Solutions of Case Studies

Submitted to :
Md. Rashedur Rahman.

Lecturer,

Department of International business.

Faculty of Business studies,

University of Dhaka.

Submitted by :
MD. Sabbir Ahmed Akash

Batch: BBA-15(IB-2nd)

Roll No: 64

Course No-206

Department of International Business.

University of Dhaka.

Date of submission: February20, 2011.

Part-1,Case No- 1. Colgate’s Distasteful Toothpaste

Identify the major strategic and ethical issues faced by Colgate in its partnership with
Hawley and Hazel.

Answer: Colgate face some strategic and ethical issue in its partnership with Haweley and
Hazel. Those are given below :

Strategic issue :

1. Colgate had no right to make decision in management which called management

prerogative.
2. African black offence it’s product because of brand name and logo promote racism.
3. Overcome bad image because of marketing a toothpaste accused of racism.

Ethical issue :

1. Colgate want to take step but because of agreement with Haweley and Hazel, it couldn’t
do anything.
2. It offense it’s loyal customer in home country.

What do you think Colgate should have done to handle the situation?

Answer : The major problem was “Colgate’s support to ‘Darkie’ was sullying its goodwill and
home market was slowing down”. More adverse situation was that Colgate had no right to make
decisions. So, Colgate might have adopted some initiatives to keep its image safe within
domestic market.I think Colgate should have done some steps to handle these situation as –

I. Colgate should take step by taking control in management.

II. It can change it’s product name and logo.
III. When making a brand name and logo, it should consider all demographic, political and
others factor which can influence in Colgate marketing.
IV. It should take step, which don’t violate trade mark law.

Is it possible for Colgate and Hawley and Hazel to change the toothpaste's advertising
without sacrificing consumer brand loyalty? Is that a possible reason for Colgate's not
responding quickly to domestic complaints?
Answer: No, Colgate and Hawley & Hazel couldn’t change the advertising without sacrificing
its loyal customer. A brand name is significantly more than a product. Product comprises more
physical attributes and dimension. It is nothing more than a interchangeable commodity. Its
image3 was tarnished badly in the eye of all customer because of racism. Perhaps, it might not
possible for Colgate and ‘Hawley and Hazel ‘to change the toothpaste’s advertising without
sacrificing consumer brand loyalty. Yes, it was the possible reason not responding quickly to
domestic complaints.

In the end, was a “no management rights” clause good for Colgate? What could have
happened during the negotiation process to get around this problem?

Answer: Yes, “ No management right ” was bad for Colgate. Because of this cause Colgate
couldn’t take any action to remove logo quickly. The situation was opposite because the ‘Darkie’
toothpaste had strong brand loyalty in Asian countries and totally negative in Western market.

Part-, Case-2, Advertising or Fee Speech? Nike and Human

Rights

What ethical issues faced by MNC's in their treatment of foreign workers could bring
allegations of misconduct in their operation?

Answer: Employing child labour, using workers overtime, paying unfair salaries, treating
inhumanly with workers, is ethical issues faced by MNC that could bring allegation of
misconduct in their operation.

Would the use of third party independent contractors insulate MNC's from being
attacked? Would that practice offer MNC's a good defensive shield against charges of
abuse of “their employees”?
Answer: Yes, the use of third party independent contractors insulate MNC from being attacked
by customer for ethics.
Yes, this practice would offer MNCs a good defensive shield against charges of abuses of “their
employees.

Do you think that statements by companies that describe good social and moral conduct in
the treatment of their workers are part of the image those companies create and therefore
are part of their advertising message? Do consumers judge companies and base their
buying decision on their perceptions of corporate behavior and values? Is the historic
“made in” question now being replaced by a “made by” inquiry?

Answer: Yes, I think that statements by companies that describe good social and moral conduct
in their treatment of their workers are part of the image those companies create and therefore are
part of their advertising message. No, consumers don’t judge companies and base their buying
decision on their perception of corporate behavior and values. Yes, the historic “made in
“question now is being replaced by a “made by” inquiry.
Yes, Consumer judge companies and base their buying decision on their perception of corporate.

Given the principles noted in the case, how can companies comment on their positive
actions to promote human rights so that consumers will think well of them? Would you
propose that a company (a) do nothing (b) construct a corporate code of ethics,(c) align
itself with some of the universal covenants or compacts prepared by international agencies?

Answer: Company can confess of malpractising with workers. Then both company and workers
can bring up their upcoming plan to improve workers condition. A business enterprise promotes
its reputation via advertising through factual representation and companies should speak
truthfully about such sensitive issues

I propose company should follow corporate code of ethic. But if it fails to follow then it should
follow some of universal covenant or compacts prepared by international agencies.

Part-1, Case-3, Pharmaceutical Companies, Intellectual

Property, and Global AIDS Epidemic :
Do pharmaceuticals companies have a responsibility to distribute drugs for free or at low
costs in developing countries? What are the main arguments for and against such an
approach?

