Global Expansion Advancement Plan

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Due to the company’s (Widgets Incorporated) recorded success in the UAE, there needs to be venture into new markets that is Bocas del Toro, Panama and Pretoria, South Africa (Big Two). This business venture will help grow the company and take it to another level. With increasing globalization, it is important for the company to grow with the currents trends. The Big Two are the best option because they provide a high market base for Widgets. The countries including UAE have varying cultural diversity. Panama records high levels of poverty while South Africa is still suffering from the effects of Apartheid rule. UAE is characterized by high potential for business evidenced by oil deposits. According to Trompenaars and Hampden-Turner research, cultural diversity affects an international business venture (Trompenaars & Hampden-Turner, 1997). Therefore, researching on cultural characteristics in the Big Two will help the company when opening up its foreign markets. 

Challenges

While venturing into new markets, the Company will face certain challenges when expanding its business opportunities. The main challenge is outdoing the existing widgets products in the Big Two. Locals in the Big Two are not aware of our products and will require a lot of effort to convince them to switch to our product. Another barrier will be the language barrier. This is because in the Big Two, none of them are Arabian speaking natives. This poses a challenge for the company when trying to market its brand to the locals. The local communities are our target groups and therefore with language barrier it becomes difficult to negotiate with them.

Communications

There are different styles of communication and they differ according to cultural origin. Communication styles are different according to high or low context culture. Managers in low context culture like Europe, are individualistic and directive and facts creates the basis for their decisions. In high context culture like some parts of the Middle East, managers are collective offering support to groups rather than concentrating on themselves only. Non-verbal communication for example eye contact can also be used as communication style (Lombardo, 2013).

The advantage of learning about the communication styles will help the company when interacting with consumers on the ground. Communication styles that are sensitive to culture are effective because consumers are able to interact with the consumers without being deemed insensitive. The Company should employ an effective communication tool that is cross cultural because it will be able to make significant impact in marketing of their product.

However, the locals might feel like the specific communication type is not in accordance with their culture or rather their culture is superior to that of UAE. This might lead to a misunderstanding which will affect negatively the whole communication process. Different styles of communication for the countries can lead to a clash. Every country may refer to their style as being superior to the other one. 

The company should conduct thorough research on the background of cultures of the Big Two to avoid such inconveniences. This will prevent a culture clash with reference to the use of a communication style. Trying to find a common ground for the communication styles will help in avoiding misunderstanding.

Negotiations

When carrying out negotiation activities, the CEO and his group should make respect to cultural differences a number one priority throughout the whole process.

Introducing a third culture that is neutral to both parties helps in finding a common base where none of the countries will feel victimized (Zieba, 2009). In cases of difficulty in culture integration, the CEO should use this method in negotiation. Understanding the other country’s cultures will be of great help during negotiation (Zieba, 2009). This will make the Big Two feel comfortable and the CEO will be able to negotiate on the product easily.

Attached is a document that explains the steps of international business negotiations that are effective with reference to the Big Two cultures. In summary, it is a combination of four steps which include; researching on the Big Two cultures, be keen on the Big Two opinions of the UAE culture, find means to decrease the gap between the cultures and finally, be sensitive towards the cultures of the Big Two (Staff, 2016).

Motivation

Motivation of employees in the Big Two can be both intrinsic and extrinsic with reference to Maslow’s Hierarchy of Needs. Leaders can motivate their employees for their satisfaction whilst be influenced by external factors (Johnson, 2004). Basic needs in South Africa is access to education and proper employment to improve their socio economic status. In Bocas del Toro, the community is more concerned with decent living conditions (Richards & Bianca, 2007). By acknowledging the cultures of the Big Two countries during negotiation will give the people in this areas a sense of belonging.  

Maslow explains that people are motivated so as to gain something or needs and other needs come before others. He suggested a five stage model which can be broken down into physiological needs, safety needs, esteem needs, self-actualization and belongingness and love needs (Maslow, 1943).

Leadership

Philosophical foundation go hand in hand with the ‘Douglas McGregor’s Theories X and Y.’ Philosophical foundation finds itself entangled with leadership styles. Leadership styles can be described as to how the managers treats his or her workers and can have paternalistic, participate or authoritarian styles (Course Hero, 2013). The leadership style in UAE is characterized by paternalism and directive styles. Employees are supposed to follow instructions to the latter. From an outside perspective, it is seen as undermining employees (Katz, 2014). In Panama, the leadership is kind of paternalistic with employers following up on their employees. In South Africa, decision making is left for a group of managers who are often white (WBC, 2012). UAE leadership style does not offer motivation to employees. As compared to Panama methods of leadership which encourages the employees. The one in South Africa is kind of discriminatory to the employees especially the black race.

According to ‘Douglas McGregor’s Theories X and Y,’ Theory X is the authoritarian while Theory Y is participative. Managers’ behaviors is influenced by their idea of what motivates the employees (McGregor, 1960). Managers in both UAE and Big Two govern their workers according to what feels right for them. By using the various leadership styles, they are influenced by their idea of good governance whether effective or not. 

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Findings and Recommendation

Through the proper channels, Widgets Incorporated will be able to venture successfully into the international market (Big Two). However, research revealed various challenges which can be overcome by the company. Communication styles across varying cultural differences is a likely challenge. The CEO has to be keen when addressing this issue during negotiation. To remedy this situation, it is advisable to find a common ground for both cultures to avoid misunderstanding. Stabilizing Widgets in the foreign market that already has the same product might pose a problem. It is the responsibility of the CEO to ensure that rapid commercialization is done to advertise the product. Commercialization is important in making the product known in the market. Another problem is that the company might not be able to fund both projects at the same time. This presents a dilemma on the part of the CEO. The company should choose one of the countries to kick off the business venture and later the other country will be considered. The best way to deal with foreign partners is by finding out more about them (background) and show respect especially to culture all through the process. Recommendations by this report will ensure the CEO makes successful negotiations deals.

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  1. Course Hero. (2013). Chapter 13: Leadership Across Cultures
  2. Johnson, M. (2004). The New Rules of Engagement: Life-Work Balance and Employee Commitment. London: Chartered Institute of Personnel and Development. 
  3. Katz, L. (2014). Doing Business in the United Arab Emirates. Washington, DC.
  4. Lombardo, J. (2013). Cross Cultural Communication
  5. Maslow, A. (1943). A Theory of Human Motivation. Psychological Review, 50(4), 370-396.
  6. McGregor, D. (1960). The Human Side of Enterprise. New York: McGraw-Hill.
  7. Richards, R., & Bianca, A. (2007). Realizing their rights? Self-Assessed Community Needs in 30 Settlements in South Africa. Economics Web Institute article.
  8. Staff, P. (2016). Overcoming Cultural Barriers in Negotiations and the Importance of Communication in International Business Deals
  9. Trompenaars, F., & Hampden-Turner, C. (1997). Riding the Waves of Culture: Understanding Diversity in Global Business. New York: McGraw-Hill.
  10. World Business Culture. (2012). Management Style.  
  11. Zieba, M. (2009). Cross Cultural Negotiation. Web. 
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