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PPQ Parts Global Expansion: Political and Economic Concerns

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PPQ Parts has determined that for the company to expand globally over the next several years, its managers must be properly trained in multiculturalism and diversity management. PPQ Parts executives must be aware of any political and economic concerns that may arise during the expansion.

Using the library, course materials, and other Web resources to write a report for the senior management team that addresses the following:

1. What are some of the issues the host foreign country could face as a result of the expansion?
2. Explain what cultural barriers and diversity issues are commonly encountered by international/multinational (MNC) and global organizations.
3. Why has diversity become such an important topic in the international arena?
4. What can occur when issues related to multiculturalism and diversity are ignored in an international company?
5. Describe at least 2 political and 2 economic issues that may arise during global expansion and proposed methods of addressing them.
6. Explain the importance of and the implications of each of these items in PPQ Parts's expansion plans to Germany and Japan.

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The solution provides in-depth answers which summarize the possible concerns PPQ Parts may face during expansion. The solution is 1264 words long.

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1. What are some of the issues the host foreign country could face as a result of the expansion?

The host foreign country can face numerous issues as a result of the expansion. First of all, the entry of foreign firms in the country means competition to local companies. As a result, government may want to introduce or implement a protectionist policy to prevent competition from foreign firms. Further, issues may arise with respect to labour laws and other regulations, such as environmental regulations, taxation and accounting practices, etc. in the host country.

2. Explain what cultural barriers and diversity issues are commonly encountered by international/multinational (MNC) and global organizations.

There are numerous types of cultural barriers and diversity issues that are commonly encountered by MNC and global organizations in different countries across the world. Let us discuss these one by one. First of all, language is a major barrier to doing business in international markets. Language barrier can result in communication gaps, confusion and misunderstanding between two parties. If the executives of a global corporation are not aware of local language, they are not able to operate efficiently in such countries.

Another major cultural barrier is working practices and styles. The working practices and styles and approach towards work are quite different from one culture to another. Global organizations with employees from different cultures and ethnic background or employees located in numerous countries have to understand the peculiar cultural characteristics, working styles and practices and deal with their diverse base of employees accordingly. It is essential to understand that working styles and cultural preferences of local employees in overseas operations.

Similarly, several behaviors such as negotiation style, communication preferences, decision making approach, non-verbal communication and meeting styles are influenced by cultural and ethnic background. Hence, managers of global corporations have to understand and respect the unique cultural preferences and ...

Solution provided by:
Sandeep Bardia, MBA
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  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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