MS jUDTb HERE IS PART 1
I will be outlining the global adventure that PPQ auto parts will be taking to expand its business to Germany and Japan, the concerns that senior management should be concern about. There are cultural diversity and politics that faces PPQ and a few suggestions for the company managers.
PPQ Parts: Global Expansion Issues
PPQ Parts has determined that it will be expanding globally over the course of the next several years to Germany and Japan. In order for this to be a successful venture, there are many political and economic concerns that the senior management team should be aware of. The following is a report for the senior management team that outlines these issues, including those concerns facing the host country, cultural barriers and diversity issues faced by global organizations, and diversity in the international arena, why it has become so significant, and what happens when it is ignored. Finally, a few suggestions specifically for PPQ Parts' operations in Germany and Japan will be offered.
ISSUES FACING HOST COUNTRIES
The countries hosting PPQ Parts, Germany and Japan in this instance, will be facing many sensitive issues that will require dealing with. They will be host to a company that is accustomed to operating on a different social, political, economic, cultural, and legal system, and will need to make adjustments to work with it. They will need to provide a workforce that understands this and is competent to do the work required. They will have to deal with such issues as the fact that while the company is relying upon them as a new source of revenue, much of that profit is traveling back to the United States instead of remaining in that host country.
One of the biggest issues a host country faces as a result of global expansion, perhaps, is the simple cultural gap. Some sources indicate a European and Asian resistance to United States expansion, citing such reasons as American refusal to learn languages other than English, informality in addressing European business partners by first name, and a general ignorance concerning European culture and geography. This leads many foreigners to hold American businessmen in contempt.
This is certainly true, and PPQ Parts' executives should make every effort to study the cultural traditions, geography, and business customs of both Germany and Japan before the global expansion takes place. Although many will argue that American success in business speaks for itself, and it is unnecessary to make changes, small concessions and sensitivity to cultural differences cannot help but pave the way for good relationships for years to come (Firoz, 2002).
CULTURAL AND DIVERSITY ISSUES ENCOUNTERED BY GLOBAL ORGANIZATIONS
There are many cultural barriers and diversity issues commonly encountered by international, multinational, and global organizations, and PPQ Parts is no exception. One such issue that PPQ may face is cultural adaptability. PPQ may have to work at adapting to the particular culture it finds itself in. In the case of the Big Boy franchise in Thailand, cultural adaptability almost marked the end of the presence of the restaurant even as it began. The franchise owner did not take into account such things as the lack of the food's appeal to the Thai people, the negative energy of the restaurant décor, and the fact that the Big Boy statue was somewhat frightening to the Thai people (Firoz, 2002). These were all cultural adaptations that, once changed, made the restaurant more appealing to the country.
Another issue that PPQ Parts is likely to face is communication. A basic skill that all global executives should possess is the ability to communicate across cultural lines. PPQ executives will need to share the company's values, ideologies, goals, objectives, and methodologies with individuals who at the very least do not speak the same language. More than this, they do not share the same attitudes, thought patterns, or societal roles (Firoz, 2002).
Another area of concern for PPQ in this expansion is ethics. There are laws in the United States against such practices as bribes, kick-backs, and other corrupt business practices, but in many other countries, these activities are perfectly acceptable (Firoz, 2002). "One could say that what we consider unlawful is merely part of another country's culture" (Firoz, 2002). PPQ must maintain its own ethical practices regardless of external values.
DIVERSITY IN THE INTERNATIONAL ARENA
"For most companies, global diversity is a business imperative...borders basically don't exist anymore" (Iwata, 2007). As with many other U.S. businesses, PPQ Parts has seen the importance of diversity in the international arena. Global economic power is steadily shifting abroad, and if American companies want to take advantage of it, they must look to emergent nations in which to establish business. "More capital, labor, and business ideas are flowing around the world than ever before," states Chief Diversity Officer at Weyerhaeuser (Iwata, 2007).
Just as with domestic ground, diversity in general is extremely beneficial because individuals with different backgrounds are going to bring variant solutions to the table when there's a problem requiring a solution. They're going to have unique perspectives (Phillips, 2009).
