When You Shouldnt Go Global

Running head: VETTING GLOBALIZATION STRATEGIES When You Shouldn’t Go Global; Vetting Globalization Strategies Table of Contents Executive Summary †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 3 Case Overview †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 4 SWOT†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Situation Analysis†¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 7 STAB Principles †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 8 Christian Values †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚ ¬ ¦Ã¢â‚¬ ¦. 13 Recommendations †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 5 References †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 17 Executive Summary It has been argued that companies who have experienced some level of failure when trying their hand at cross-border ventures have simply attempted the leap under misguided information. It is argued that such failures are in direct result of inadequately vetting their globalization strategies. We offer an in depth discussion surrounding the globalization issue and the necessary strategies, followed by recommendations we believe could help reduce the prevalence of globalization failures. We open our discussion with a 2008 case study urging the company considering globalization to ask themselves a series of revealing questions. Providing real life examples, we go on to highlight several underlying pressures and challenges often associated with the process of globalization. An analysis of the strengths, weaknesses, opportunities and threats, often associated with a firm who is not prepared for globalization, is performed. The often intimidating global climate and several mixed assumptions surrounding globalization are discussed across a multitude of service industries. We continue by presenting three of Sun Tzu’s principles, as cited in The Art of Business, as we argue ways in which they are instrumental to any successful globalization venture, providing examples of firms who have historically and successfully applied the three principles. Several Christian values and how they are intertwined within the structural framework of a successfully globalized firm mentioned, noting the importance of a functional mission statement and several key characteristics to be explored before attempting the cross-border venture; ensuring global readiness. Finally, we offer several recommendations that we conclude are vital in addressing globalization preparedness, suggesting that with additional research, insight, and after fully vetting the related risks and rewards, the frequency of globalization failures would be significantly reduced. Case Overview Marcus Alexander and Harry Korine (2008), argue that many companies do not take the time to ensure that their globalization strategies were not â€Å"deeply misguided. † Believing that many of these failures could be avoided, Alexander and Korine (2008) recommend the company pondering globalization ask themselves three questions: 1. Are there potential benefits for our company? 2. Do we have the necessary management skills? and 3. Will the costs outweigh the benefits? Among the arguments made by Alexander and Korine is that which encompasses the pressures surrounding the globalization process. Alexander and Korine (2008), argue that companies going global in relation to various marketplace pressures are making serious mistakes, subsequently forced to undo their international investments, often involving the firing of senior management teams. Alexander and Korine (2002), offer up examples of failed strategies such as Dutch financial-services firm ABN Amro, Daimler-Chrysler, and AES – a U. S. based energy firm that despite operating in 29 countries on five continents, struggle to bring added value. The authors relate the struggles of deregulated industries to a â€Å"glocal† problem. That is to say that many â€Å"customer expectations, operating environments, and management practices of a globally standard service can vary greatly depending on location,† in example, citing the standardization of electricity flowing over power grids (Alexander & Korine, 2008, p. 107-109). Every industry has its own challenges with globalization. Issues within the service industry, such as Starbucks, for example, have been that profit margins are equivalent to about half of that which can be expected domestically. In the IT industry the protection of intellectual property rights has caused many companies to simply leave countries like India, while the failed integration of Daimler-Benz and Chrysler is a perfect example of a failed globalization strategy in the manufacturing industry (Alexander & Korine, 2008). In discussing some of the strategies that did work, such as GE, and Renault’s alliance with Nissan, Alexander and Korine caution against focusing on these success stories. Stating that that while many companies are planning rapid expansion, they are underestimating the management challenges. Their final point is that the landscape of players is very different than that of the global landscape of 30 years ago. Today’s successful global behemoths, according to Alexander and Korine (2008), are more diversified â€Å"both in type and international footprint. † Meaning, such companies possess a greater diversity in the types of subsidiaries they own and operating in more countries than ever before. SWOT Analysis – When you Shouldn’t Go Global Strengths Reduced financial, political, currency, and