ASSIGNMENT CODE: 9539 DATE OF COMPLETION: 10 JULY 2012 WORDS: 1849

Table of Contents
International Management ........................................................................................................................ 1 Executive Summary .................................................................................................................................... 1 Overview of the situation............................................................................................................................ 1 Analysis of the situation.............................................................................................................................. 2 Solutions and recommendations ................................................................................................................ 4 Forecasts and outcomes .............................................................................................................................. 4 Conclusion ................................................................................................................................................... 5 References .................................................................................................................................................... 6

International Management Executive Summary

XYZ Pvt. Ltd. Is a UK based cloth manufacturing company. This well established company was founded in the year 2005. Due to the recent trend in the market, the company wants to expand its business globally. In this context, it is facing some cultural conflicts and is not very much aware about such conflicts. The organization wants to deal better in the international market, with the help of its new strategies (Johnson and Turner, 2009). The main objective of the business plan is to enhance development of the business. The firm manufactures cloths for all age groups i.e. children, teenagers, infants as well as elders, but it is unaware about the requirements of customers in overseas markets. We are a consultancy corporation, which help sole proprietors and organizations in dealing with their problems and troubles related to business. The issues might be in connection to domestic or international. Our client is a XYZ Pvt. Ltd., deals in the cloth manufacturing business. The company needs advice from our consultancy for their business expansion plan to the international level. It requires our help to understand cultures which are followed in varied nations. They are unaware about that, what types of cultural conflicts can be faced by them in the process of business expansion to the worldwide market.

Overview of the situation

Largest part of the global business is carried out by big MNCs and they are under the heavy conflicting pressures of the stakeholders. Some of these pressures are discussed below: Pressure to satisfy different demand of their consumers, based on diverse lifestyles as well as environmental factors and to meet these demands from the same kind of product or service. Pressure to fulfill the shareholder expectations regarding return on investment and want them to be prudent investors. In addition to this, successfully handling of risk connected with their various activities. Stress to do effective planning for the financial management together with tax planning. One more serious pressure on the company is to compete in diverse markets.

An assessment of several pressures on key players in the worldwide business shows the requirements of laying down clear guidelines, in the structure of code of ethics for their workforce. Before undertaking the cultural factors, the geographical environment of the country where business is decided to expand should be kept in mind. Geographical factor of the particular area is very important to be consider, especially when the company deals in the clothing business. It refers to the countrys natural resources, climate, topography and people. Every corporation who deals in the global business should contain knowledge regarding geographic constraints of the overseas countries, as it influences the nature or behavior of the society. Further, it also manipulates the demand pattern of the inhabitants living in that nation. Geography is the most important contributing part into the development of business, routes along with the trade centers. Different types of climatic conditions such as wind, temperature, snowfall, rain, humidity etc. prevailing in dissimilar segments, gives rise in the demands for different products or services. It is generally due to the reason of climatic differences, which makes people diverse in needs for housing, food, clothing, medicine as well as recreational activities. For this reason, before planning to establish cloth manufacturing plant in different countries, the company should keep in mind the geographical conditions of the particular area. After analyzing all these factors, the next which is to be considered is cultural issues.

Analysis of the situation

Since every company must know the cultural differences among various countries, so it is very essential to be kept in mind the Socio Cultural environment. Business is an economic activity, but side by side it is as much a cultural phenomenon. It might be possible that per capita income of two countries are same, however their consumption patterns may differ. Cultural forces have significant impact on the type of product prefer by the people; its colors, designs as well as symbols they like; importance they place on work, religion, entertainment, social relation along with the family and their dressing sense (Adekola and Sergi, 2007). The cultural background of particular nation affects all characteristics of human behavior along with their persistent in all facets of business procedure. An ethical analysis model has been suggested by Hosmer. This model provides support in identifying the cultural issues and international manager dilemmas (Heizmann, 2007).
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The term Culture can be defined as a sum total of individuals beliefs, knowledge, art, morals, customs, and laws as well as any other kind of habits or capabilities possessed by man as a part of society. It is typical way of the people life and also their complete design of livelihood. Thus, culture is refer to the entire social heritage of a man, distinct pattern of the society along with its total value system, which is ultimately connected to the consumption styles of the people, philosophies of the management and their practices. In addition to this, there are many sub cultures inculcates in each culture that can influence the business. For example, in a nation like USA there are different types of sub culture prevails in the north eastern on mid western parts as well as in the southern part. Sub cultures are found in all the countrys culture (Cultural Diversity, 2000). The manager, who fails to design goods ignoring this factor, may produce same product for all divisions, which does not exist in reality. It is not necessarily that single political and national boundary always have entities with similar culture. Elements of the culture can be easily understood by undertaking PEST analysis: 1. Political analysis It includes studying the structure of the government whether it is democratic, autocratic or monarchy. Is their federal or centralized structure is prevailing. The government is stable or unstable. These all create barriers in the establishment of business, so it is essential to be analyzed. 2. Economical analysis Before beginning with the business in any other country, it is also very important to consider, whether their legislation has any rule regarding EXIM policy. In addition to this, it is necessary to find out that FDI regulations. The company should also analyze foreign exchange reserves, in order to understand the financial position of the countrys economy. 3. Social analysis It helps in identifying how people organize their activities as well as relate to one another. The role of men and women in the culture, size of the family and position of dissimilar social classes varied from country to country. 4. Technological analysis It is consist of the methods applied in the process of making goods. It is technical know-how available with each people in the society. Selection of technology has its impact on the size of investment, type of factors to be employed as well as on the scale of operations. Transfer of technology has been a big controversial issue. Several countries have laid down rules and regulations regarding imports of technology. Further, the developed nations

