March 21, 2011
The following paper will address many issues such as issues that are associated to expanding globally i.e. cultural barriers, diversity and what happens when these issues are ignored. In addition, there will be two examples of political conflicts and two examples of economic conflicts.
PPQ Parts is planning to expand globally over the next several years. To ensure that this is a smooth transition I have prepared this extensive report to aid in any issues that may arise and how to handle them. Throughout the following document you will find a plethora of useful information ranging from how cultural barriers and diversity can affect our company to a few political and economic issues that commonly arise. In addition, you will find a comprehensive analysis of what happens when these issues are ignored. Global expansion will increase PPQ Parts profits as well as give the company a competitive advantage over the competition. What are some of the issues the host foreign country could face as a result of the expansion? When it comes to global expansions the host country is responsible for providing a wide array of things ranging from skilled individuals to the availability of raw material as well as transportation and a valid market to sell the products being produced. By introducing an expansion into a new foreign country there are other issues that can arise such as the host countries ability to integrate the new company into the marketplace and grow as it does as well as the country’s rate of utilization and absorption. Secondly, the country’s infrastructure may also be affected when it integrates the new firm. In addition, when things such as machinery is hard to obtain, electricity is either non-existent or unreliable and technologies such as telephones and other communicational tools are unavailable the host country would have to integrate these tools before the firm would even be able to expand or the firm would have to find a new host country. To sum this up, the host country is responsible for providing an educated workforce, any technologies (i.e. access to electricity, water, and telephone and intranet services) that may be needed as well as the ability to absorb and integrate the new firm into the local economy. Explain what cultural barriers and diversity issues are commonly encountered by international/multinational (MNC) and global organizations. Each country is very different when it comes to culture and diversity. In short, culture is defined as “the behaviors and beliefs characteristic of a particular social, ethnic, or age group” (Dictionary.com, n.d) and diversity is defined as being different than one may be used to. Given these definitions the issues that can arise because of them is very wide. For example, there is the issue of religion, some countries try to be more “green” than others, there may be an issue involving language as it is very hard to communicate when two people cannot understand one another. In addition, other issues that may arise are customs and traditions. With all of these problems it would be very hard to avoid all of them but what can be done is to train managers to speak the native language, study the culture and beliefs and hire local individuals to work in the new plant to assist in a smooth transition by offering their general knowledge of local culture. Some people do not adjust well to change and don’t often like when someone tries to change what has worked for them for decades. The perfect example of this is the war on terrorism. The reason those countries are fighting so hard is because the great ol’ USA thinks that just because our type of government and the way we do things is going to work for everyone. They are simply fighting to keep things the way they have been forever. I don’t necessarily agree with the way they run their own countries or the war but who are we (USA)...