Home-Based Companies Are Slowly Shifting Their Business Essay
- Length: 12 pages
- Sources: 13
- Subject: Business
- Type: Essay
- Paper: #35239455
Excerpt from Essay :
home-based companies are slowly shifting their business operations to foreign companies to ensure they have an impact in the global business world. Given the current modern changes in international business developments, the number of expatriates is increasing for both long-term and short-term durations. For these organizations, sending employees overseas is an opportunity undertaken to improve business activities but without the right preparation, it is a challenging initiative to any organization. In this regard, companies are constantly training employees on international work issues to ensure their success in the global marketplace (Kontrimas, 2006). However, businesses face several challenges relating to hiring employees for their American-based business or expatriating employees to work in remote facilities, open new plants, and work with international clientele. As is the case H2O, mentoring future corporate leaders to successfully manage operations on a worldwide scale is a welcome step to ensure their operations are not limited to Germany alone. Moreover, to accomplish this, the firm should understand issues relating to sending home country employees to work in America; legal, compensation as well as cultural issues before expatriating the workers.
Sending Home Country Employees to Work in the U.S.
Sending local employees to work in the U.S. is both time and capital intensive for organizations based outside the American continent. Companies spend thousands of dollars in preparing expats and ensuring their full integration into the U.S. labor force (Ajami & Goddard, 2006). However, some companies in the domestic markets have some essential attributes which assist them get into the international markets with minimal difficulties. In addition, sending employees overseas may be challenging to companies due to the expenses incurred since expatriates lack contacts and knowledge regarding local customs and business practices compared to locals. For H2O, before expatriating workers to the United States, there are several factors that should be considered.
The first consideration that H2O should give priority is language. The firm should be aware of languages spoken in their target country; USA. Regarding this, the firm should research whether American language is related to German in any perspective and if not; the company should hire an interpreter who will induct the employees on the language spoken by the host country. In addition, before sending the employees to America, H2O should train the employees and ensure they are able to communicate in a language citizens in the foreign country understand and often use in their daily activities (Walker, Walker, & Schmitz, 2003). However, there are numerous language nuances and some words may not be easily translated thus, language should be a concern to H2O prior to sending German nationals to work in U.S..
The succeeding factor to consider is regarding the person to send to work overseas on behalf of the company. Sending shy workers may result in ruining of business activities. Shy workers are not able to hold discussions for long and may place the business in a hard place. On the other hand, brasher employees are always reluctant to move away from home and familiarity. In this regard, the business should consider expatriating individuals with overseas experience. This is essential since such individuals have prior experiences in working in foreign countries are able to integrate into the American culture without much difficulties. Besides, these individuals seize such opportunities to extend professional value to their new teams and are able to share new experiences and knowledge upon their return.
The next issue that needs to be of concern to H2O is the foreign country's culture. In this regard, several organizations fail to make impacts in international markets since they do not understand the local culture concerning the ways they are supposed to conduct business activities. In some Western countries a handshake shows courtesy and such a simple factor easily disregarded by some individuals may be a determining factor of the future of the business. Besides, sending female employees to conduct business activities like contract negotiation is likely to result in failure of the contract just from the discussion. Therefore, before H2O sends home country nationals to work in U.S., the firm should ensure the expats undergo basic training regarding the culture of the host nation to avoid chances of culture shocks and social misfortunes. In addition, the expatriates should learn about the religion of the foreign country. According to this, the firms should make the employees being sent to the U.S. On the religious beliefs and practices upheld by most American citizens since religion plays a big role concerning where discussions are being held. It is thus advisable to initiate lessons regarding local customs and practices before sending the employees abroad to undertake international activities.
Before setting in America, the company should initiate close knit diplomatic ties with the host nation; U.S.. Ensuring the firm has diplomatic relations with America will help the employees conduct their activities without undergoing stringent scrutiny. In addition, the diplomatic ties are indicators of strongly laid out and stipulated agreements essential for doing business. These accords outline regulations concerning taxation, trade limitations as well as insurances among others. In addition, having a diplomatic understanding with the country is essential as it provides the home country employees with contacts who will help the expats understand their host country. Besides, the contacts will help in making introductions and arranging meetings with governmental executives, business as well as other regulatory authorities who will be monitoring the expats activities for the duration of their stay in the country. Therefore, it is necessary for H2O to understand the impact of set government regulations on their business activities for the time the expats will be staying in America. Moreover, having diplomatic relations with the U.S. will help safeguard the firm's intellectual property, trademarks and copyrights from potential infringements.
The subsequent consideration the company should consider before sending employees to the U.S. is American financial system. According to American financial authorities, immigrants are required to have a company registration number before they can be issued with business taxation numbers. Once issued with the tax identification number, the business owners are able to open their respective bank accounts. In addition, prior to moving business operation into the United States of America, it is essential the firm determines pricing strategy of inter-company transfer of services and products (Paik & Charles, 2011). Besides, H2O should take into consideration the issues relating to human resource functioning; the American system is quite different from the German thus, they should fully understand how the American system operates. In this setting, the company should give priority in learning the American human resource issues concerning employments, benefits, labor, terminations, unions, pension, social insurance as well as compensation. Additionally, the firm should draw an offer letter outlining the products and services they will be providing and is a reminder to employees it is employment at will. Once in the U.S., the firm is obliged to offer all the employees with documents showing the work terms and conditions and their employment details as well.
The final initiate the company is required to undertake is understand American regulations as well the regulatory bodies. Prior to setting premises in America, the firm is supposed to research if there are possible environmental regulations likely to impact their business operations. In this regard, the company is required to consider regulations as well as restrictions concerning opening a manufacturing facility, restrictions regarding wastes disposal. For H2O, compliance with American local regulations is likely to add more weight on the expatriation cost that was initially planned. In addition, once the firm starts operations in America, they will be obliged to insure their employees as well as the business. Besides, prior to building new business premises, the above regulations among others must be met and the American regulatory authorities must certify the process.
Compensation of employees is an important factor employers should consider before expatriating workers to overseas countries; it is essential companies give employees an attractive compensation package. Therefore, H2O is required to compensate its expatriates for several reasons as highlighted below.
First, having a compensation package for expatriates makes it possible for the company to attract potential job applications for required positions for the duration the firm will be conducting operations in America. In this regard, compensating employees ensures they remain contented working for the company thus helping the firm remain internally impartial and maintain external competitive edge in the market thus, helping the firm attract and retain qualified employees (Brock, Shenkar, Shoham, & Siscovick, 2008). Moreover, compensation packages stimulate employees. In this case, rewarding employees for consistent performances essential in promoting business success makes them work harder thus increasing business efficiency and productivity.
The next reason for issuing employees with compensation packages is to ensure the firm optimizes the total wage level. Since the planned assignment in America is taking more than two years, the expatriates will have to undergo several trainings in the learning business activities of the host and initiate business tasks likely to bring about increased profit for the company and the longer the stay…