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RJR

Illustrate the difficulties of establishing and managing a subsidiary in terms of strategic ethical considerations -- not only because of differences in corporate (organizational) cultures, but also in national cultures and laws.

The United States has some of the most restrictive laws regarding cigarette taxation, use of tobacco, and advertising. The government actively campaigns against tobacco use as part of its public health education efforts. Thus it behooves RJR to sell its product abroad in less restrictive contexts, effectively encouraging other people to risk their health smoking tobacco. Often such nations are located in the developing world and target people who have less education about the damage that tobacco can do to their health.

Q2. Explain in your own words why RJR prefers to work with a local partner to establish a joint venture rather than simply acquiring a company in another country.

Given that RJR has frequently embarked upon ventures in developing world countries, using joint ventures as a point of entry is advisable given that this enables the company to better understand the national culture, government, and business regulatory system. Especially with a very personal product such as tobacco, patterns of use and customer preferences can be extremely varied all over the globe. Developing world nations are particularly prone to corruption and navigating the red tape and bureaucracy in the environment needed to set up a new business can be daunting. Given that an increasingly larger percentage of the company's revenue is derived from international sales, having acquisitions in every nation where the brand has a presence might also be logistically difficult and costly to maintain.

Reference

David, F.R. (2005). Strategic management: Concepts and cases (10th ed.). Upper Saddle River,

NJ: Pearson/Prentice Hall.

Case study: Japanese company

Q1. Assume that you are a member of the strategic planning committee that intends to design the ethical standards for the international human resource management of your company.

Ethical standards can vary a great deal between nations. In Japan, holding fast to one's word and being honorable is very important. Customers take the obligation of the organization very seriously and violating statements is seen as a profound breach of trust. In contrast, in the U.S. It is understood that there may be delays and over exaggeration in regards to promised delivery dates.

Q2. Interpret what you think have caused the reactions of the Japanese sales manager as mentioned in the Case Study. How are the personal ethics and corporate ethics interpreted differently (a) in the U.S.A., and (b) in Japan?

In Japan, job performance is taken very personally. In the United States there is more of a separation: someone would not necessarily be considered dishonorable because of a production delay at his or her organization, since this is assumed to be due to factors beyond the manager's control in many instances. In Japan, a subordinate may take the fall for someone higher-up at the organization because responsibility is viewed in a collective rather than an individualistic fashion. Taking responsibility for actions not directly caused by one's own mistakes but by others is common in Japan because there is not the same sense of individualistic 'fairness' to the employee as in the U.S. Workers are judged by the performance of their teams, not their own performance in isolation.

Case study: Medium-sized business corporation

Q1. Use what you have learned in this course and provide (a) the SWOT analysis and (b) IFE (internal factor evaluation) of your focal company (Whole Foods).

Strengths: Strong brand recognition, perceptions of company as 'healthy' and 'organic'

Weaknesses: Perceived as pricey, out-of-touch

Opportunities: Rise in interest in what is in the food supply, greater need to cater to diners with special diets

Threats: Organic foods more common and found at cheaper retailers such as Wal-Mart

IFE:

Strengths: Team-based dynamics; a culture of transparency (including salary information); autonomy for store managers (Fishman 1996)

Weaknesses: At times, Whole Foods' leadership has been perceived as insensitive to the needs of lower-level retail workers

Q2. Decide an appropriate strategic corporate plan

The challenge for Whole Foods is to maintain its niche marketing strategy without being at too high a price point for the average consumer, given that it must still market to a relatively broad base of customers to remain solvent.

Q3. Devise the business level strategies as well as operational strategies in full support of this newly devised strategy.