exchange risk- Foreign investment involves all of these risks. By refraining from foreign investment we avoid these risks. Simplicity of operations- Setting up and maintaining foreign investments complicate operations. Refraining from going global keeps operations more simple. Protection of intellectual property- It is very difficult to protect intellectual property in foreign countries. By keeping all activities domestic, one is adding a layer of protection to intellectual property rights. Weaknesses Loss of economies-of-scale and economies-of-scope- This according to Alexander and Korine is what is not being fully realized by going global, and therefore may not be that significant of an issue in many industries. Loss of first-mover advantages- Choosing not to go global may mean making the irrevocable choice to give up the first-mover advantage. This is usually a very small window and a one-time opportunity. Foregoing additional revenue sources- For a company that has no additional potential revenue sources domestically, going global may be the only opportunity to gather additional revenue. Foregoing market growth- For companies wishing to expand market reach, the choice to forego going global will limit their market penetration. Opportunities No financial investment- Refraining from foreign financial investment frees-up those funds for investment in domestic activities. No use of other resources- Refraining from going global frees-up all resources (human, etc. ) for use in domestic activities. Threats Loss of market share to competition- Should one’s competition be successful in going global, they may be able to offer similar products at much lower prices thus forcing you out of the market. The competition may also offer superior products at higher prices, and capture the market, via the use of superior technology. Loss of talent to competition- In many fields, such as high tech and engineering, the worldwide competition for talent is fierce. Failure to go global often means failure to secure talent. Loss of learning opportunities- Since globalization can take the form of joint ventures. There is also the threat of the loss of learning from a joint venture partner that should be considered. Situation Analysis Since the seventh century business have possessed the desire to operate internationally however, those considered truly global, did not start appearing until the past century. With growing stories of globalization successes, follow just as many testaments to failures. Despite the growing number of failed attempts the overwhelming pressure to conduct the ultimate border-less business has become increasingly enticing. Most large companies founded 20 years ago feel battered by numerous external forces pushing them towards globalization. Driving forces such as the removal of political and regulatory barriers to global trading and investment and the ability to conduct business 24 hours a day from anywhere in the world, draw these business behemoths one step closer to customers in emerging economies (Alexander &Korine, p. 106). Deanna Julius (1997), lists in her article titled Globalization and Stakeholder Conflicts; a corporate perspective), three primary, macro-level forces, driving the need for change as; how companies are organized, how goods and services are produced and how they are bought by and delivered to customers. Alexander & Korine (2008), mention that while many of the companies that have rushed to globalization have benefited, or at the very least have not suffered irreparable damage, some are witnessing major fallout from the move. The authors suggest that while companies often fail from misguided global strategies and an unanticipated level of execution, they could have avoided such failure by seriously addressing if potential benefits even exist in going global, if their management possess the necessary skills and the most logical one, will the costs of going global outweigh the benefits? Alexander & Korine (2008), argue that most companies fail to ask themselves these questions due to previously held false assumptions regarding the virtues of globalization and seduction from the stock market. As previously mentioned, deregulated industries such as those who provide water, power, and mail service are among those experiencing global failure. Alexander & Korine (2008), suggest that deregulated industries are operating under the misguided assumptions as well. The greatest assumption being that, going global will save them money, given they will be sharing resources across their international operations. When in reality, the costs to enter the foreign markets end up outweighing the assumed benefits (Alexander & Korine, 2008, p. 107). Managerial fads are suggested to undermine rational behavior from within a company, thus resulting in sloppy thinking that distracts management from more imperative tasks associated with global success. Properly servicing global customers from a national perspective contributes too many failures given, much attention must be afforded to a mix or global and local factors simultaneously. Global manufacturing companies are said to fail due in part to the complexities related to the integration tactics necessary grow and compete better, resulting in costly delays and thus failures (Alexander & Korine, 2008, p. 110). STAB Principles Win All without Fighting – Capturing Your Market without Destroying It The goal of business is to survive and prosper over a long period of time. Sun Tzu, author