Marketing essay on: Altomi Associates
When the firm i.e. (Altomi Associates) has recognized the target countries where it wants to expand its operations & grow, then, Altomi Associates should use certain entry as well as expansion strategies in order to establish the organizational structure & the management policy which would best suit the country in order to have a competitive edge as well as capitalize on its value creation. There are various ways through which the company i.e. Altomi Associates could enter into a particular region or a country. Some of the entry modes have been listed as under:
Þ Franchising (various modes of franchising are master franchising, area development, multi-unit franchising, etc.),
Þ Direct ownership,
Þ Management Contracts, and
Þ Combinations of the above mentioned basic modes.
Some of the entry modes which are particularly used in order to enter into the foreign market & would have significant result at Altomi Associates would occur by using any of the following four ways. They are as follows:
Þ Licensing
Þ Exporting
Þ Direct Investment
Þ Joint Venture
Licensing:
One of the major ways through which Altomi Associates could establish itself in the BRIC countries would be through fair licensing. Under this entry mode, licensing gives a green signal to target the products which are being used by the licensor.
Licensing helps the target company in order to provide a wide scope of expansion as well as increased Rate of Investment. The disadvantage with this entry mode is that, when the licensee manufactures certain goods & services, promotes the products then the marketing activities are lost.
Exporting:
Exporting is one of the simplest & traditional ways through which any company would enter the foreign markets. It is one of the direct method through which the deal of goods produced could be done into another country (Berry & Parasuraman, 1991).
It refers to one of the oldest ways which is there in practice from decades of now. Exporting is a traditional as well as an established technique for exploring the foreign markets. It would be one of the easiest ways through which Altomi Associates could establish in the well known & growing economy i.e. BRIC Countries. It would also act a cheap mode in order to enter in the BRIC Countries (Berry & Parasuraman, 1991).
In this entry mode majorly four elements are involved. They are as under:
Þ Government
Þ Exporter
Þ Transport provider
Þ Importer
Joint Venture
Another entry mode which would help the Altomi Associates to establish in the target market (i.e. BRIC Countries) is through joint ventures.
There are certain basic motives of joint ventures. They are as under:
° Easy entry in the target market,
° Reduces the risks & shares the rewards,
° Sharing of the technology,
° Product development, &
° Abiding by the rules laid down by the government authorities.
This type of entry mode would also help in the easy accessibility of the distribution channels, political benefits, etc (Berry, & Parasuraman, 1991).
Some of the potential problems which might arise due to the implementation of this entry mode would include the following:
- clash in the working cultures
- in adequate support from the parent firm
- conflict over asymmetric new investments
- mistrust over proprietary knowledge
- performance ambiguity – how to split the pie
- ambiguous questions when to dispose of the relationship
Some of the reasons why the Joint ventures do not work in the BRIC Countries & while promoting the Altomi Associates certain conflicting areas would pop up in order to compete in the well established market are as follows:
- In case of JV’s the partners tend to maximize their own share of interest rather than taking into consideration the shared profit maximization ratio. The companies are keener towards increasing their interest as well as to have a fair competitive edge in the education sector as a whole (Aliouche, 2001).
- In case of JV’s both the companies would like to protect their sole assets rather than looking in to the shared resources.
- If the Altomi Associates merges with any of the leading educational centers as listed above in the report, then the joining would opt to have a fair control over the whole process of joint venture (Aliouche, 2001).
1.1 Appropriate HR strategy
1.2 Issues in opting HR policies & practices
Irrespective of the Human Resource strategy opted at Altomi Associates, some of the common issues will arise within the enterprise. The list of the common issues which would be seen at Altomi Associates has been highlighted in this section of the report. They are as follows
Þ Productivity: The main goal of any origination is to attain high levels of productivity by managing the human resource department in an effective as well as efficient manner. Therefore, maintaining optimum levels of productivity would be referred to as one of the tedious tasks for the manager at Atomi Associates.
Þ Recruitment: It has been seen that, managers are responsible for employee recruitment. One of the critical aspects for managers is to find various ways to recruit people from all across the globe. In today’s competitive environment, enterprises face high levels of problems due to increasing globalization. In order to recruit one of the best employees according to the specifications for Altomi associates, organizations offer benefits in terms of increased packages, incentives, low levels of risks, etc.
Þ Training: Training refers to one of the most important aspect which shall be taken into consideration by every enterprise. Training would be referred to as one of the crucial aspects which shall be implemented by the HR manager. The HR manager at Altomi Associates shall determine various training and seminars which would not interrupt the budget of the organization. The training methods shall be such which must be within time as well as budget of the company.
