As the VP of International Sales, you are responsible not only for sales but also for sales strategy. Prepare a preliminary report to the CEO identifying which three countries you think would most likely be interested in Our Company's mobility product and state why you think these would be good target countries. Describe the opportunities and risks in each of the target countries. Then discuss the cultural (including religion, ethical business behavior, social responsibility, language, etc.), political, economic, legal and technology issues you, as Vice-President of International Sales will face when selling into these countries. In addition, explain any other differences between selling the mobility product in the United States and selling it in your three targeted countries.
This is the first writing assignment for this course, 5-7 pages. My instructors' remarks for locating resources was "try Google."
THE FIRST COUNTRY IS CHINA
For U.S. manufacturers, there are more and more reasons to consider China a strong market. The dynamic and growing Chinese population, combined with the market access secured by China's WTO membership, is creating many opportunities for U.S. exporters. China is not just a market for the largest multinationals. In fact, 83 percent of all U.S. firms exporting to China in 1999 (the last period for which data are available) were small and medium-sized enterprises, and 46 percent were very small companies-each with fewer than 20 employees. As U.S. companies increasingly focus on China, the Commerce Department is strengthening its export services.
MOBILITY AIDS SHOULD BE SOLD IN CHINA BECAUSE
While the global economy grew less than 2 percent last year, the Chinese economy grew 8 percent, according to Chinese data. Since China's opening in 1979, gross domestic product growth has averaged 9 percent a year. Additionally, China has charted the fastest economic growth of any major economy since 1990.
While much of this growth is attributed to Chinese government spending and foreign direct investment, consumer demand in China is beginning to play a larger role in driving the economy. More cellular phones are in use in China than in any other country in the world. China is the second-largest personal computer market in Asia after Japan, and sales of PCs have risen at an annual average of 67 percent since 1993. Consumer purchases of automobiles have begun to take off. Motor vehicle demand in China is expected to grow from around 2 million units today to 10 million units within a decade.
CHINESE CLIMATE IS EXCELLENT FOR US EXPORTS
Concurrent with the rise in consumer demand, China's WTO accession has created new opportunities for U.S. exporters. One example is the automotive sector. Substantial tariff reductions last year prompted a price war and a 34-percent jump in auto sales. In turn, U.S. auto parts exports increased more than 60 percent in the first three quarters of 2002, in comparison with the previous year.
As a new WTO member, China has begun to lower tariffs, create a more transparent investment environment, overhaul and publish its laws and regulations, strengthen intellectual property laws, and restructure standards and testing procedures. But many of these reforms are being phased in over several years, and many tasks remain undone. Market barriers remain, and China still faces challenges in such areas as enforcing intellectual property rights, further improving transparency and the rule of law, and ensuring that product standards are in line with international norms and are applied equally to domestic and imported goods.
The U.S. Department of Commerce closely monitors China's WTO implementation. Even before China's accession to the WTO, the department's International Trade Administration (ITA) offered exporters pursuing the Chinese market an array of trade tools and services. However, since the WTO accession of China in December 2001, the ITA has established several new resources for businesses interested in China.
INTERNATIONAL SALES CAN HAVE CHINESES CONTACTS HERE IN THE USA
Since December 2001, representatives from the ITA China Team in Washington, D.C., have traveled across the United States to meet with small companies, chambers of commerce, industry associations, and other groups at 19 events. The objective of these outreach activities has been to promote understanding of what China's WTO membership means for U.S. businesses, as well as to share information on the many services that the Commerce Department offers exporters. In New York City, Omaha, Minneapolis, and Los Angeles, among others, ITA China specialists have participated in conferences, workshops, and briefings prior to trade missions for exporters interested in China.
CHINA IS TRYING TO INCREASE TRADE WITH USA, SO WHY NOT MOBILITY AIDS?
In China, the ITA has expanded its staff and increased its focus on the WTO by inaugurating a Trade Facilitation Office (TFO) at the U.S. embassy in Beijing. TFO team members work closely with American businesses, Commerce Department trade and WTO specialists in Washington, and embassy staffers to ensure that U.S. companies enjoy the benefits of China's WTO accession.
The Trade Facilitation Office's mission is manifold. The TFO conducts outreach activities, working closely with the American business community in China to identify real and potential market access problems and issues as China implements its WTO obligations. The Facilitation Office also provides information to U.S. companies on what China's WTO accession means for their operations in China or exports to China. TFO staff also advocate on behalf of U.S. exporters to ensure that broad WTO compliance issues and specific WTO-related problems U.S. industries encounter in China are raised with Chinese authorities.