of The Art of War, described the strategy in achieving this long term prosperity as an offensive one in which a company must take all under Heaven intact, â€Å"Thus your troops are not worn out and your gains will be complete (McNeilly, 1996, p. 11). McNeilly (1996), utilizing Sun Tzu’s principles in his book The Art of Business, adds that, by taking all under heaven intact you will capture your marketplace thus ensuring your company’s survival and prosperity. However, your desired markets must be defined as such and nothing less than commitment in achieving market dominance must be displayed (McNeilly, 1996, p. 1). Application of Sun Tzu’s principle, win all without fighting – capturing your market without destroying it, as cited in McNeilly (1996), has been useful to many of today’s leading companies, including global cement producer, CEMEX. Cemex’s CEO Lorenzo Zambrano has applied Sun Tzu’s technique when expanding his cement company in Mexico and abroad. By the year 2000, CEMEX had become the world’s third largest cement company. In Cemex’s quest for market dominance they switched to a strategy of growth through acquisitions. In the late 1980’s large firms were considering expanding their operations into Cemex’s Mexican territory. Realizing the imminent threat CEMEX decided to unify its Mexican operations by acquiring two of Mexico’s large cement producers, affording CEMEX access to Mexico’s central market and bolstering its exporting capabilities, making CEMEX Mexico’s largest cement producer and a threat not to be competed against. While CEMEX won all without fighting, they gained market dominance in Mexico, later fueling their geographic expansion (Ghemawat, 200, p. 155). Deception and Foreknowledge – Maximizing the Power of Market Information Foreknowledge, as described in Sun Tzu’s third strategic principle, is not projecting what will happen in the future, based on past occurrences or merely conducting a trend analysis. Foreknowledge and maximizing the power of market information is to; gain firsthand knowledge of your competitions strengths and weaknesses, know their capabilities, culture and mindset, and obtain a deeper understanding of who their decision makers are and what their future goals and plans are (McNeilly, 1996, p. 0). As Sun Tzu stated in The Art of War, as cited in McNeilly (1996), regarding foreknowledge â€Å"What is called foreknowledge cannot be elicited from spirits, nor from Gods, nor by analogy with past events, nor from calculations. It must be obtained from men who know the enemy situation. † In order for a company to succeed on a global scale not only do the ins and outs of their competition need to be understood and plotted against, they must also know themselves; their own weaknesses, strengths, people and plans as well as the market in which they will be entering. A corporation lacking this level of foreknowledge should reconsider entering global markets until they better know themselves and their competition. Before Wal-Mart swept our nation, Sam Walton gathered vast amounts of information on his competitors, large and small, before he ever brought competition to their territory. In fact, before Wal-Mart took on then behemoth value retailer Kmart, it was the smaller, local mom and pop retailers that were seized up. Walton learned about the smaller retailers value chains and distribution methods, through foreknowledge, he attacked their weakest points, where they could not afford to compete, in costs and deceptfully defeated them where they did not expect it; in their own small, rural towns. Defeating the smaller retailers gained Wal-Mart the necessary market share to then surround urban Kmart. Wal-Mart, knowing that Kmart’s operating costs was on average 5% higher than theirs attacked Kmart at its cost structure, and won. Kmart was just not able to get under Wal-Mart’s five point advantage in operating costs (McNeilly, 1996 p. 25). In 2009, after waiting for a new government with a more ‘hopeful’ political environment and a well paired partnership with local market-savvy grocery retailer, Bharti, Wal-Mart utilizes foreknowledge and deception to enter India’s market. Historically however, Wal-Mart has been unsuccessful in several global markets such as Japan due to their inability to adapt to local markets and tastes (Consumer Goods, 2009). As McNeilly (1996), notes in summary, you must learn everything you can about your competition, not merely the facts, but you must also learn about its culture, market, mindset and capabilities. Possibly additional foreknowledge in these areas could be of great use to Wal-Mart. Character Based Leadership – Providing Effective Leadership in Turbulent Times Character based leadership is not only desirable but it is an attribute than often separates the globally successful firms from the rest. When a company first tries its business hand and people skills at cross-border trading, most of the times are turbulent ones and without effective and transparent leadership, going global can quickly escalate from intimidating to downright terrifying. When we think of character based leaders, often people like Chrysler’s Lee Iacocca, Steve Jobs (Apple), The Snyder family (In-N-Out burger), Dan Cathy (Chick-Fil-A), Eric Schmidt (Google) and Jim Skinner of McDonalds come to mind, but McNeilly (1996) reminds us that not only are leaders of this caliber unique, they can also be hard to find. It is of no coincidence than that we can more readily recall companies operating under