Þ Discrimination: It has been seen that, most of the enterprises value diversity as it would help to generate new ideas which would help to enhance the productivity levels. One of the major challenges for the modern departments is to handle the various cases of discrimination as Altomi Associates is planning to widen its scope in other countries such as Brazil, Russia, India & China.
Þ Resolving conflicts: Resolving conflicts would be referred to as one of the biggest issue facing the enterprise. Since, Altomi Associates is thinking to widen its scope of operation in other countries; the number of conflicts which might arise would be high in number. If the conflicts are not resolved within a stipulated time frame, number of resignations, firings will happen which would be considered as loss for the organization.
1.3 Factors in developing internationalization
Businesses are affected by external environment. Therefore, some of the factors to be taken into consideration while developing international policy have been discussed in this section of the report. They are as follows:
Þ Social factors: While widening its scope Altomi Associates shall keep in mind the changing social structures of the countries i.e. Brazil, Russia, India & China. Certain factors such as age, gender, income group etc shall be kept in mind while understanding the changes within the market situations. Altomi Associates shall take into consideration the lifestyle, language, religion & lifestyle patterns in order to have successful business management.
Þ Legal factors: The second factor which shall be kept in mind refers to the legal factors influencing Altomi Associates. In order to have a successful business operation, Altomi Associates shall keep in mind the various legal issues faced within each country (i.e. BRIC). It is quite important for Altomi Associate to be aware of the changes in consumer protection legislation, employment law, health, safety & environmental legislation.
Þ Economic factors: The third factors which shall be kept in mind by Altomi Associates are the economic factors. These factors will portray the fluctuations within the countries. Various types of strategies shall be used so as to keep in mind the fluctuations. Some of the factors such as changes in the rate of interest, wage rate, rate of inflation, etc shall be kept in mind so as to see its long term sustainability within the countries.
Þ Political factors: Political factors in Brazil, Russia, India & China shall be kept in mind by Altomi Associates. The political factor influences the functioning of the enterprises. Political factors such as stability in the political environment, spending power of the consumers, etc shall be kept in mind by Altomi Associates. The factors mentioned above shall help Altomi Associates to influence regulation of the businesses.
Þ Technological factors: Adoption of new innovations & inventions will affect the business strategies in the best possible manner. Applicability of the modern technologies such as better methods to communicate, etc will help Altomi Associates to have long term control amongst the BRIC countries. Technology will help Altomi Associates to attain high levels of competitive advancements.
1.4 Challenges faced by MNC’s
Cross-cultural teams can have their fair share of problems once the novelty of interacting with new people fades. From simple issues like understanding language idioms to more complex work culture issues, there is scope for lot of problems. Global organizations are transferring people increasingly to other countries which create cultural diversity within work teams. Though teams are now an accepted form of planning, strategizing and operation, team based management techniques are still evolving world over and when you introduce the additional element of cultural diversity, it throws a whole new spanner in the works.
Potential Problems Areas in Cross Cultural Teams:
A) Communication, Language and Expression
The quality of communication is a key concern in cross cultural teams. Everybody could be speaking English, but certain forms of slang or colloquialisms may not be clearly understood leading to misinterpretations. Teamwork is a collective effort and all the players have to fully understand the direction that the discussion is taking. Misinterpretations can be kept to a minimum if everybody aims for clarity, otherwise team effectiveness is bound to suffer. To prevent problems associated with miscommunication, team members have to be encouraged check with each other for clarity either through paraphrasing or by asking questions. Paraphrasing basically involves restating a point and then asking – “Is that what you meant?”
Communication problems are particularly significant in cross cultural ‘virtual’ teams. Here are an example of two kinds of virtual teams:
- The international virtual team that typically interacts across continents and countries, to collaborate on a common task. This is almost always a cross cultural team.
- Virtual teams within the same country or city when a part of the team opts for telecommuting – they use email and other forms of telecommunication technologies to coordinate work.
Both types of teams will work on a project without regular face-to-face interaction, and therefore have to make their written email communication and telephone conversations as clear as possible. They also have to develop a work ethic of prompt response to queries, if this is not forthcoming it can be a little unnerving and there is no chance of you dropping by the office of your team colleague to discuss the issue.
In the international virtual team with its cross cultural mix of people, it should be expected that some amount of ambiguity is bound to creep in. Care has to be taken with wordings especially when there is disagreement on an issue. Even mildly sarcastic comments meant as a joke can be misinterpreted by a team member in another country and cause a conflict.