Answer: Yes, Pharmaceutical companies hae a responsibilities to distribute drugs for free or at
lower price in developing countries.

Arguments for such approach :

 Many people are suffering for disease in developing countries and mst of them can’t
afford the expanse of drugs.

Arguments againist such approach :

 Developing drug is very expensive. So pharmaceutical companies can’t sale this drug at
low price.

What are the principal arguments of pharmaceutical companies that oppose making
exceptions to IPR laws for developing countries? What are the arguments by NGOs and
others for relaxing IPR laws?
Answer: Principal argument of pharmaceutical companies is exception of IPR laws in
developing countries will make them lose market share and significant profit.

Principal argument of NGO and others is poor people of developing countries can’t to buy
original version of drugs. So, relaxing ofIPR laws will make generic version of drugs available to
them, Company can do direct investment and licensing.

Public health is first concern, not profit.

What impact would you expect South Africa's decision to levy duties on drugs imports
from Western nations to have on the international distribution of drugs to South Africa?
Answer: South Africa decision to levy duties on drugs import from western nation would
increase the import cost as well as price of drug. As price increase the demand o drug will fall
low.

In June 2002, the WTO extended the transition period during which least-developed
countries had to provide patent protections for pharmaceuticals. In your opinion, is this an
appropriate change in policy or a dangerous precedent? What could be some of the
negative ramifications of this resolution? What about the effects for other industries?
Answer: In my opinion, It is an appropriate change in policy. The LDCs would get a long time
for preparation to provide patent protection for the pharmaceuticals which would help them to
receive aid from the developing countries.But this policy change have some negative impact.
Such as :

1. Pharmaceutical company may face long term threat in their business.

2. Developing countries will not buy to provide drugs by themselves.

Given the initiatives announced by global development and aid organizations among
pharmaceutical companies’ themselves, was it necessary to relax IPR rules in order to
ensure that adequate supplies of AIDS medicines would be available for distribution in the
developing world?
Answer: Yes, to ensure that adequate announced supplies of AIDS medication would be
available for distribution in the developing world, IPR rules must be relaxed.

What role do MNCs have in providing funding or the assistance to international

organizations such as the Global Fund?
Answer: MNC can contribute through giving portion of their annual profit or product as
donation to international organization such as global fund.

Part-2, Case-4, Cross-cultural conflicts in the Corning-Vitro

joint venture

Identify & discuss Corning’s strategic predisposition toward a joint venture with Vitro.

Answer: Corning’s strategic predisposition toward a joint venture with Vitro is to gain access to
markets that it can not penetrate quickly enough to obtain a competitive advantage and the
second is to bring its technology to market.
Corning currently has multiple ventures that illustrate market penetration. Samsung-Corning is
an alliance in which Corning provided its unique proficiency of television tube production while
Samsung provided expansion into the television market.

Cultural clashes among partners in joint ventures are not a new issue. Discuss why an
MNC & specifically Corning would be interested in fully understanding the culture of a
potential partner before deciding on an alliance.

Answer: An MNC and specially Corning would be interested in fully understanding the culture
of a potential partner before deciding on an alliance, because different perception to the business
operation may lead to conflicting styles and time allotment for decision making.

Cultural Clashes may explode if there will be an existence of absent of fully understanding the
culture of a potential partner before deciding on an alliance.

Corning perceived that the cross-cultural differences were hampering both companies’
organizational capability and strength to take the swift management action that is needed in the
vibrant business environment of both countries.

If Corning and Vitro had decided to remain in the alliance, how could they have overcome
their difference to make the partnership a success?
Answer: If Corning and Vitro had decided to remain in the alliance, they have to overcome
their differences to make the partnership a success by taking some strategies. Several measures
can be taken to progress communication efficiency. A number of steps can be taken to improve
communication effectiveness. Some of the most important include-

 Improving feedback
 Providing language and cultural training
 Encouraging flexibility and cooperation.

These steps can be particularly helpful in overcoming communication barriers in the

international context and can lead Corning-Vitro joint venture to more effective international
management.

Discuss why both companies would continue to distribute each other’s product after the
joint venture failed. What impact might the public statements about the failure have on
this relationship?
Answer: While operating together under the joint venture both the companies understood their
similarities and dissimilarities. Joint venture might be failed due to many unavoidable
circumstances, but they had no major problem between themselves. So, they decided to continue
their operation as a form of mutual distribution of products.

The impact of the public statement was not very severe Vitro’s executive was a little bit upset,
but only indicated cultural clashes. So each company was clear from any obligations and
liabilities, so both side had no effect on their business and share-price. As a result both
companies were able continue as a friend.

Part-2, Case-5, Integrating National and Organizational

Cultures: Chemical Bank’s Mergers in Europe

What challenges do mergers create for managing national and organizational cultures?