less than character based leadership, faster than those with it. Companies like Nike, BP, Exxon (Valdez Oil spill) and even Carl’s Jr’s current CEO Andy Puzder, come to mind. Sun Tzu stated in The Art of War, as cited within McNeilly (1996), â€Å"The general who in advancing does not seek personal fame, and in withdrawing is not concerned with avoiding punishment, but whose only purpose is to protect the people and promote the best interests of his sovereign, is the precious jewel of the state†¦few such to be had. McNeilly (1996) suggests that leaders of this caliber are desirable given they put the needs of others before theirs, they have strong and well developed characters. Becoming such a leader is not easy and will require much sacrifice to: â€Å"Build your character, not just your image; lead with actions, not just words; Share employee’s trials, not just triumph s, motivate emotionally, not just materially, assign clearly defined missions to all, avoiding mission overlap and confusion and the make your strategy drive your organization; not the reverse† (McNeilly, 1996, p. 119). Jim Skinner, CEO for McDonalds and winner of the 2009 CEO of the Year award is greatly admired and willingly followed by his employees around the world and thus a great example of a character based leader attributing to McDonald’s global successes. Skinner, who began his career with McDonald's in 1971 as a grill cook was named CEO in 2004, at a tumultuous time for the company. Skinner acted quickly to turn the company around and in result between 2004 and 2008 McDonald’s revenues climbed 41. 1 percent in four years, and net income jumped by 81 . 3 percent (Top Executive, 2009). The top nominees for CEO of the year are judged by such criteria as; leadership, integrity, ability to outperform and for their commitment to employees. It was no surprise to those who knew and worked with Jim Skinner that he had excelled in every category. After receiving the award, Skinner acknowledged the support his leadership team, along with the entire McDonald's system, stating â€Å"Together, our franchisees, employees and suppliers make up what we call our three-legged stool, we succeed only when all three legs of that stool are strong, aligned and performing at the highest levels† (Top executive, 2009). In closing, Skinner noted that while the challenges of leadership have grown more complex in the multifaceted business climate, holding fast to fundamental principals will serve today's global business leader well (Top Executive, 2009). The character based leader of today’s successful global firm provides effective leadership in turbulent times, Sun Tzu refers to this as ‘moral influence’ stating in The Art of War, as cited within McNeilly (1996), â€Å"By moral influence I mean that which causes people to be in harmony with their leaders, so that they will accompany them in life and unto death without fear of mortal peril. Skinner possesses moral influence among his employees, an important principle that will undoubtedly advance McDonalds in global markets around the world. Christian Values At the minimum, companies poised for global success, will adopt a mission statement. Ideally, these companies will have a statement of values. One organization that is not on ly global, but transnational – World Vision International has a statement of values that serves as moral compass in decision making and strategic planning. It states that WVI’s values are to â€Å"Bring a Christian, community-based, child-focused HIV and AIDS response, reflecting God’s unconditional love for all people and the affirmation of each individual’s dignity and worth† (World Vision International, 2009, p. 2). It is these types of clear statements of vision that removes the guess work from the Christian Business Praxis model. Additionally, companies need to look at the characteristics of their organization and the values their leadership possesses to determine whether or not the decision to global is in the best interest of the organization. Some examples are: Benevolence- For many organizations benevolence is the primary reason for going global. This was certainly the case of bicycle manufactures and APU alumni ACIRFA, who after going on mission to Africa saw a need for transportation and found a way to meet that need. Stewardship- Stakeholder theory, which seems to dominate most modern business decision making, indicates that it is unethical to go global without first considering the impact on all of your stakeholders. Clearly, one’s shareholders are his or her primary stakeholders. However, one must be mindful of the fact the fact that the organization is also the steward of its employees. And, to that end the organization has a duty to plan responsibly and minimize risk to those employees. As such, it is important for organizations to ensure that they are balancing potential profitability with the potential of not serving some of those under their care. Collaboration- This is a particularly useful skill if an organization is considering joint ventures. If, however, the organization has found that that the leadership of the organization or the organization as a whole is particularly weak in this area this is an indicator that a joint venture is not ideal. Integrity- The challenge associated with integrity (assuming that your organization possesses a great deal of integrity) is that one doesn’t know the off-shore partners and vendors one’s organization will be dealing with. New relationships will need to be