Global Business

Global Business

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Global Business

Global ventures within the business field is one of the very huge milestones a company could ever have. This is because it has several far reaching consequences that in the long run allows the company to explore new areas thereby increasing their total profits and enlarging the company globally. There are several advantages of creating manufacturing operations outside the U.S. They include but are not limited to the ones discussed below. To begin with, the labor costs are reduced drastically outside the U.S and therefore the company could spend much less for labor or the company can be able to employ more individuals at the same amount while in the U.S. It has been noted that within the U.S, laborers are protected by several unions and movements. However, this is not so in other countries and even in those that are protected by their own unions, it does not amount to the same pay provided by the U.S companies.

Next, the entrepreneur will also definitely benefit from the total cost that they will be able to spend on the rental space or a manufacturing space. This is because in the U.S rental/manufacturing space is much more expensive and thus the company spends much of their resources to counter this. With the surplus money that they will be able to obtain following the less money spent on the space, they could then invest further to the benefit of the organization or company.

The third advantage is that in several instances, taking the manufacturing operations outside the source would actually be closer to the resources needed. This will then cut or significantly reduce the total money spent on raw products that they will have used in the entire process. Several times when based in the U.S, one has to use a large amount of money to import the resources needed for the manufacture. Following expansion to stations outside, then this can be avoided much to the benefit of the company. The final benefit is that the company will improve their services to their customers drastically and therefore there will be an increase in the number of customers as well as profits on several occasions.

In as much as there are several benefits of creating manufacturing operations outside the U.S, there are several disadvantages as well. First, there may be instability of any kind within that location where the manufacturing company is located. This could be political or economic. Both these types of instability can drastically affect the production and profits of a company outside the U.S. In situations where there may be political instability of any form, there could be the destruction of the company or low returns following military involvements and states of emergencies among several factors. Economically speaking there may be instability between that country’s currency and the U.S dollar and this can also massively affect the returns obtained by the company.

Also, there may be instances of insecurity outside the U.S. This may affect the company’s produce and therefore limit the total profits obtained. Insecurity can be in terms of robberies, briberies, drug trafficking, gun trafficking among several others. While in the U.S, police have set up mechanisms to counter robbery, in other countries, this might not be the case and therefore this could easily occur and the police response could be slow as well thus limiting the arrest of the perpetrators. In other instances, the police may collude with the robbers making everything worse. In the U.S as well, there are very few instances of corruption and bribery, however in most countries outside, this may be the order of the day. This affects the company in several ways since one will be torn between difficult decision making most of the time.

Once outside the U.S one will have to employ the residents of that given location and thus that particular country, although some companies expand together with their initial employees from the U.S. Either way, one may want to increase their number of employees and thus may recruit from the inhabitants. These employees may not always be the best in behavior and may therefore use your businesses as a conduit for drug and illegal firearms trafficking. Unfortunately, this may not often be recognized by your company up to the point where there is a warrant of arrest or when you are being sued. This could lead to several unforeseen circumstances which will be greatly detrimental to the company at large.

In several instances, when an organization tries to expand its boundaries beyond more than one country, it tends to become a multicultural organization. This is because, most of the times they will have to incorporate employees with diverse cultures and thus will have to incorporate all this within their system. The main challenge therefore is often blending these individuals from different cultures to work together, placing their difference aside or being accommodative of each other’s diversities. There are several ways that have been incorporated to overcome barriers to cultural variations. To begin with is careful selection of employees. In the selection of employees, companies overseas have previously selected employees that are not ethnocentric and other bothersome characteristic. This is done by studying the interviewee’s attitude during the interview before employment and studying their responses to questions.

Next, there is the pre-departure training. Several companies have previously trained their employees, especially when moving together with them to learn the local language of that country and location. This in turn eases their adjustment within the new location and makes it easier for them to interact with the locals and the local employees if necessary. This allows them to be accommodative of the new cultures and also depicts to those inhabitants that the company is trying to adjust within the new location. Also within the training, these initial employees are trained on the geography, customs, culture and political environment that they will be transitioning to. This prepares them psychologically and also protects them from unintentional surprises.

