2011)
Expatriates and employment relations:
The above discussion leads to a new key issue that should also be considered by the managers while managing across borders. This issue is the coordination and the relations between the expatriates and the employees in context of global HRM or International Human Resource Management. For better understanding of the issue, it is very important to know about the migration policy in Australia. This scheme suggests that the Australian companies can hire people from overseas in order to overcome the shortage of skilled regional people. This scheme not only benefited the companies but also benefitted the people from overseas as they were very much satisfied with working and settling in Australia. This is said to be a good opportunity for the employees with appropriate qualifications and skills to bring out the multicultural workforce among the Australian companies. Telstra is the company that took active participation in the program known as capitalizing on culture. (“Community and environment, 2017”) This means that the company believes in managing the cultural diversity among the workforce. Now, this diversification among the workforce increases the responsibilities of the Human resource managers of the company so as to maintain and develop the employees with different culture and background. This acts as the challenge for the human resource managers. The term Human Resource Management has been replaced with the term International Human Resource Management. The HR manager needs to develop the policies in such a way that considers the culture of the home country as well as the country overseas so as to manage the balance. It is very important for the managers who are going overseas that they maintain their interests and should concentrate on what they have sent for. Expatriates have some of the personal issues that also need to be resolved by the International Human Resource Department of the company. These personal issues include the school admissions of the children; accommodation for family etc. another consideration is about the reverse cultural shock. When an expatriate returns back, he faced the cultural shock again in revere sense. Now the family has to adjust again with the old culture and social environment. Therefore, training needs to be provided to the expatriate at the time of departure as well as at the time of returning back so that he can be able to handle the cultural shock from both the sides. BHP Billiton is the Australian oil and gas Company that focuses on integrates approach for managing the diverse workforce and maintaining the coordination between expatriates and the employees of host country. ("BHP Billiton | Work with us", 2017) It is very mandatory to use the overseas experience of the managers in order to serve the customers at the global level. The coordination between the employees and the expatriate managers can only be maintained if the management frames the global committee to manage the people overseas. The companies like IBM that generates more than half of their revenues from foreign countries have to extract the knowledge gained by the overseas managers in order to use them for the company’s operations. To conclude, it can be said that the global teams provide better opportunities for the company to compete with the competitors overseas. It also helps in using the diversified knowledge for resolving some of the issues and conducting the operations that can prove to be successful for the company. The support programs by the company for the expatriates help them to adjust in the new environment as well as results in better understanding of the overseas functions by the expatriate managers. The diversified workforce at the top management level of the company is very essential to maintain the coordination and relation between the expatriates and the employees of the local country employees.
Motivating and leading across borders:
The last issue that needs to be discussed is the practices that should be practiced in order to motivate and lead the employees overseas. The managers have to take this into consideration for manage the diversity of the workforce. The motivational and leadership concerns of the employees are related to their culture and background. Even in the same country, different employees get motivated by different methods. This becomes a challenge for the managers to deal with such diverse practices to motivate and lead people. Planning and implementation of the process is not the only job of the managers, they have to maintain the working process cycle with same efficiency and thus need to motivate the staff and lead them to perform effectively. As far as Telstra is considered, it is the company that believes in team efforts and development, the company suggests that they can achieve more and efficient goals with the team work and thus their motivational strategies is the development of the team as a whole. They do not only believe in providing monetary rewards to the people but their motivational strategies involve flexibility or work, discounts on purchase of company items etc. Provision of growth opportunities is another such practice that can motivate the Telstra employees to stay in the company and to perform better. (Steers & Nardon, 2006) There are many theories such as Herzberg Two Factor Theory, Maslow needs Hierarchy theory etc that assist the company managers to incorporate the motivational strategies to the company according to the requirements of the employees. Leading the employees is also a great practice to be done that affects the working of the employees at the workplace. Managers need to use the most appropriate approach for leading the employees considering their culture, background, skills etc. many researched have shown that similarities in leadership and motivational requirements exists across nationalities. It is not necessary to deal with extreme approaches for different nationality employees. This is because the basic needs and requirements of the employees from their job at every place are same. For managing the overseas employees, the managers need to integrate the cultural requirements of the people and forms the policies in such a way that compliments and consider the requirements and needs of all the employees of host and home country. (Vance & Paik, 2006)
It has been concluded with the discussion that the decision to expand the business results in enhancement of the manager’s job. They need to plan every single thing according to the overseas nationalities. They have to face many challenges in terms of recruitment, training, motivation etc. The major aim for the managers in this context should be align the strategies of the company with the globalization techniques. It is very important for them to research deeply about the external as well as the internal environment of the foreign country where the business needs to be expanded and thus have to integrate the practices in such a way that involves the policies of every nationality.
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Vance, C. & Paik, Y. (2006). Managing a global workforce. Armonk, N.Y.: M.E. Sharpe.
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BHP Billiton | Work with us. (2017). BHP Billiton. Retrieved 18 January 2017, from http://www.bhpbilliton.com/our-approach/work-with-us
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