established, and with that trust will need to be cultivated. Management skill- For every ounce of management skill it takes to manage domestically it takes a pound to manage off-shore. This is because there is an entirely new set of challenges and risks. There are language barriers in many cases. There are currency fluctuations, political risks, supply chain issues, and a whole host of challenges that one may not have realized existed even with extensive due diligence. Passion- The type of passion we are addressing here is the type associated with buy-in. If all members of the executive management team have not bought-in to the idea of going global it is going to be very difficult to have a great deal of success. Leadership must be passionate about going global. They must be excited, and they must be convinced that this is the future of the organization for global efforts to be successful. Preparation- Preparation is the key to success in going global. It may be fine to start out by simply exporting a few items. However, as demand increases, organizations will find that the need for strategic planning and preparation will also increase. Should a company wish to enter into either a joint venture, licensing agreement or build facilities off-shore, extensive due diligence involving outside consultants will be necessary. Zest- As we have suggested, going global is not for the faint-at-heart. Leaders have to be willing to take risks, and moreover leadership should invigorate others. Going global is not an easy task, great planning and preparation are integral. There will be many challenges and many hurdles and in many cases there will be more reasons to quit than stay the course. Therefore, zest is a prerequisite for going global. Recommendations Before making the decision to go global, heed Alexander and Korine’s advice, and ask three questions of your organization: 1. Are there potential benefits for our company? 2. Do we have the necessary management skills? and 3. Will the costs outweigh the benefits? The answers to those three questions will give the organization a starting point from which to determine if going global is in the best interest of the organization as a whole. Next, ask the operational questions- Is going global necessary for the growth and/or survival of our organization? Is globalization worth the various risks involved? Can effectively and protect our intellectual property in a cost efficient manner? Will the complications surrounding operations be overwhelming? What do we stand to lose if we don’t go global and if we don’t who within our competition will? What possible ramifications exist at the expense of not going global? Are we losing out on a learning opportunity by not going global? Is there unsecured talent out there that we may miss out on by not going global? Then ask the company, how much the above is worth in terms of opportunity cost? If we don’t utilize our time and resources in going global, how then will we allocate said resources to growth? Then ask your company the values questions- Is going global a responsible and ethical management decision? Can we trust that we will find people of integrity in the global economy to do business with and if so, do we possess the necessary passion and zest to be successful at such as risky cross-border venture? In addition, have we well prepared, and will we continue to be, throughout every step of the process? After asking the above questions we recommend conducting a detailed SWAT analysis where all possible risks and rewards involved with going global are fully vetted, then establish that all Christian perspectives are clear and present and finally, if the decision to go global is made, go forward while applying Sun Tzu’s Art of Business principles. In conclusion, Alexander and Korine (2008), suggest that we should not expect the influx of globalization failures to stop or improve any time soon. Making the valid point that, companies in a variety of industries will continue on in their reckless pursuit of global strategies, activists will continue to cause change and disruption and less than character based leaders will stand behind flawed globalization strategies, all the while, customers will always be demanding select attention. While it is undeniable that globalization is a seductively daunting opportunity with promises of increased power and unlimited benefits looming about the mere thought and that while even the best and brightest leaders, heading up the most well prepared companies may eventually succumb to its pressures, make the cross-border transition and possibly fail at it, keep in mind- sometimes to fail is necessary to succeed. References Alexander, M ; Korine, H. (2008). When You Shouldn’t Go Global. In Bartlett, C. A. ; Beamish, P. W. Transnational Management- Text, cases, and readings in cross-border management. 6thed. p. 105-112). New York: McGraw-Hill Irwin. Consumer goods: Wal-Mart cashes in. (2009). Business India Intelligence, 16(12), 3-4. Retrieved from http://search. proquest. com Fraser, R. (2006). Marketplace Christianity: Discovering the kingdom purposes of the marketplace. 2nd ed. Kansas City: MO: New Grid Publishing. Ghemawat, P. (2000). The Globalization of CEMEX. In Bartle tt, C. A. ; Beamish, P. W. Transnational Management-Texts, cases and readings in cross-border management, 6thed. (p. 146-166). New York: McGraw-Hill Irwin. Julius, D. (1997). Globalization and Stakeholder Conflicts: A corporate perspective. International Affairs (Royal Institute of International Affairs 1944-). Globalization and International Relations (Vol. 73, No. 3, p. 453-468). McNeilly, M. (1996). Sun Tzu and the art of business: Six strategic principles for managers. New York: Oxford University Press. World Vision International. (2009). Global hope initiative annual report 2009. Retrieved from http://wvi. org/wvi/wviweb. nsf/0CF6565756AEA942882575590061CEAC/$file/ Hope_Annual_Report_Exec_Summary_2009. pdf 2009 chief executive of the year. (2009). Chief Executive, (242), 68-70. Retrieved from http://search. proquest. com/docview/212098908? accountid=8459