Answer: Merger’s create following challenges to manage national and organizational cultures:

1. Filling up the senior positions and maintaining the level of internal contention.

2. Keeping existing clients’ happy and normal revenue.

3. Keeping the best employee inside the company and recruiting the best ones

4. Leadership challenges.

5. Differences in language and history.

 6. Difference in ways of maintaining of relationship.

7. Differences in rules and regulations

How might the challenges associated with post-merger integration in Europe be affected by
the fact that the parents of each company in both mergers were based in the United States?

Answer: After merger the challenge was to resolve the differences between all the employees as
the parent company was in United States, so the manager would arrange regular meetings and
some sort of social gatherings such as parties, so that everybody got acquainted with their
colleagues and therefore it would promote a friendly working atmosphere.

What management skills are most important to making a cross-border merger successful?
How might these skills differ from those needed during “routine” periods?

Answer: The following management skills are important for making cross-border merger
successful:

 Understanding over various cultures, norms and social values.

 Communication techniques and procedures.

 Human resource management

In routine periods the manager does not have to be so much aware about the cross cultural
context of the various employees. In routine mergers it’s likely to be less risky.

What specific steps were taken in the two mergers to try to align the interests of different
parts of the organizations so that they were all working toward the overall good of the
firm?

Answer: After a merger employees of different cultural backgrounds and with varying specialties and
expertise actually strengthen an organization’s culture energize organizations, break down barriors to
change and provide new opportunities. First the cultural similarities and dissimilarities are
identified. Then efficient employees are retained in the organization. Trainings provided to
improve the efficiency of the employees.

How might diversity among employees of different cultural backgrounds and with varying
specialties and expertise actually strengthen an organization’s culture after a merger?
Answer: Merger permits a corporation to structuralize its workforce with the mixture of
expertise and specialties which increases the performance, efficiency and competency of the
company

Part-2, Case-6, Euro Disneyland page: 216

Using Hofstede’s four cultural dimensions as a point of reference, what are some of the
main cultural differences between the United States and France?

Answer: According to Hofstede’s four cultural dimensions there are following cultural
differences between United States and France: In United States there is less power distance than
in France. As we can see labors refused to work for Euro Disney in France but In USA Disney
faced less labor problem. In France low-uncertainty-avoidance exists than USA, Frenchmen are
reluctant to work if only they are requested to cut their pony-tail. In France femininity is present
and on the other hand masculinity is present in USA. United state’s culture is very high in
masculinity index while France lacks this index. United state’s culture is much more individualistic than
that of France.

In what way has Trompenaar’s research helped explain cultural differences between the
United States and France?

Answer: Fons Trompenaars is another Dutch researcher gives another description of how
cultures differ by dividing culture in five orientations like- “Individualism vs. Particularism”,
“Neutral vs. Emotional” etc. Now when going through the case I have noticed that the
Americans belief in particularism on the other hand Communitarianism is practiced in France.
I’ve also noticed that the Frances are so much emotional but Americans are neutral. USA is more
achievement oriented, on other hand France is neither achievement oriented neither ascription
oriented, they are rather balanced.

In managing its Euro Disneyland operations, what are the three mistakes that the company
made? Explain.
Answer: The three major mistakes they made are:

 Euro Disney expected French-people to follow queue, but they do not like to follow
queue. As they have different perspective about personal space, thus created
dissatisfaction.

 Disney posted their advertisements for work bids in English and tried to avoid small and
medium firms, that made some feel like aliens in own country. That created serious
discontent among various groups.

 Euro Disney had a dilemma with contractors and sub-contractors regarding payment.
Disney paid the main contractors according to contract, but the park got expanded than
the actual plan. So sub-contractors had to complete some additional construction and
Euro Disney opposed in paying sub-contractors claim, but finally was forced to make the
payment.

Based on its experience, what are the three lessons the company should have learned about
how to deal with diversity? Describe each.

Answer: .In managing Euro Disneyland operations, the following three mistakes were made-

 French were reluctant to play the game by queuing

 Disney placed its first ads for work bids in English leaving smaller and medium sized
French firms feeling like foreigners in their own land
 Disney forced to bail out no subcontractors who were working for the Gabot-Eremco
constraction contracting group, which had been unable to honor all of its commitments.

The company should have learned the following lessons to deal with cultural diversity-

 As French were not used to queue, they had to make sure that people need not to wait in
queue
 The company should have payed importance to the French firms to work for bids
 The company should be considerable with the construction group.
Part-2, Case-7, Wall Mart’s Japan Strategy

Do you believe Wal-Mart can be successful by circumventing the current Japanese

distribution system? What are some of the problems you foresee?

Answer: Yes, Wal-Mart can be successful in circumventing current Japanese distribution

system.

Japan’s retail market has its own culture specific quirks that are often difficult for any outsiders
to fully grasp. Japan’s current distribution system is a huge barrier to Wal-Mart’s traditional way
of doing business. Wal-Mart’s direct-supplier system could not be more different in its design, its
business philosophy and its operations from Japan’s multi-layered system.The major problems
are:

 Japanese traditional social distribution system.