Information gaps are another problem area for the virtual cross cultural team. Everybody has to be on the same wave length as far as information and data goes. These teams can greatly benefit from ‘Groupware’ software, a relatively recent concept in networking using multi-user technology. This kind of software allows access to a shared database, provides email services, allows sharing of work files, allows online chats, scheduling, and tracking of joint projects. Companies are paying a lot of attention to the use of the right technology to make communication and collaboration among virtual teams effective. For instance, at ‘Cisco‘ their collaboration technologies are enabling their teams to share resources, information, and talent regardless of time or location. A case study at http://www.microsoft.com/technet/itsolutions/msit/infowork/spspttcs.mspxportrays how Microsoft developed tools for their virtual teams in order to address collaboration requirements across disparate locations and cultures
The other issue with international virtual teams is decision making. Decision making is a team activity and given the time zone differences, the team has to find a mutually agreeable time band for direct communication through conference calls or video conferencing. If there is a great deal of divergence and disagreement on the right course of action to be adopted, then a stalemate may be reached. The team may need to follow up with lots of explanatory emails and calls before they reach a consensus.
B) Work Style
Work styles and approaches may also vary when a team has a cross-cultural mix of individuals. Some work cultures foster individual thinking and offer rewards for individual contributions– like the American’s for instance. In some work cultures people are uncomfortable with independence on the job and prefer to be tied to the apron strings of the boss in decision making! When your team has a mix of styles, the individualistic team members may prove to be aggressive team players while the not-so-individualistic ones may merge into the team and outwardly seem to contribute very little to the team process. It is important to draw out and get the best out of all the team members despite the differences in personality types.
C) Dominating Influences
There are concerns that a section of the team that has a certain cultural similarity or homogeneity may attempt to dominate the team process and overrule the rest of the team. The dominant group within the team may try to swing decisions towards a direction that they are comfortable with. This can create a frustrating environment for the rest of the team.
D) Motivators and Expectations From the Job
Motivators are basically the factors that indicate the things that make a person tick in a business and team environment. Team leaders who handle cross-cultural teams usually find that the factors that motivate each team member vary. The motivators for working professionals can range from tangible rewards such as monetary increments, incentives and career progression, to intangibles such as job satisfaction, praise and encouragement or recognition from top management. It is essential to make the effort to gauge individual motivators in order to encourage and motivate each team member to excel at their roles. In the absence of the right stimulus, the individuals may lack the enthusiasm and drive necessary to perform their role within the team
1.5 Ethical issues encountered by managers
Ethical Responsibility
The question of ethics in business has been formalized in the discipline of corporate social responsibility, or CSR. This field examines ways that large corporations are responsible to their communities and to the environment in ways that don’t fall within the dictates of a free-market profit system. The growing prevalence of CSR within the corporate environment has heightened many managers’ awareness of ethical issues and of their responsibility to be conversant with them and able to make proper decisions. Managers need to be confident about their decisions, because they will inevitably be at odds with someone else’s preferences much of the time.
Discrimination
Questions of discrimination are common in the workplace, and managers are often called upon to deal with them. Historical discrimination on the basis of race, ethnic origin, gender or sexual orientation has made many individuals sensitive to these problems. Accusations or lawsuits charging discrimination are serious. They may be brought against a company as a whole or a manager as an individual. Good managers make proactive efforts to educate themselves about discrimination and make every effort to avoid discriminating against others, basing their hiring and promotion decisions solely on experience, ability and other relevant factors.
1.6 How to address the ethical issues
Cross cultural teamwork is going to increase as businesses expand on a more global scale meaning that people from diverse backgrounds interact on a regular basis as a team. Many large corporations have clients with whom they work across multiple countries and these clients look for integrated global solutions. In such a scenario the cross cultural team has a definite advantage in being able to understand the needs of their clients better.
The key to making the multi-cultural team work well is focusing on the objectives of the team. The objective is the main output that a cross cultural team can potentially deliver. Team output is usually better when there is diversity of experience among the team players. This applies to any team output, whether or not multi-cultural. The chances of drawing out innovative thinking get amplified when there is diversity. This is the factor that works in favor of cross cultural teams. The general consensus among experts is that the multi-cultural experiences that individual team members bring to the discussion tends to lead to superior creative solutions.
The problems and conflicts are certainly going to be there just as one would have conflicts and problems within teams who belong to the same market. Pre-emptive measures in areas like communication, information sharing, motivation drivers, and group dynamics are called for to assist in the cross cultural team process. The goal should be to try and build on the strengths of such cross cultural teams, minimize conflicts, and diffuse the occasional miscommunication that diversity creates
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