EBay Stock Option Plans Essay Example | Topics and Well Written Essays - 750 words

EBay Stock Option Plans - Essay Example When the figures are compared between the two methods, the figure that denotes eBay’s unprofitable operations can be turned to a profitable one with the choice of the accounting method. Thus, ethical considerations which should be based on accurate reporting of its performance to its investors, are of little importance to eBay in choosing the method for reporting its options. Certain financial considerations seem to play part in the choice of eBay’s financial reporting for stock options. As the choice will impact a handful of items in the financial statements of the company, financial considerations seem to be very relevant as for eBay’s choice of intrinsic value over fair market value (Bradshaw 2004, 3). According to an article from Darden Business Publishing, University of Virginia, the main advantage of choosing intrinsic value over fair market value is that firms will not record compensation expense when the market price is equal to the exercise price (2004, 12). This gives a firm a significant financial advantage as it reduces the effect of compensation expenses to the company’s operating expenses, which then affects the company’s net income. When a company like eBay can choose to report its stock options based on the intrinsic value method, it is required to put footnotes in order to show the figures if fair market value method is used for financial reporting. However, because this is just a footnote and does not require recognition in the financial statements of the company, the choice has some strong relevance to the financial considerations that are associated with it. According to the article from the University of Virginia, the shift from intrinsic value to fair market value method of reporting stock options will impact eBay’s financial statements by recognizing a deferred tax asset for the estimated future benefit, which will

Nike Case Study Example | Topics and Well Written Essays - 1000 words

Nike - Case Study Example Maintaining a level of high innovation, operational efficiency, and driving the creative and wild spirit of the brand culture will continue to be the differentiating factor between Nike and their closest competitors in the marketplace. The major competitors for Nike are: Adidas/Reebok- Both are very established brands domestically and especially internationally with a loyal customer base. For Adidas their key demographics are especially the 35 and older crowd. Their grass roots presence and their history of amateur sports sponsorship especially in soccer has allowed the company to maintain its position as the number two performance apparel and footwear company of Europe. Reebok with their strong market presence, strong endorsement, and fashion focus has captured a significant portion of the market share. 1) Nike has grown from its humble beginnings back in 1962 when Phil Knight started Blue Ribbon Sports the precursor to Nike to become the world’s largest athletic footwear and apparel company. Nike as a brand became known for its edginess, innovation and cutting edge technology. The brand's focus on performance and true innovation has built a high level of consumer acceptance and brand equity from serious athletes and amateurs and as a direct consequence the general public alike. Through savvy marketing campaigns, key sponsorships of professional athletes, sport leagues, teams, and its tradition for continuous technological and operational improvements the company has maintained its leadership position in the industry both domestically and internationally. By shifting its focus towards the consumer and not just the product Nike succeeded in capturing and maintaining the largest market share in the industry. 2) Despite incredible success in the domestic market by the 1980's Nike passed Adidas as the number one domestic athletic shoe company. Nike faced a lot of difficulty getting a foothold in the European market with formidable competitors like Adidas an d Puma controlling over 75% of the athletic shoe and apparel market. By adapting its marketing campaign to suit its target audience and through savvy marketing and grassroots efforts Nike has developed its brand equity to become the market leader in the world. By becoming the world's largest athletic shoe and apparel company in the world Nike has had to face a lot of criticism for their unfair labor practices in their Asian manufacturing facilities. 3) Sponsorship deals with athletes like Michael Jordan and Tiger Woods were crucial to development of Nike's brand image as a whole. One of the key elements that helped Nike develop its brand equity domestically and internationally was through a marketing strategy where individual markets saw ads that featured local heroes and athletes and through direct financial support of local sport leagues and teams in the markets they served. Becoming an official sponsor for world renowned international sport events such as the Olympics places the brand in a unique position to increase the brand's goodwill, consumer confidence, and increases loyalty to the brand as a whole. 4) By becoming the number one athletic footwear and apparel company Nike is open to a diversity of operational factors and exposure that need to be constantly monitored. Nike's corporate image was negatively affected when allegations of unsafe work