 Acquiring suitable place for retail shop in busy areas.

 People’s attitude toward product discrimination: “cheap goods are low quality goods. “

Do you agree with Wal-Mart’s entry strategy? What are some of the inherent risks? Do
you think a faster market entry would be more effective?

Answer: Yes, I agree with Wal Mart’s slow and steady entry strategy. But in this strategy there
is some inherent risk. The risks are-

i) Such deliberate pace will give the competition time to create barriers.
ii) Japan’s multilayered distribution system where Wal Mart is quick to bypass such
networks.
iii) Japanese people are traditionally reluctant to consume or purchase low price
goods. Wal-Mart has to change their thinking pattern; it’s sometimes very risky
and time consuming.
A faster movement would not be better for Wal mart. as grabbing the first mover advantage
because the cultural differences must have to be flawlessly analyzed and then perfect strategy
should be implemented at the accurate time.
In your opinion what is the single most important thing Wal-Mart can do to ensure success
in Japan? Explain?

Answer: The single most important thing Wal-Mart could do to ensure success in Japan is to
change the perception of Japanese consumers. Traditionally Japanese consumers believe that low
priced goods are low in quality, which is not true actually true. Japanese people are quality
conscious. They believe higher quality products could not be at a lower price. On the contrary
Wal-Mart offer the world higher quality products at cheaper rate.

Do you think Wal-Mart is doing enough cross-cultural training with its Seiyu employees?
What are the greatest challenges Wal-Mart faces in relating to its Japanese employees?

Answer: Yes, Wal-Mart is doing enough cross-cultural training with Seiyu employees. To
reinforce the importance of selling correctly, Wal-Mart is putting store managers through
weeklong training sessions and has flown hundreds of Seiyu workers to its headquarter. The
greatest challenges will be to teach the employees to be open, sanguine and purpose foc
Part-3, Case-8, KNP, N.V. Page-345

In formulating its strategy for the new decade, what are the first steps that KNP should
undertake?

Answer: In formulating strategy it should become a globalized firm. In order to become global
firm, it should start establishing manufacturing units in other markets. As KNP has their business
spreaded just over in some regions of Europe and a little in US, there is a huge scope for them to
go upwards. KNP can take some step such as : Try to enter less-developed countries whose
resources can be gained at cheaper rate, Diversify their sellers and distributors, Enhance quality,
Use Competitive Advantage, Specific Product upgrade, Strategy upgrade . As KNP spreading its
business to more in America and Asia this step help it to work efficiently.

What type of organizational arrangement does the firm use currently? If it expanded
operations into North America, what type of structure would you recommend it use? What
other organizational changes would you recommend?

Answer: In Europe KNP currently uses vertical organizational format in its Packaging Groups
and Graphic-Paper Groups. In each group internal organizational structure is horizontal.

But America’s organization culture and structure is different from Europe. So KNP should
follow different organization structure. I recommend structure for North America, a mixture of
both horizontal and vertical organizational form.

In controlling operations, on what types of performance should KNP be focusing its

attention? If the firm were to expand operations into South America and Asia, how would
this impact on the way it would need to control operations? Explain.

Answer: KNP should focus on the measurement of their performance. If the firm were to expand
operations in Asia its impact would suggest the KNP to develop its managerial ability to create
the full demand of its product in the local market and capture the market. . They should have a
pre established standard; when they fix a standard, then they will be able to compare their
performance of operating revenues and operating results.

South America and Asia is a big and complex market. They are unlike the Europeans and the
firms compete here very roughly for gaining profit and acquiring large portion of market share.
So KNP first focus on some issue, such as : Standardized their products to international quality
with full production, Manage the merchants and contacts that will be much beneficial, Know the
cultural, societal, economical and political barriers

Part-3,Case-09,Can Reliance Compete? Page-350

What strategy have the Reliance owners used to gain favorable treatment from the Indian
government? Do you think this is smart? What are the positive and the negatives?

Answer: Reliance, an Indian giant enjoyed favor of Indian Government by following a single
strategy for all of its subsidiaries, which is offering comparatively low priced products to the
nation. In a word, they have established that their business is for the welfare of people and
country. This strategy worked smartly for some of reliance’s business, but in telecom business
this became one of the major challenges for them.

No. I don’t think it smart. Because in long run, they will compete with national and international
competitors. So subsidiary will not help them and they can’t exists in telecom though
government help them.

Positive slides are :

I. Getting Government’s favor.

II. Having positive impression to people.
III. Declining import dependency.
IV. Better impact in the long-run

Negative slides are :

I. Not possible to imply in all types of businesses.

II. Require government subsidy.
III. Difficult to run the business in short-run.

Do you think Reliance can compete against outside MNCs who do business in India? Do
you agree with analysts who say Reliance will find the telecom business hard going?
Answer: Reliance is now having growth in business in their domestic country by governmental
support . But in case of competing MNCs, who are more performance oriented, it would face
difficulties. Reliance might face trouble dealing with MNC’s operating in India. Because
Reliance’s strength is they eliminate competitors from popping up in the market. But the
MNC’s usually has a strong financial background, so eliminating them will not be easy.