Additionally, the office organizes seminars in China on WTO-related issues for Chinese officials, as well as programs to familiarize Chinese businesses with international commercial practices and standards. The Trade Facilitation team also provides feedback to U.S.-based Commerce Department staff to share with American companies.
CHINA IS A GOOD TARGET FOR MOBILITY AIDS BECAUSE
China is a large, diverse and complex market that is going through rapid change and reform to move to a more open economy and trading environment. While there are many opportunities in China, there are also many factors to consider before entering the market.
As a general rule, companies who wish to expand to China should gain experience from other markets in the region first and be prepared for the long-term commitment to enter the Chinese market.
The following are some tips for exporting to China for the first time.
Research the Market
It is important that you get key market information to evaluate whether it is worthwhile for your company to do business in China. Some things to consider are:
· whether your product/service is suitable to the China market;
· which region to focus on in China;
· who are your competitors;
· what are local buyers'/consumers' tastes;
· impact of any reforms and regulations.
Places where you can get information on China include: Department of Foreign Affairs and Trade, Austrade, China Council for Promotion of International Trade (CCPIT) and Ministry of Commerce, China.
The new Ministry of Commerce was established in March 2003 based on the merging of the State Economic and Trade Commission (SETC) and the Ministry of Foreign Trade Economic Co-operation (MOFTEC).
The new Ministry combines MOFTEC with departments in charge of domestic and foreign trade in the SETC and the State Development Planning Commission (SDPC), which is also to be renamed as State Development and Reform Commission (SDRC). The new system is part of the Chinese Government's reform plan to upgrade the administration of trade, banking, State-owned companies and other key sectors..
If you have identified opportunities relevant to your company, you may want to visit China and make your own assessment of the country and its people. Read about China and its history before you leave - history is of immense importance to the Chinese and some knowledge of it will help explain how the Chinese perceive themselves and you.
OPPORTUNITIES FOR INTERNATIONAL SALES
If you have a potential business partner in China, your initial visit can be an opportunity to size up their company and assess their level of technological know-how. Chinese hosts are often happy to show visitors around production facilities. You should ask about the size and scope of the operation, its business plans, whether it has access to foreign exchange, and how much experience it has in dealing with foreign companies.
Don't see your visit to China as a one-off approach, which will automatically lead to instant orders. Instead, regard it as stage one in a long-term strategy of Guanxi cultivation.
Commitment and Resources
Think twice before you commit to China and be prepared to double the amount of time you invest. China is a complex market, which requires considerable money and time.
Negotiating a deal with a Chinese business partner or getting a licence could be complicated and time consuming. For a foreign or joint venture company, the minimum registered capital could range from USD$62,000 to USD$37 million.
You may need funds for airfares, accommodation, legal services, advertising, sales promotion, interpreting and translating, setting up joint ventures or establishing representative offices in China.
Before you commit, make sure your company has the capacity to meet the costs and can invest the time. Look at your products or services and determine if they are suitable for the current China market. China is looking for products tailored to its market. Companies which examine the obstacles to technology in China and adapt their products to overcome them, will impress Chinese officials and help establish strong relationships.
INTERNATIONAL SALES CAN EASILY IDENTIFY THE CUSTOMERS
Locating a suitable Chinese partner is one of the most important steps towards your successful business in China. A good partner will not only make your first step into China a pleasant experience, but also help you build up the right connections for your company's future development in China.
Check the reliability and credibility of the data on your customers from independent sources. Avoid talking only to those people to whom your Chinese partner or buyer directs you. Bear in mind that a contract with an insolvent customer is worthless.
Each of the main investment centres in China will have a local Foreign Trade and Economic Co-operation Commission. This is an agency of China's Central Foreign Investment Regulatory Ministry known as the Ministry of Commerce (MOFCOM). It can provide information and advice on available, approved projects and details on potential local partners.
THE SECOND COUNTRY IS JAPAN
The Japanese economy was long mired in recession, but finally appears to be on the road to recovery.
Japanese stock prices, after hitting rock bottom in April of last year, are on the rebound as well. And
companies are becoming more focused and profitable, following years of private sector restructuring, in
which firms sought to eliminate what became known as the three excesses, namely: excessive facilities,
employment and corporate debt. The surge in capital spending-in line with the recent boom in digital
technology-related industries-is also helping to fuel the current recovery trend. Having said this, I think it
JAPAN IS AN EXCELLENT MARKET FOR MOBILITY AIDS
is crucial that Japanese companies continue to take aggressive measures and complete the ...
New challenges confronting management since the beginning of the 21st century?
