Autozone, an auto parts retailer is going international, research greenfield investments as a mode of entry for both countries (Brazil & Singapore) in a 5-to-6. This report is to include a table that summarizes the pros/cons of the mode, the risks it may present to your chosen company in both countries.
Identify three (3) cultural and/or geographical factors will have an impact on Autozone's operations. Then address how those factors impact the HR function. Pay particular attention to:
1. Staffing and recruiting for the new organization;
2. Training and compensation at the new organization;
3. Expatriate policies at the new organization. Please include references.
Foreign direct investment comprises different methods or modes of entry that are adopted by the firms to enter in a foreign country (Gorg, 2000). Organizations whether operating into a manufacturing or retail industry are going international by using the entry modes. Autozone a manufacturing company is also adopting the Greenfield investment to enter in Brazil and Singapore. There will be a discussion of cultural factors that have impact over the Autozone's operations. Pros and cons of using the Greenfield investment as a entry mode will be also covered. Apart from this, risk that may be posed by the chosen entry mode to the company in foreign nation will be also discussed.
Cultural factors play a fundamental role in the success or failure of a foreign direct investment. According to the cultural environment of Brazil and Singapore, it is identified that there are mainly three cultural factors that may impact the company operations. These are as follows:
Language: Language is the cultural factor that may impact the company operations in Brazil and Singapore. As people in these two nations use to speak in different languages that may pose a challenge in managing the operations.
Cultural diversity: As in Singapore and Brazil, there are different ethnic groups that reflect cultural diversity, so this can also influence the company operations.
Values: Value system in Singapore and Brazil is also different that may also impact the operations of Autozone (Dunning & Lundan, 2008).
All these factors may impact on the human resource functions in a critical manner. These are as follows:
Staffing and recruitment: To establish a new entity in a foreign country, it is essential to perform staffing and recruitment. Language spoken in Brazil and Singapore may impact the company staffing and recruitment policy in terms of using internal or external methods. As to recruit for the new organization, it is essential for the company people to understand the language spoken in these two countries. Lack of proper understanding in relation to the language may impact the entire recruitment plan of the company. Recruitment agenda if not understand by the country people, it is not possible for them to apply for the new organization that may delay the company plans.
In the same manner, cultural diversity may also influence the staffing and recruitment policy for the new organization. Presence of different ethnic groups in Brazil and Singapore may influence the recruitment procedure that further may delay the staffing plan of the ...
This solution discusses cultural and geographical factors that impact Autozone's operations.