I agree with the analysts that Reliance will find hard competition in telecom business. As
there is more scope in this market, many well equipped MNCs will be interested to enter this
market. MNC’s will go for much more strategic move to grab this market and to become a
leading one on the market of such huge consumers. Compete with MNC like Hutchison and
SingTel will be hard for reliance to survive in market with growth.

Part-3, Case-10, The HP- Compaq Merger and Its Global

Implications Page-352

1. Do you believe the new HP has communicated its combined offering effectively in its
international markets? What else needs to be done?

Answer: No. HP has not communicated its combined offering effectively in its international
markets as a result profit is decreasing extensively more than forecasted. HP should focus on the
combined strength of the two companies. Both of HP and Compaq’s main target market is the
corporate houses, medium and small businesses, but they didn’t combined effectively.

They can move more to serve their clients as smoothly as they can as it will bring more of
customers and they already got an advantage by cutting operating cost. They must not lose the
software and PC market to their competitors. They should improved their technology, effective
marketing strategy, strong contact and should promote service after sell.
2. What are some of the entry and organizational challenges that HP faces?

Answer: The merged HP-Compaq flourisher after two-three years of their business. Although
there is a long way to go to be a successful merger but they have done quite well. But they had
and still facing startup and operational problems and obstacles.

Entry challenges:

 Raised doubt about the ability to seamlessly integrate the two companies.
 Resellers have different opinion, all of them are not positive.
 HP would not be in a suitable position to raise the prices.

Organizational Challenges:

 The new HP will have to make new product mix for each region.
 Integrating two large organizations is much complicated and challenging.
 Different geographical market segment in Asia-pacific region.

What will be the impact of the EU’s single monetary union on HP in Europe? What are the
pros? The cons?

Answer: The impact of single monetary on HP in EU’s is vital for its growth in Europe. Single
money will help them to do business in fast and easily in Europe.

Hp’s pros for single money are :

 It will increase sale as single currency can determine the value for entire Europe.

 Exchange rates will have less significant effects inside Europe.

 Market demand can be analyzed focusing on single currency for the whole EU.

Single monetary union on HP in EU’s cons are:

 It’s a matter of time people gets used to a single currency.

 Evaluation of other national currencies against the common money will be confusing.
Should HP move to a direct-selling model to battle Dell overseas? Why or why not?

Answer: Yes. Though Hp has a strong brand entity in E-commerce, but now they are involving
more in stores and service centers and they have reputation in e-business, which help them to get
more good position in battle with Dell. The Stores may provide a high return for HP.

But Hp also analyze market and make policy for growth in the market and should know about
Dell strategy in business.

What has HP done to respond to soft consumer spending worldwide? Do you believe the
HP stores will be effective in generating new business?

Answer: Because of the firm’s current vulnerable position to self spending consumer market, the
firm should take some long term steps to capture the consumers of the Asia pacific rather than
take any short term steps but has. I-community is a special side of HP. It is a strategic move for
improving the business for the long term as well as to serve the community on the IT side. I-
Community uses public and private partnership to boost economic development through
technology.

Yes, Hp stores will be effective, because it’ll make the sales and the promotion easier. It is very
important to deliver appropriate product mix in the different region according to the demand.
This stores helps to generate more profit.

How much of an impact do you feel HP’s i-communities will have on the company’s future
sales? Do you think this form of international corporate social responsibility will contribute
to the bottom line? Explain.

Answer: HP’s I-communities will have a very positive impact on future sales. I-Community uses
public and private partnership to boost economic development through technology. It
collaborates government and community based organizations to expand the IT sector for the
improvement and expansion of the community. This form of international corporate social
responsibility will increase the potential of the society to utilize the benefits of information
technology. So as the world of business goes up and up , the higher the responsibility goes on
and it should be committed.

In your opinion, what are the three best things Carly Fiorina has been able to accomplish
by merging HP and Compaq?
Answer: The best three things that Carly Fiorina has been able to accomplish by merging HP
and Compaq are mentioned as follows-

 Become the most strong IT firm for corporate consumers.

 Long term strategy development for capturing the consumer market and increase revenue
from the consumer market.
 Entering and capturing strong market share in the Asia-pacific region and in the Europe.

Part-3, Case-11,Can the Budget Airline Model Succeed in Asia

The Story of Air Asia Page-358

What opportunities exist in the Asia-Pacific region for the entrance of new low-fare
airlines? How might demand for low-fare service differ in the Asia-Pacific region and in
North America and Europe?

Answer: The Asia-Pacific region offers many opportunities for the entrance of new low-fare
airlines. The opportunities exist in the Asia-Pacific region for the entrance of new low-fare
airlines are:

1. The high local demand.

2. The large area of land to place low-fare airlines
3. Weakening of the regulations which impeded connection between nations.
4. New and more industries are emerging in the region.
5. Increasing cross cultural business.
6. The high maintenance facilities.
7. Huge population.