What is Relativism History of Relativism Essay Example | Topics and Well Written Essays - 3250 words

What is Relativism History of Relativism - Essay Example Relativism therefore essentially argues that different point of views which are argued against and in favor of are equally valid and the difference only arises due to different perceptions and considerations of individuals. Relativism however, comprises of a body of knowledge and different point of views with common theme that some central aspects of our existence are actually relative to some other things. Issues such as moral principles, justifications are considered as relative to other variables such as the language, culture as well as biological make-up. It also suggests that our own cognitive biases towards certain issues actually restrict our ability to view things objectively therefore this bias can be contained towards wherever we use our senses. As such, relativitism suggests that our existence is actually situated into our cultural and linguistic contexts therefore our perceptions about truth can be relative.( Wisman, 1990) Universalism, however, deals with one universal truth and has religious and theological foundations also. Different religions including Christianity and Islam endorse the concept of one universal truth and reality. Universalism therefore can be used to identify the particular doctrines concerning the formation of all people. This paper will focus upon describing and exploring relativitism in details while also arguing whether it is defensible and can be reconciled with universalism or not. History of Relativism It is suggested that there are no significant philosophers who ever can be considered as relativists. However, the history of relativism dates back to Greek era when Protagoras of Abdera believes to have put forward a simple version of relativism in his treatise Truth. Protagoras outlined that all human beings are measure of all things and to things they belong and to things they don’t belong they don’t. Apparently, Protagoras was of the view that human beings are creatures which can be associated with certain things and a person is a measure of how he associates with those things. Protagoras went on to say that to me a wind may seem cold or hot but to you it may be different.( Rorty,1991) It is critical to understand that Greek were aware of the cultural differences since 50 Century BCE and onwards. Herodotus even went on to discuss the cultural differences and biases people of India and Persia held and suggested that if you were to ask them what are the best laws, they would probably mention their own laws as the best. Similar, references are also made in other literature wherein it was critically outlined that no behavior can be shameful if it is not to the person who is practicing it. Further, arguments were also presented regarding different conceptions of God.( Lutz,1991) Protagoras was considered as the first official voice in relativism though very little is known about him. Most of his teachings are presented as reference in the works of Plato. Plato interpreted his most of the work wherein he argued that each thing appear to me so it as to me and each thing appear to you so it is to you. Protagoras also discussed about the truth and how it appears to others. It has been argued that during recent times, four important schools of thoughts emerged in rel ativism which have actually challenged the traditional view about It is suggested that relativistic motives appear almost everywhere in philosophy and that the relativists have been able to keep many thinkers captive of their ideas despite the fact that relativistic arguments often lead to implausible conclusions. Much of 20th century thought on the relativism has been focused upon presenting the issue more coherently rather than further refining its fundamental principles. The initial focus was on the diversity of the

Reader Response Analysis Essay Example | Topics and Well Written Essays - 750 words

Reader Response Analysis - Essay Example might sometimes misunderstand the author because the author concludes that even though one may take as much precaution as possible, it is impossible be alive in the end. Thus, the story though actually begins on a wary and precautionary note; it reinforces a bigger truth that everyone has eventually to die at the end of life. The basic premise of the story is related to the modern world, where murder as a crime is on the increase on even in a day-to day basis, but the culture of UAE is different from this situation because it promotes harmony and well-being among all citizens. In my opinion, this story is full of contradiction. It is a bit strange for me because I never saw a narrative that had contradiction ideas in the same story. However, from the authors viewpoint, the girls should be careful with themselves to reduce their murder rate. The author gives the girls advice on ways they can reduce the murder rate. In the