What new challenges (or changes) are confronting management since the beginning of the 21st century?
Please refer to your readings this week. Post should use in-text citations.
Introduction: Three Questions
Management of a work unit is not a question of whether or not you will direct change efforts, but is an issue of when and how. Here are three questions to consider for being an effective change manager. Each question goes beyond operational steps to help you deepen understanding of "why" this change at this time and how you can offer more effective interaction with those reporting directly to you.
â?¢ How do customers and their needs drive organizational change?
â?¢ What is the role of direct reports for innovation within a company or work unit?
â?¢ When developing a strategy or plan to roll out important company changes, how should a manager view existing organizational structure?
â?¢ Organizational change: A plan or set of new ideas and behaviors desired by leaders; change is likely to include culture, but it is only within the past five years that culture has been widely discussed as central to effective change. Organizational change is usually undertaken with the intention of developing or expanding company markets, products and services (i.e. organizational development is a subset of organizational change).
â?¢ Organization development: A set of plans and actions which enable company and work unit changes in culture. These tasks and interactions focus on human and social aspects to improve capacities for adapting and solving problems. OD interventions are participatory at multiple levels within a company, government or nonprofit organization.
â?¢ Organizational culture: Core values, rituals, and expected activities of a company, nonprofit or business. These factors answer the questions: What's important to the company and how is work done in this unit? Group norms reflect a work unit's culture. In comparison to national culture, some organizational cultures are stronger and some are not. The balance between organization and country culture is an emerging area of research and tensions between cultural values can increase during the stress of change. (See Module 6 for more information on the impact or role for an organization's culture).
â?¢ Organizational culture change: Often overlaps use of term, "organizational development". Strategy specifically shifts how work is done in the organization to increase commitment and empowerment of employees, as well as it provides stronger ties between the company and its customers. Culture change of a work unit or company is difficult because it challenges established ways of thinking and embedded values which frame attitudes. Team building is a specific activity of an organizational culture change.
â?¢ Transformation: A significant change which cannot be accomplished easily or quickly, but is viewed as needed and worthwhile. A transformational change should be attentive to the culture of the business.
What Needs to Change: How to "see" those Factors
Organizational leaders will continue to face change management problems of innovation, performance and accountability, but the pace and complexity are at a magnitude never before experienced. As a result of the appetite for change to develop or expand products and services, it becomes important to consider how to cluster or group organizational change activities. Here are two (2) important categories for helping you to frame and see changes necessary to management.
â?¢ Incremental Change - Incremental change is improving existing structure, products and/or processes. Technology software and hardware often spark these types of change and much of the management activity takes place at the work unit level.
â?¢ Radical Change - Radical change is introducing new products, processes, and structures (re-structuring or re-engineering). Radical changes can include mergers or the introduction of a whole new organization in conjunction with (or replacement for) the existing organization.
Who Leads Organizational Change: The Role for "Agents"
Change comes about because people lead--they initiate the plans, describe the expectations and then direct accountability. When guiding change, a manager takes on the role of being an agent or exerts leadership among direct reports. Often, change agents build upon technological innovations such as new software. Other change agents start a change effort from the awareness of need for new products and services. And sometimes, a manager exerts leadership based on perceptions about the organization's culture and a need to change it in order to survive. Certain department functions often become the spark for acting. For instance, research and development, marketing or senior level planning units can be change agents, too.
Another way to examine agency for change within an organization is to consider the change as driven by internal factors or external factors. Technology, a major force to for change and development, is primarily external because the innovations usually occur separately and are then purchased as a business service. In contrast, development of new products and services, or altering organizationalstructure, or developing organizational culture are internal agents because they are driven by recognition of the need for an internal response. The use of these categories can blend,but internal change often stems from the organization's external environment. It's important to understand that there are departments within an organization which serve an intrinsic internal function of promoting change. These departments include research and development, marketing and planning.
Mechanics of Change
Daft writes in detail about the mechanics of change and you may to review some of that information more closely. Often, managers want to consider the pros and cons of approaches to organizational or work unit change. But as you think about the change tools you will need as a manager, consider that the "techniques" of change are fairly constant. In contrast the "tools" of change (especially use of technology and particularly information technology) are not nearly so stable. For instance, more and more work units now apply group software practices, a more recent technology innovation, to refine, customize changes in products or services.
However, there are several key concepts on which you should aim to understand in order to be effective in your management of a work unit or organizational change. These concepts help recognize change, when it's needed and how to introduce it:
â?¢ "Incremental change" and "radical change" are not mutually exclusive.