Do governments pose a significant obstacle to the expansion of low-fare airlines in Asia?

Answer: Yes, governments do pose a significant obstacle to the expansion of low-fare airlines
in Asia. Governments are indifferent in setting up bilateral agreements for trade and business; as
a result growth of low fare airline faces risks and hassles. The manipulation of the government
by competing airlines can limit the growth for alternative airlines to offer service to Asia-Pacific
regions, leading Asia to have few choices amongst air carriers.

Compare Air Asia’s strategy with the strategies of Southwest and Ryanair. How is it
similar to and different from strategies of those carriers?

Answer: Air Asia’s strategy southwest are similar with Ryanair on the mechanism and way of
method. Such as : Low fare strategy, Basic facilities, Easy availability.

Air Asia’s strategy is different from Southwest and Ryan air are : Penetrating intra-regional
markets, Strong focus on expansion, Aggressive advertising, Strong market stimulation via web
advertisement, Super competitive fares.

Did Tony Fernandez weigh the range of political economic and operational risks when he
took over Air Asia? What risks might he have overlooked?

Answer: Yes, Tony Fernandez weighed the range of political, economic and operational risks
when he took over Air Asia. Some aspects he overlooked is:
 The potential Asian market was very attractive for multiple competitors

 Bilateral agreements are important for air transportation service.

 If govt. impose tax and other tariff which may increase the cost
 Economical risk. If economy falls.
 Threat to entry

How would you describe Tony Fernandez’s entrepreneurial strategy?

Answer: Tony Fernandez’s entrepreneurial strategy can be said as a smart, clever and exact
time strategy and a milestone to initiate big task. Under Tony’s leadership sir Asia’s million
debts became a thriving business. He started business in almost a new market and which was
high potential area and able to provide prices in half than other LFAs.

How should Air Asia respond to the challenges posed by (a) new low-fare carriers entering
the Asian marketplace and (b) low-fare strategies pursued by incumbent carriers?
Answer: Air-Asia responded by offering super competitive fares and created a strong customer
base, selling holiday packages. For the existing carrier’s who were taking low fare strategies Air
Asia declared that they will expand domestically and regionally.

How do you think the Asian passenger air transport marketplace will stake out? What
lessons can be drawn from the North American and European experience?

Answer: Asian passenger’s air transport will shake out and will get restructured. The more intra-
regional contracts and softening the government regulations will boost up the demand of low fare
air transport. These outcomes could be drawn from the North American and European
operations:

 Once regulations starts to get loose potentiality for growth increases.

 Higher travels in air-transportation create higher demands for Hotels.
 Travelers try to mix business with pleasure by bringing people close to them to
accompany them.

Part-4, Case-12, A Copy Shop Goes Global Page-509

What are some of the general challenges of starting new business in another country? What
specific challenges did Copy General face in Eastern and Central Europe?

Answer: : If anyone want to do business outside border must face some obstacles because of
various factors related to individual, time and places. So, some general challenges that can be
faced by a foreign company may be :

1. Language barriers
 2. Cultural diversity
3. Ethical problems and concerns
4. Political and economical conditions
5. Methods of doing business
6. Strategy formulation and implementation
7. Labor relation and industrial democracy
8. Adaptations to new trend and technology

Copy General, as a new company in foreign country also faced some challenges in Eastern and
Central Europe. Some of these are:

a) Language difference which caused much problems during negotiation

b) As Budapest was new place for them, they faced difficulties in choosing location
for their shop
c) Accommodation problem for the employees of Copy General
d) Distrust of banks towards new business
e) Difficulty in searching for supplier

How important was Paul Panitz’s vision to the decision to go into Hungary? How would
you characterize his leadership and management style and his commitment to “doing well
by doing good”?

Answer: Paul Panitz wanted to establish copy shop in Central and Eastern Europe to help the
people of that area, his vision was to make people access to information. It was a very important
decision as the country had very few copy centers available and people were not accessed to the
recent information. So he first decided to go for Hungary.

His leadership style was somewhat a mixture of participative and democratic style. We can
observe subordinate-leader relationship and decision making authority was participating rather
than autocratic. And Paul’s goal was specific which was followed by his subordinates that give a
view of democracy.

Compare the recollections of Ken Chaletsky, a U.S. manager with Copy General, and Erno
Duda, Copy General’s initial country manager in Hungary. How do their perspectives
differ, and how do they reflect the cultural values of their respective countries?

Answer: Comparing the recollection of Ken Chaletsky and Erno Duda, it is obvious that the
business mind, thought of Ken Chaletsky U.S was much more realistic and innovative than Erno
Duda. Erno Duda, who firstly was the interpreter of Paul Panitz, became involved with Copy
General.
Their perspective digger in assuming future, innovation, risk taking, entrepreneurship.
The Hungarian Erno Duda was a much concerned only of his country and culture but the US.
Ken Chaletsky was not helpful about the business ideas of Paul. But as a good friend of his, he
signed on to with him.