From a business perspective, diversity can really help an organization, though. With so many businesses going global, diversity among employees speeds up processes tremendously. Director of Global Sales at Colgate-Palmolive linked speed to diversity directly, stating "All business processes cut across country borders now, with virtual teams in North America, Europe, Latin America and Asia." (Iwata, 2007).
WHEN MULTICULTURALISM AND DIVERSITY ARE IGNORED
If PPQ Parts decides to ignore issues of multiculturalism and diversity in its international organizations, it runs the risk of alienating its foreign business partners and consumers. Just as the franchise owner of the Big Boy restaurant learned, it doesn't matter how great a product is if the cultural connection is missing. If PPQ Parts fails to make a cultural connection with its foreign host countries by being sensitive to their traditions, it could be perceived as discourteous and uncaring of the host countries' concerns.
POLITICAL AND ECONOMIC ISSUES
There are, additionally, political and economic issues that may arise during global expansion. They are as follows:
PPQ must be compliant with providing accurate reports to the appropriate authorities. These should provide both legal and regulatory compliance, both with U.S. law and that of the hose country (McGladrey, 2012).
PPQ may be subject to the host country's laws as far as employment, termination, marketing, environmental protection, competition. While businesses native to the host country may be able to skate around certain policies, U.S. businesses are not likely to be able to do so (McGladrey, 2012).
PPQ may find itself facing problems such as accounting discrepancies or lack of profitability. The real issue may be communication-language and cultural barriers. PPQ executives need to ensure a sound understanding of U.S. and foreign teams to prevent issues like this from arising (McGladrey, 2012).
Likewise, PPQ must establish clear controls for bookkeeping and loss prevention to prevent economic losses. "Businesses operating in less regulated and less economically developed areas of the world may find governmental enforcement so lax they need to provide close oversight to avoid losses or other problems" (McGladrey, 2012). Fortunately, Europe regulates foreign business very strictly, which makes it less risky for PPQ to do business in this part of the world (McGladrey, 2012).
IMPLICATIONS FOR PPQ IN GERMANY AND JAPAN
All of this has significance for PPQ executives in Germany and Japan. In Germany, executives are tasked with dealing with things as cost effectively as possible in an effort to deal with the country's financial crisis, in addition to being culturally aware of their need for such qualities as directness, timeliness, and formality (ITAP International, 2012). In Japan, PPQ executives must focus on keeping their language simple and straightforward, and recognizing that the Japanese view time much more fluidly than their American counterparts. Also, some downtime spent together after work is favorably looked upon by the Japanese (Freeman, n.d.). PPQ could incorporate some dinner sessions after training to ease the transition for Japanese employees into an American company.
Firoz, N. (2002). Think globally, manage culturally. International Journal of Commerce and Management, 12(3/4), 32-51. Retrieved from http://faculty.cbpp.uaa.alaska.edu/afef/ba447-think_globally_manage_culturally.htm
Freeman, C. (n.d.). Cross-cultural training. Dr. Neil S. Orkin. Retrieved from http://www.globaltrainingsystems.com/index.cfm?Fuseaction=ArticleDisplay&ArticleID=536
ITAP International. (2012). Tips for doing business in Germany. ITAP International. Retrieved from http://www.itapintl.com/facultyandresources/country-tips/germany-business-tips.html?lang=
Iwata, E. (2007, July 8). Companies ramp up diversity like never before. USA Today. Retrieved from http://www.usatoday.com/money/companies/management/2007-07-08-corporate-diversity_N.htm
McGladrey LLP. (2012). Going global? How you expand is just as important as where and why. Going Global? How You Expand Is Just as Important as Where and Why. Retrieved from http://mcgladrey.com/Business-Climate/Going-global-How-you-expand-is-just-as-important-as-where-and-why?itemid=730
Phillips, K. (2009, June 2). Diversity helps your business--but not the way you think. Forbes. Retrieved from http://www.forbes.com/2009/06/02/diversity-collaboration-teams-leadership-managing-creativity.html