The next strategy is training the employees together following settling and recruitment to be accommodative of their colleagues’ cultures. Specific codes of conduct can then be put in place to control and prevent disagreements that could arise due to the different cultures. This training is important in many companies because it enables the employees not only to learn from one another but also to be very accommodative of the different employees present and their cultures. Finally, incentives and guarantees can be put in place to encourage good behavior and to enhance the understanding between different employees. This will act as a positive reinforcement and will therefore allow for even better cooperation and collaboration within the work place. However, this is often incorporated as the last step since it may interfere with the employees’ self-driven motivation.

Just in Time manufacturing is a form of manufacturing strategy where materials are produced by the company only as needed. It therefore follows that the company will only produce as ordered. There are several advantages of this kind of arrangement. To begin with, the money that were previously used to produce the large amount of material can be used elsewhere to bring more profits. This thus allows the company to expand using other means and mechanisms. Next, the storage space that was previously used to store manufactured products before purchase can also be used for something else, for instance enlarging the production area or offices for the employees. The third advantage is that it reduces the total throughput time, this then increases the total potential output and enables a faster response to customers at large. Also, it allows for custom made produce to the customers, which may be highly delightful to them. Finally, the defect rates are significantly reduced leading to a minimal waste of resources and better satisfaction of the customers.

The main disadvantage of Just in time production is that it may be difficult and very expensive to implement. In several instances, it poses a huge risk to the company since it uses a large amount of the company’s resources and thus may be a very difficult venture for a given company. Another disadvantage is that the company often lacks stock to fall back on. This means that if anything should happen, for instance if customers are to drastically increase in number during a given time, then the company will most definitely lack produce to give to them and this will amount to a loss since the customers will move to a different company with ready produce.

A strategic alliance is a union between two or more companies that enables the different companies to achieve their strategic objectives partially or fully following the alliance. In several instances, neither of the companies would be able to achieve these objectives on their own and therefore this union acts as a merger to allow them to achieve their goals. The benefits linked to formation of strategic alliances include first, it allows different companies to acquire different skills from one another this then leads to the improvement of the productive capacity of a company. It also leads to the improvement of the total supply chain that a company has. Next, strategic alliances lead to the reduction of costs and risks incurred since these are equally distributed across the different companies within the union. This then reduces the losses and increases the profits of the alliance and the organization at large.

The disadvantages of a strategic alliance include sharing of treasured trade secrets. In several instances, different companies have their own secrets to success which they may not be willing to share with other companies so as to improve their stand in the market and make their produce to stand out. In alliances, trade secrets have to be exchanged and shared. This then means that one has to provide the other party with information they deemed confidential. This may ultimately lead to disagreements and when they fall out the other companies may use this trade secret making the initial company lose their uniqueness.

Another disadvantage is that it creates potential competition. In some instances, the union only works for a given amount of time after which they fall apart and when they do, they leave with secrets shared, skills borrowed and new techniques. They can thus use what they acquired while in the alliance to their individual benefit, thus both companies lose their initial originality. Technology has made the world a global village. This has made the business field to flourish in several ways. First, it has enabled several business transactions between the main company based in the U.S and the other companies located overseas. This allows for the development of both the initial company and the one located overseas. It has also enabled easier and faster communication thus improving their business opportunities. Communication has also improved transactions since it has enabled them to conduct several advertisements which are aired on different channels to the benefit of the entire company.

Two companies that have utilized outside the U.S manufacturing capabilities successfully include The Volkswagen group of company and General Motors automotive company. Those that failed in this venture include Inditex clothing company and the Boeing Company. Although these companies have not entirely failed, they are at the verge of failure secondary to offshoring as per a recent survey.