What lessons (if any) can you derive from Copy General’s successful experience in Eastern
Europe and beyond?

Answer: From Copy general’s successful experience in eastern Europe and beyond, we can derive that
To gain success in international business, administrator must have knowledge about host
country, strong leadership, analytical ability, forecasting power and mentality to face hard
challenges.

Part-4, Case-13, The Road to Hell Page-512

What mistakes did John Baker make? Why did he not realize this mistake when it
occurred?

Answer: John Baker was the expert of staffing and manager of human resources of Continental
Ore, he did a huge mistake in understanding -Mathew Rennalls. John Baker thought of to solve
the racial consciousness of Renalls by discussing the fact directly with him. As European people
are straight forward and discuss every problem directly, Baker also did the same. But Renalls
took it wrongly and thought that he was unestimated. He did not distinguish between his and
Rennalls cultural sensitivity

What would you recommend that Baker do now? Explain.

Answer: I would recommend John Baker, first he should find what are cause Or words that
misinterpreted by Renalls, then arrange a discussion between them to remove misunderstanding
between them and must follow and respect Caribbean culture.
What does this case illustrate about human resource management in the international
environment? Be complete in your answer.

Answer: This is a crucial case illustrating how staffs react to the overseas superiors’ behavior
which is a mirror view of cultural difference through nations. There was a conflict between
Canadian and Caribbean cultural responsiveness which the manager could not identify. In the
international environment, the process of human resource management differs from one country
to another country. Motivational factor to an employee of a country may hurt the sentiment of
the employee of another country.

Part-4, Case-14, Lord John Browne and BP’s Global Shift

Page-515

Discuss John Browne’s leadership style. How would you characterize his approach to
global management?

Answer: John Browne’s leadership style is very clear by his comment “To deliver the
continuous improvement in the performance and profitability that is our fundamental goal, we
have to show we are part of the process of sustainable development, beneficial to all ”. In
leadership he presented BP as an innovative and progressive and promote the improvement in
performance and increase profitability and he is aimed to take all sort of essential measures to do
so.
John Browne led in participative style. He encouraged his people to play an active role in
assuming control of their work and authority usually remained highly decentralized. The first
important step under Browne’s leadership was the elimination of the oil shield logo. Replacing
the stuffy insignia with the fresh sunburst logo signaled a change to consumers.
Other successful steps taken by him is finding more reserves, acquisitions, expansion to Russia,
new corporate logo and sign, concentration on environmental and social issue.
How much of an impact do you think BP’s marketing efforts will have on shareholder
value?

Answer: BP’s marketing efforts will have a significant impact on the shareholders value. As it
is moving to brand itself as a environment friendly green corporation, it has gained a significant
market share in related sectors except natural resources like renewable energy sources-
hydrogen, wind and solar. This increase BP’s position. BP’s marketing effort convinced BP’s
shareholders as their portfolio had increased and also they get higher return from their
investment.

From the above information we might have got some information which indicates the expansion
of BP’s business and most of the expansions generally guarantee the increase in the
shareholders’ value

Discuss the pros and cons of BP’s strategy in Russia,both short term and long term. What
challenges has BP faced in its effort to became a major player in Russia.

Answer: BP’s strategy in Russia short term pros are : Addition to reserve fund, More reserve,
Secured real assets and real cash flow, huge revenue and growing reserve it is providing good
dividend to the shareholders in the short terms.

Bp’s strategy short term cons are : Bp’s strategy’s cons are : Tough action of TNK, Margin and
returns lower than expected, Selling of mature assets.

Long term strategy pros are : Close the door to other European peers, Exporting opportunity to
Asia and EU

Bp’s long term strategy cons is it could loss all the assets in Russia.

Do you think Browne’s initial plan to back the U.S government’s proposal to open up the
Arctic National Wildlife Refuge in Alaska was a mistake? if so, why?

Answer : Brown's initial plan to back the U.S government's proposal to open up the Arctic
National Wildlife Refuge in Alaska was right because it has decided to promote green
environment which lead to a conflict between its goal and actual operation. BP rebrand company
to introduce themselves as a socially concerned company However it failed to keep its
commitment because BP was pressed to find new sources in the region.
Discuss the difficulties of simultaneously securing growth and prompting social
responsibility for oil and gas firms. What are the major challenges?

Answer: Securing growth and promoting social responsibility, at a time is actually opposite to
each other for oil and gas companies because if they want more profit. The main challenge for
those companies is to main a good balance between two tasks. If they want to be socially and
environmentally responsible, then exploration for new resources may create bad image for the
company. Major challenges are : Conflict between company’s growth effort and CSR works,
keep balance between growth and social responsibility, Drop of reputation, shareholders distrust,
Lawsuit by environmental concerned organization, fall of share price.