along with MNCs have their individual policies in context of nature of techniques to be transferred and the governing conditions of the transfers.

Solutions and recommendations

The individual, who deals with different culture people, must know the differences in the nature and number of stages presented in negotiations of business. Further, they should also recognize the formalities in final contracts of business. There are certain beliefs of Ethical system like Universal theory, distributive justice, utilitarian theory and eternal laws (Trevino, 1986). In this Universal theory derives that standards are derived from the objective of the decision on the basis of universal principle. The issue in this approach takes place from the universality concept (Grand Mistery, 2011). Utilitarian theory reveals that perceived results of the actions supplies standards. It is normative ethical theory which places the locus of right or wrong exclusively on the consequences of selecting one action over other (Utilitarian Theories, 1996). The next is Eternal laws; it is the spiritual teachings, which exposes moral standards. These standards are the eternal laws which we should follow (Eternal Laws, n.d). One more is distributive justice, which says that everyone should get equal benefits (Principle of Distributive Justice, n.d). The organization must take responsibility of being socially appropriate or correct and should work accordingly. Social responsibilities help the business in international markets also. These responsibilities can be scrutinized at the economic, legal, ethical as well as discretionary level. According to the economical responsibility, the organization has to produce goods which are needed by the society and sell them at the reasonable profits. In the context of legal responsibility the company should act within the law and regulations boundaries. Socially responsible corporations are every time looking for new or creative ways to serve their stakeholders. This responsibility can be fulfill by the managers with their employees by doing volunteer work for the health care centres, hospitals or involving in the other welfare activities (Social Responsibilities of Managers, 2008).

Forecasts and outcomes

Here is an example for our client, for understanding them clearly about the international culture along with the attitude. A production manager had been sent to foreign country and was convinced that he could be able to motivate employees for higher productivity by introducing a
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democratic decision making pattern. He got trainers form the home office, in order to teach the supervisors that how to seek feedbacks or decisions from the workforce. Soon after the introduction of new management styles, the staffs began leaving their jobs. When they were asked to provide reason, the answer came that the new production manager dont know what to do and thats why he is asking for our suggestions. Obviously, the organization would not be continuing for long with this type of management style and staffs. Hence, wanted to give up before the collapse, because if it not done, then everybody would be chasing for a job at the single time.

Conclusion
On the basis of results, suggestion and recommendation has been given, which will be helpful for the XYZ Company in making profits by satisfying demands of the people as well.

References
Adekola, A. and Sergi, S. B., 2007. Global Business Management: A Cross-Cultural Perspective. Ashgate Publishing, Ltd. Cultural Diversity. 2000. [Online]. Available at:

<http://www.cliffsnotes.com/study_guide/Cultural-Diversity.topicArticleId26957,articleId-26854.html>. [Accessed on 10 July 2012]. Eternal Laws, n.d. The Eternal Laws. [Online]. Available at: <http://www.eternal-laws.com/>. [Accessed on 10 July 2012]. Grand Mistrey, 2011. [Online]. Available at: <http://universaltheory.bandcamp.com/>. [Accessed on 10 July 2012]. Heizmann, S., 2007. Ethical Dilemma. [Online]. Available at: <http://quizlet.com/74628/ethicshosmer-ch-2-vocab-flash-cards/>. [Accessed on 10 July 2012]. Johnson, D. and Turner, C., 2009. International Business: Themes and Issues in the Modern Global Economy. 2nd ed. Taylor & Francis. Principle of Distributive Justice. n.d. [Online]. Available at:

<http://www.ascensionhealth.org/index.php?option=com_content&view=article&id=80:p rinciple-of-distributive-justice&Itemid=171>. [Accessed on 10 July 2012]. Social Responsibilities of Managers. 2008. [Online]. Available at:

<http://www.managementstudyguide.com/social-responsibilities-managers.htm>. [Accessed on 10 July 2102]. Trevino, K. L., 1986. Ethical Decision Making in Organizations: A Person-Situation Interactionist Model. The Academy of Management Review, 11 (3), pp.601-617. Utilitarian Theories. 1996. [Online]. Available at:

<http://caae.phil.cmu.edu/cavalier/80130/part2/sect9.html>. [Accessed on 10 July 2012].