Each may incorporate the aspects of the other. Radical change, once introduced, often incorporates the aspects of incremental change. A new product, division, or process, once introduced, may then be rolled out via incremental changes, with priority given to resources in one department or work unit, then another. Incremental change such as adaptation of a software upgrade may provide important new information about customer desires, which in turn develops awareness of radical change, especially when improvement does not occur.
â?¢ Change is driven by IDEAS and by NEEDS.
One of the easier ways to keep the interconnections between ideas and needs in mind is to take a moment and review the University Art Museum case (Daft pp. 81-84). The original museum came about as a result of an idea of the founder further embellished by the ideas of Ms. Kirfoff, who led the museum for many years. However, over the course of those years, the art department, the art history students and the faculty came to rely on the museum for many things, such as exhibits and their catalogues. As a result of student, faculty and administrator reliance, decisions were driven by needs.
â?¢ Once a change is identified, it goes through three primary stages:
Adoption of the change (agreement as to what to do);
Implementation of the change (agreement as to how to do it);
Allocation of the resources necessary to effect the change (both fiscal and human resources).
Within these stages of change, certain techniques stand out. These include: a) attention to urgency when launching the change; b) finding task subsets of the adoption plan that are seen as highly "do-able" and then focus on those tasks to gain wins; c) detailed attention to ongoing communication supportive of implementation.
â?¢ Change can be administratively driven or it can be technically driven.
A decision by management to expand into new geographic markets as part of long range planning is an administratively driven change. Other administrative decisions could be decisions to emphasize certain brands or products, or give priority to particular services, such as the development expansion of a financial service operation. Technology often influences change in management of schedules and time. The decision of a brokerage sales force to shift from the traditional "9-5, Monday through Friday" workweek to a "24/7" workweek took advantage of the Internet's ability to provide real time information on the fluctuations of foreign stock markets. Historically, most change was administratively driven, with attention to effective "top/down bottom/up" vertical communication. But with advances in technology, co-location of work units in many geographic settings, attention to 24/7 demands for services and products, technology will likely support devolved, lateral, team decision making and diversity of viewpoints for change strategy.
Change Requires Attention to Organizational Structure
There continues to be two basic forms for organizing work. (Consider returning to Module 2 and p 154 of Daft for another look at structure)
1. The mechanistic structure where the focus is concentrated on reporting relationships and control. These organizations are primarily hierarchical and vertical in form.
2. The organic structure, which is more horizontal and non-hierarchical, to allow for freer flow of ideas and for innovation.
However, as you learned in Module Two, there can be a blending of facets of the mechanical with the organic. Daft identifies this blending as an ambidextrous structure, which has a mechanistic structure but is sufficiently flexible to allow or encourage organic units within the organization. Often, such units result in a parallel approach: employees may work in teams or on projects that cut across organizational lines while simultaneously retaining their function and position within the hierarchical structure. The matrix and hybrid organizational structures are examples of ambidextrous structures.
But these structures need additional thinking when approaching specific change plans and activities. It can be important to your management success to take another analytical step. Daft (p. 428) refers to a dual core approach to organizational change. It is attentive to the administrative core (i.e., management and supervision) and the technical core (those activities that actually produce goods or services). Both functional cores can bring about change -- or obstruct it, making worklife very challenging to your management.
It may be the administrative core needs to be more responsive (e.g., the structure must be changed with likely re-organization in departments or work units as well as their reporting/management accountability) or it may be the technical core needs to be responsive (e.g., the processes, products or services need to be changed). For example, when Daimler Benz merged with Chrysler Corporation, decisions as to which country would serve as the headquarters, in what currency would employees be paid, which approach to executive compensation to adopt, etc., were driven by the administrative core. However, how much emphasis was to be placed on innovation v. reliability and whether or not to develop a "cross platform" vehicle were driven by the technical core. In fact, the ability of the technical core to develop a cost-effective cross platform vehicle eventually overrode the decision by the administrative core not to pursue that strategy. Evolving from the changes in strategies, Chrysler later became the leader in certain vehicle designs.
In the Chrysler example, you can perceive that changes require adjusting of priorities. Many -- but not all -- changes require re-setting goals by both administrative and technical cores concurrently or sequentially.
Considering Barriers, Consequences and Options
A mechanistic structure does not readily lend itself to change. On the other hand, organic structures become less effective as these organizations grow, which then sparks difficult transitions to more maturity and expansion.