Beginning, there is no safe place in this world. That is according to what the writers said "install alarm systems on every window, every doorway in your house. Better, do not live in a house. Go co-op" (Monson 205). I think that this statement is unclear because if we tried to put alarms on the windows and doors that will inform the victim of any potential threat, but it is the wrong attitude having a notion that everybody is threatened. Further, the author suggests that to protect oneself, one must not stay in one place for a long time. This is absurd because just in the previous statement, he asked the protagonist to install alarms, not even stay in one place for a long time that is impossible for a girl of seventeen years. In addition, it is unclear what is the essence of installing alarm systems on the doors and windows if she is not going to live in one single place for a long time. My response that is provided here is based on the social framework and in relation to th e present society in which we live that promotes amiability, friendship,

Automotive Production Levels - Toyota Motors Research Paper

Automotive Production Levels - Toyota Motors - Research Paper Example In the first quarter of financial year 2013, Toyota’s unit sales had jumped to 2,268,563 units amounting to sales revenue of 5,233,688 million yen. Consolidated sales increased by 85.7% in fiscal year 2013 compared to fiscal year 2012 and net revenues increased by 59.9%. These changes are indicative of a change in either Toyota’s price structure or the demand and supply forces in the market. Among other things, these changes can also be attributed to changes in the value of the yen and cost reduction measures taken by Toyota to stay afloat and efficient. Market price also plays a role here and can be calculated using a simple relationship between sales revenue and units sold. (Market price = Sales Revenue/Units Sold. According to the data presented, the price for Toyota’s products in the market in fiscal year 2012 based on the unit sales and sales revenue figures for that year can be calculated to be 2.59 million yen. For fiscal year 2013, this amounted to 2.31 m illion yen. The demand curve for a firm shows how much of a product the market is willing and able to pay for at the given price. The supply curve of a firm shows how much of a product the firm is willing and able to produce at the given. ... product is increased, demand tends to decrease and when the product price is decreased, demand tends to increase, hence establishing an inverse relationship between demand and price levels. Similarly, it can be seen from this analysis, that the aggregate market price for Toyota’s products was decreased in fiscal year 2013 which resulted in an increase in sales which depicts an increase in the demand for Toyota in the market. In the same vein, when the supply of a product is increased, its price decreases and if the supply levels in the market are decreased, the product’s price in the market increases. The equilibrium point thus keeps shifting with changes in demand and supply due to different market factors. Also relevant is the concept of spatial equilibrium (Nagurney, 2002) which speaks about how supply and demand prices result in trade flows. The figure below illustrates the aggregate demand and supply schedule for FY 2012 and 2013. Price (million Yen) 2.59(2012) 2.3 1(2013) 1,221,374 2,268,563 Quantity (units) Demand FY 2012 Supply FY 2012 Demand FY 2013 Supply FY 2013 The world economy has been going through rough times and its basic structure has been forever changed since the financial crisis of 2007-2008. Market trends have also significantly changed since then even though the market has recently picked up for the better. Toyota’s performance, measured by its sales, production, revenue and cost figures etc declined steadily in the fiscal years 2011 and 2012, however it increased its performance dramatically in fiscal year 2013 and picked up fast pace to increase its sales, production and profit levels and overall revenue levels. It also managed to decrease its production cost and reduce market price to boost its demand in the market. These maneuvers paid

Group Organizational Ethics Essay Example | Topics and Well Written Essays - 500 words

Group Organizational Ethics - Essay Example In the interest of keeping a good customer happy and committed to us over the long haul, I determined that the correct business course of action would be to actually reduce the price for this customer, rather than try to increase it. This was also the ethically correct thing to do because we were ripping off this particular customer as evidenced by the fact that the other customers were paying far less. After some serious arm twisting, I was able to convince the company that there is greater potential long-term profit if we reduce this customer's price in order to shore up the business relationship. Fortunately, we were able to do this, and the customer now feels like they are treated fairly. I did not need to compromise my values or beliefs. Yes, I would have an obligation to stay connected, because I would be unlikely to suffer any harm. Under a deontological ethical approach, it is simply the right thing to do to sacrifice one's time in order to save the life of another person. If the facts were a little bit different, and there was some risk to my own life, or I would be putting the life of another person at risk due to my lack of availability, it would be a reason to reconsider.