Business the Company's Objective Is to Develop Case Study
- Length: 12 pages
- Sources: 10
- Subject: Business
- Type: Case Study
- Paper: #80187342
Excerpt from Case Study :
The company's objective is to develop capabilities in the Research and Development areas as well as ensuing products that can be sold and distributed in the European and American markets. It should be noted, however, that such a move must be taken with caution and care; approaching the European business marketplace may not work in the same manner as other business environments. As one expert recently wrote "approaching the European markets without recognizing the importance of national languages and cultures in daily life is a crucial mistake" (Robert, 2010, pg. 31). It would be wise for the company to remember Robert's words due to the unique nature of the European markets and Germany in particular; since that is the country this paper recommends the company conducts its business.
It is important to note that choosing a country to base the company's operations is a delicate and time-consuming matter that must be conducted with care and scrutiny. With that thought in mind, it is recommended that the country of Germany continue to be the country with which the company does business. The company's relationship with the German partner must be strengthened and will bear fruit if a number of items are kept in mind. For instance; Germans are very private individuals, and are apt to keep business partners at an arm's length when it comes to their personal lives. German's are also strict adherents to regulations and structures, hence; when the company is negotiating contracts and agreements with German companies, it is necessary to keep strictly to business and business guidelines. A discussion on the general cultural differences follows this recommendation.
There are plenty of differences between the methods and manners that the company conducts business and the manner in which the Germans conduct business. Most Asians understand the art of manipulation and the importance of gaining or losing 'face'; this art is almost totally unheard of in Germany. On the plus side, however, Germans and Asians both understand the value of a rigid structure system, with certain events taking precedence over flexibility or spontaneity. Both cultures understand that there are certain ways that business should be conducted and to deviate from those methods leads to uncertainty and disaster. Part of the reason for recommending a partnership with a German company is because (to a degree) many of their cultural oddities are the same as the company's; ie, their willingness to consider input from all employees as equally importance, and the relatively slow pace at which important decisions are made. Good business cannot be rushed. However, one must note that Germans are also highly individualistic, while the Asian culture focuses much more on what is good for everyone concerned and especially on the family. The company's representatives will certainly tread softly in this area.
German Values and Beliefs
One recent article determined that "Multinational corporations (MNCs) often pursue global strategies that emphasize efficiency, flexibility, and learning, but globally developed strategies often clash with the environmental idiosyncrasies of MNC country subsidiary markets in which the strategy is actually implemented" (Grewal, Chandrashekaran, Dwyer, 2008, p. 886). What this means is that the company will need be mindful of the 'environmental idiosyncrasies' of German.
Those environmental idiosyncrasies can include almost anything imaginable but the example used by Grewal et al. might be the most succinct; it states "consumers have distinct and idiosyncratic needs; e.g., cows are viewed as holy animals in India, thereby diminishing the potential market for beef and related products" (Grewal et al., pg. 890).
If the company's main objective is to establish Research and Development teams that will be successful in developing products for consumption throughout Europe and the United States then one method of achieving this objective is to understand how the Germans view the objective and how they might be capable (and willing) to assist in this venture.
While the German culture certainly values individualism, while the Asian is more concerned with family values, there are other values that the two areas share. One of those values is that both the German and Asian people believe an ideal of 'the community good', with all parties working together to accomplishing an end that benefits all parties. This is a mindset that bodes well for collaboration and coordination.
A recent study found that the "German business system encourages MNC's to have a long-term, high-investment orientation" (Dickman, 2003, p. 265) which is very similar to the company's philosophy. Since the Germans look at a relationship in a long-term manner, then the company may well wish to define the exact parameters (remember the German adherence to strict structuring) of the relationship, with a focus on how exactly the relationship will work, what the objectives and goals are for the relationship, and spell out how each partner benefits and why. As the study suggests; "success will depend on head office -- foreign affiliate relations shaped by factors such as cross-border communication, trust and power distribution" (Dickman, 2003, p. 265).
The company can begin to build such trust through open and honest communication, especially at the top. This might well be undertaken through an executive level person since Germans respond favorably to professional rank, status, education (knowledge) and expertise.
An additional reason for choosing Germany as the company's partner in this venture is because Germany has the expertise and experience as investors in other countries and will understand our goals and objectives almost as well as the company does. One recent study showed that German MNE's are major participants in the internationalization process "with huge foreign direct investments to other EU and third world countries" (Miskinis, Reinbold, 2010, p. 717). Since the most frequent definition of a successful MNE is that of an "enterprise that engages in FDI and owns value-added activities in more than one country" (Dunning, Lundan, 2008) then it would likely behoove the company to find a successful German MNE to partner with.
German politics will have some bearing on the approach the company must take in establishing a partnership with a German MNC. The good news about the German political scene is that the political actors and the voters are comfortable and are used to working within coalition groups. A number of recent analysis and studies of Germany politics found that party politics were (and they continue to be) strongly influenced by the wake of unification, the different degrees of quality of life in Western and Eastern Germany, the effects of the crisis of the welfare state and all the reforms and attempted to reforms (Debus, 2009, Padgett, 2005).
This is especially true even today when the five-party system shows a coalition between the two strongest parties -- CDU and FDP -- with the Christian Democrat Union holding the strongest cards and most seats, and the Free Democrat Party losing much of its appeal and base to the other three smaller parties.
However, the politics notwithstanding, once again, the German people show a remarkable tolerance for coalition and collaboration even among the political parties. As one expert states "cooperation appears to be a quite natural strategy because in these systems a compromise between many different actors is required to change the status quo anyway" (Zohlnhofer, 2007, p. 1121). This tolerance is a good sign for the company, since it displays a willingness to solve problems and address issues that might make other countries less advantageous to work with than Germany.
A word of caution is set forth here on the political front; a 2007 study showed that Germany's economy has been growing much more slowly than Great Britain, France or even the average of the other members of the European Union and that the main reason for the slowdown "has more to do with shortcomings in political rather than in economic decision making…In 1990, East and West Germany were reunited after being split apart at the end of World War 11 (and) the integration (including the necessary modernization) of the East German economy has been a continuous and costly long-term process" (Weidenbaum, 2007, p. 25). Many citizens, especially the ones in East Germany, have felt that the process and its resulting problems have been exacerbated by the lack of political control. The recession has also taken its toll on the Germany economy (as it has on the rest of the world as well) and civil unrest and dissension is percolating.
A number of politicians have ceased on the unrest and disgruntlement as a platform to promote their ideals and ideas, but so far the two strongest parties have maintained control while things have quieted down. It is hoped, therefore, that German politics will have little if any influence on the proposed partnership.
The technological conditions found in German business society are second to none in Europe. Before an attempt is made to discern the advantage of German technology, however, one must first address the Globalization Paradox. The Globalization Paradox was recently described as addressing the ambivalence of newly emerged creative milieus and their territorial…