Change does not come without effort and there are barriers consistently present for you as a manager to address. As Daft notes on p. 435, change in an organization can be slowed down, diverted or even thwarted by:
1. Excessive focus on the costs involved
2. Failure to perceive (or appreciate) the potential benefits of the change
3. Lack of coordination or cooperation, especially in those circumstances where two or more systems or structures (the old approach, an interim approach and a new approach, etc.) must coexist at certain points in time.
4. Avoiding uncertainty or risk
5. Fear of loss -- of power, of status and up to and including a fear of loss of employment itself.
Unintended Consequences and Development
Things go wrong. As much as 80% of new products fail upon introduction and an additional 10% disappear by the five year point; that is an "unintended consequence," unless you're really looking for a tax write off! Even more serious unintended consequences can occur: product defect (Dell had to recall thousands of laptops because the batteries might explode), poor market reception (good-bye Oldsmobile and Plymouth), etc. How the organization responds to these unintended consequences and your role in managing unexpected consequences are important. Reactions and adaptations are also dependent in part on its structure:
1. A mechanistic structure will probably take longer to respond to an unintended consequence and will be slower in making the changes necessary. On the other hand, once the organization has determined its response, a mechanistic structure will probably be better able to sustain that response over an extended period of time.
2. An organic structure should be able to respond more quickly; however, it may not be as able to sustain that response over the long term because then there can be serious gaps in the administrative core.
3. The ambidextrous approach would appear to be, at first glance, "the best of both worlds." However, since it is in reality a hybrid organization, the balance between its mechanistic structure and the ability of the organic units to function quickly and independently would face an intense sorting out of priorities, and as a result, push and pull its management to respond well.
However, all is not lost. There are ways in which the culture of an organization, no matter how large or how old, can be altered to encourage change. As Daft notes on p. 431, some of the current encouraging factors are:
â?¢ Re-engineering is the commitment to radical redesign of organizational processes. Everything is open for discussion; there are (or should be) no "sacred cows" and no protected turf. This is one of the most radical approaches to organizational change. It needs particular and sustained management commitment.
â?¢ Diversity-- diversity of every type: ethnic, cultural, lifestyle, etc. -- is a fact of life for organizations, both in terms of their workforce and in terms of their customer base and potential customers. Diversity brings a wider range of viewpoints and perspectives for new ideas and innovation. This forces management to re-evaluate not only how they do things but also what they produce. Just consider the differing significance that the color red plays in Asian cultures (happiness, celebration) and in western cultures (danger, excitement) and its impact on virtually every aspect of marketing from product design to advertising.
â?¢ The Learning Organization is one that has developed an organizational culture that encourages the pursuit of information, especially attention to external trends and an organizational mindset for sharing of information freely.
There are several fields and multiple themes describing organizational change, organization development, multinational growth, and influence of cultural dynamics. By far the larger field of research centers on the topic of organizational change (approximately 7400 published articles, 2005-09, with more than 2900 being peer reviewed). Of particular interest are a) diffusion methods across multiple work groups and b) metrics such as Return on Investment (ROI) applications.
â?¢ With the growth of multinational corporations, there a subset of studies, which emphasizes change processes more useful to large businesses. A recurring theme is strategic change for a multi-national must not only focus on what change, but also pay particularly attention to diffusion. A second theme is the role for research and development teams/groups, work units which appear to hold more skill and less resistance in larger, global companies. These units may informally be inclusive without much attention to the ways they address diversity and multi-culturalism, with more research needed as to how they adapt specifically.
â?¢ As attention to change research has increased, ideas have also expanded around topics of success, development and adaptation results. More than 60 research studies have been published in the past five years. One theme within the studies suggests that because organizations and workers have faced so many rounds of change, there's the need to look at lessons learned within the company about past change efforts in order to avoid pitfalls and better assure success, particularly in terms of worker and manager turnover during more intense phases of organizational redesign (change) efforts.
â?¢ A second theme of study focuses on local markets and countries expanding their economies. In examining strategic business change, several case studies reported on the dynamics of China and Brazil in which there is workforce change. The results of these case studies suggest additional attention and resources needed for management.
Curious? Want to Know More?
Consider the UMUC online Library using these search words:
â?¢ Organizational Change
â?¢ Multinational and Organizational Change
â?¢ Transformation and the Organization
â?¢ Strategy Change and Development
â?¢ Strategy Change and Adaptation
Websites with research papers
â?¢ http://www.ccl.org/leadership/research/sharing/index.aspx#whitePapers, website of the Center for Creative
Leadership, a research and practice center, focused on both the science and art of leading
â?¢ "Google" Rosabeth Kanter Ross, and use Harvard Business School link>Publications
Developed by Dr. Linda L. Smith, with help from the management faculty.View Full Posting Details