Given BP’s huge commitment to rebranding itself as ‘’socially responsible’’ do you think
customers will believe this message from a company that, by nature contributes to
environmental pollution?what other relationship could BP develop that would be more
credible?

Answer: It is difficult to make customer believe that company like BP which is related to
environment pollution is socially responsible organization. But BP’s works towards ‘’socially
responsible’’ marketing effort like renewable energy source, cut green house gas emission would
help to support to prove themselves socially responsible.

Do you view corporate social responsibility initiatives as a barrier to entry for new oil and
gas concerns? Explains.

Answer : Yes, corporate social responsibility initiatives is a huge barrier to entry for new oil
and gas concerns. Csr doesn’t act direct barrier but it is a hidden barrier to entry for new oil and
gas concerns.

Part-4, Case-15, Chiquita’s Global Turnaround

Page-521
How would you characterize Chiquita’s historic approach to global management?

Answer:

Chiquita Brands international inc. is known as a producer and multinational marketer of banana
and other fresh food. It had lead in fruit business and strong passion but last few years it’s social,
moral and corporate image is not good. They tempted ill-fed station to their workers in
Guatemala, Honduras, Costa Rica, Panama and Columbia. Before 2004, Chiquita held a
reputation as cold, uncaring and indifferent, frustrated with mediocre returns, a lack of
innovation and a demoralized workforce. Throughout the last 20 th century hostile relationships
with its labor unions and employees and a reputation for immorality solidified by the actions of
its predecessor company, United Fruit, helped to slow Chiquita’s growth. In November 2001, it
seek 11 bankruptcy protections. It was also allegation for the company’s participation in labor
rights suppression in Colombia in the 1920s and Involvement of bribery scandal in Honduras in
1975, in the 1980s and 1990s. A cold, uncaring and indifferent approach towards business
dealings, frustration towards mediocre returns , lack of innovation and a demoralized workforce
along with its hostile labor union and employee relationship and a reputation for immoral
solidified by the action of its predecessor companies made an adverse effect in international
management of Chiquita.

Describe Chiquita’s approach to human resource management in its global supply chain.
What particular human resources does Chiquita face as the purchaser, producer, and
supplier of a commodity?

Answer: Chiquita’s had a good global supply chain management system. It targeted the poor
people from Guatemala, Honduras, Costa Rica, Panama and Columbia as they won’t demand
more for wage. That help them to cut the loss they may invest for wages. They founded
industries in different countries that helped them for recruiting more people.
The particular human resource challenges are using child for operating business, barriers by EU
that increases cost, captured by competitors for EU’s barriers. Traditionally relations between
Chiquita and labor unions in Latin America were mired in conflict and mistrust

Does Chiquita’s global corporate responsibility (CR) program create a conflict between
shareholders and other stakeholders? Who are Chiquita’s main stakeholders in the United
States and around the world and how are they affected by Chiquita’s CR program?
Answer: No, Chiquita’s global corporate responsibility (CR) program does create a conflict
between shareholders and other stakeholders and a negative effect on both of its shareholders and
their stakeholders.

Chiquita’s main stakeholders are- shareholders, labor unions, media, creditors, external and
internal auditors, European Union and many others.

The stakeholders specially the employees, debtors and other stakeholders became negative for
the violation in the company’s main purpose, goals and HR factors. CR responsibility has also
posed a negative impact on stakeholders. The main Stakeholders of Chiquita’s are Employees
and other creditors who gave loans to Chiquita.

How would you characterize Chiquita’s past and present leadership? How does leadership
affect a company’s overall reputation?

Answer: In past the company’s leadership was full of faults and vague. It lacks all the good
leadership qualities. The company’s total reputation was highly damaged by its leadership style.
It consists of unclarity, misleadership, and inefficient decision making, frustration towards
mediocre returns , lack of innovation and a demoralized workforce along with its hostile labor
union and employee relationship.
But now Chiquita has drastically shifted its strategic decision making models and broader
corporate operating principles and has changed its overall leadership situation. Now new
innovation, risk taking and proper decision making are the root to this new leadership style.

I think the new leadership affect will bring good luck for the company in the future; it is
attracting more investors, suppliers and other MNC’s.

Do you believe Chiquita would have changed its policies without the presence of damaging
stories in the media? If not, what does this say about Chiquita’s old management style?

Answer: No, Chiquita would not have changed its policies without the presence of damaging
stories in media. This may say that the company’s old management system was full of
ambiguity. It will tell about the treatment to the poor employees from the developing countries. It
may say about the corruption by the company.

What challenges does Chiquita’s new CEO face in continuing to turn the company around
and balance the interests of competing stakeholders?

Answer: Chiquita’s new CEO Fernando Aguirre faced a wide range of challenges to turn the
company around and balance its interests of competing stakeholders. Most important challenges
are assuring revenue, changing it’s inappropriate operational structure, achieving goodwill,
reconstructing the brand old company, changing the old thought about the company by the
people and others and making the labor relation in an international standard,