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Using an example of an MNC (multinational corporations) from an emerging market, present an analysis of the firm-level and country-level factors that have contributed to its success and/or failure. What are the main lessons international business managers Essay

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    Business
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    Masters
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Management 4

INTERNATIONAL BUSINESS MANAGEMENT

International Business Management

Introduction

Operations of Multinational Corporations are affected by both the firm- level and country- level factors, which are responsible for their failure or success especially in the emerging markets. The process creates a greater interest and urgency in ways of developing better understanding of the various deployments and diffusion of managerial strategies as part of international business management practices. Wal-Mart Stores Inc, is one of the largest Multi- National Corporations in the world, dealing with retails and operations of hypermarkets, grocery stores and discount department stores (Wal-Mart, 2016). The excellence record in the United States over the years facilitated its expansion and globalization into other regions of the world. Due to the internal factors within the United States and its breakout point leverage, the company has excelled in all fronts on a domestic level. Different firm- level factors have contributed to its success as well as failures coupled with country- level issues that have impacted on the failure aspects within emerging markets like Mexico and Africa.

Discussion

Firm- Level Factors

Corporate Structure

As the largest non- government employer in the world, Wal-Mart’s corporate structure is responsible for the success in emerging markets’ build up. In regions like Africa and Mexico, the structural decision- making and level of operations is centralized under the hierarchical form, respective of the emerging market portfolio (Attarzadeh and Ow 2010, p. 7). In the two countries, the setup and authority levels are decentralized according to the operational monarchisms needed with equivalent handling and execution of all demands. The respective employee base and management levels all follow the chain of command in delivery of the duties as well as sticking to the laid down protocols and rules of engagement. It is the transferred into the corporations’ objectives goals and objectives, as well as mission and vision for longevity and profitability. Any issues arising from the setup is only deliberated at the senior level without interrupting the functionalities of the whole system.

The other unique element of the corporate structure as a firm- level factor in the success of the company in emerging markets is the driven corporate structural handling of its proceedings. At each of the representative market basis, Wal-Mart has a written down and undertaken management delivery of all the operational settings within the organization. According to Besner and Hobbs (2012), the devolved system within the organization is built on accountability with involvement at the top level. The headquarters being at Bentonville, Arkansas, all other representative offices follow the same approach in delivering of all the requirements irrespective if their location and market dynamics. At the conclusion of proceeds, accountability is ensured by the reported mechanisms back to the headquarters for confirmation and delivery of strategic decisions. They are thus maintained in an in-house capacity with the hierarchical demands of the overall organizational plans, sustainability and progression.

Management

The top management of Wal-Mart Inc. has been an integral part of the company’s success in the establishment of is expansion programs all over the globe. With the centralization process based in Arkansas, all the relevant authority and respective jurisprudence requirements are made and facilitated in the same place. It is then transferred through the collective approach to all other regional head office for simultaneous and synchronized functionalities (Pedersen and Tihany 2010). Of most significance is the accumulated inference used in managerial assertions with the policies that govern each store or office in the emerging markets. For example, the financial results of each year can be analyzed at the headquarter basis for reviews and subsequent effective decision concerning the policies for implementation to be made. The main headquarters does not have to be involved in the holistic approach as they are independent and self- driven.

Management traditions within the corporation are responsible for the translated results achieved thus far amongst the emergent markets and their operations. All the management employees or office holders at Wal-Mart have earned their responsibilities and officer-bearing with the experience that comes with the post and expectations (Finance 20106). It is stated that they have all been as employees from lower levels working from one stage to another whilst driving the organization’s agenda throughout the time. In addition, the skill, knowledge and level of expertise gained in the fields of applications and expectations are testament to the procedural approach by the organization in fulfilling its mandate. The control mechanisms are ingrained from the fundamental stage into achieving the very best of amongst the professionals, and that is why they can lead independently in the emerging markets despite the hardships and dynamics faced.

Corporate Culture

The driven philosophy behind Wal-Mart’s success in both the United States and abroad is the culture of the customer preference as being the most important person in the proceeds. From the smallest of its stores to the largest, Wal-Mart has targeted the approach and terns of services delivered to the various customers who frequent there in order to maintain their loyalty and trust as well as satisfaction aimed at increasing the rate of other interested parties. Freeman and Shaw (2009) note that the corporate culture of customer preference is ingrained from the formative periods of service delivery as requested by the management and decisions abound. All employees buy into the idea and ensure there is adherence to the same throughout their stay whilst achieving the set targets and objectives. The concerns and feedback from the customers are also responsible for the derivative satisfaction and reliance stages.

Another aspect of the corporate culture exhibited by Wal-Mart is through the combination of top to bottom approach. The philosophy instilled is that customers and persons are the way to success all the way to the top from the bottom (Jones 2013, p. 11). The treatment enabled about all employees is the same manner it is transferred to the customers. Therefore, corporate culture has increased the significance of the employee as a fundamental member of the organization in order to improve on targets, customer satisfaction and service delivery. In turn, the productivity is increased due to moral- boosting abilities as well as the communication and understanding enabled between the different levels of organizational basing. As the targets are achieved, so are the organizational goals and mission parameters as per the retail requirements in the industry and market dynamics. The costs and concerns are kept at a minimum for maximum profitability.

Research and Development

Wal-Mart faces challenges in the globalization environment and continued rivalry in the retail industry from all quarters. As he margins are shrinking, various requirements in the market favor the versatility approaches of certain organizations. It is this reason that Wal-Mart has paid particular attention to the research and development of its services and products across the emerging markets as a force of reckon in order to increase the margins of profitability and relevance from the rest. In the private label brands of the company, increased wares are the main targets for dispensation of the required statistics for improvement across board (Robinson and Robinson 2006, p. 64). Increased financing of the supply chain technology and attention to changing trends among the customer bases is a growing behavior in the management policies and strategic plans. Learning from mistakes has become second to nature in order to avoid past slips as well as losses in fortunes.

Operations

The basic functionality of Wal-Mart to its headquarters and suppliers across the country is the connectedness and communication portfolio based on the operation standards. With the number of suppliers involved in the organization’s operations topping over two thousand, there is concern on the level of inventory needed in the business to thrive and reduce chances of decreased returns. There is a clouted service of maintaining the levels at the peak without any obligations towards the discount prices as well as having up- to- date computerized system for all functionalities and back up (Seethamraju 2012, p. 533). The levels of distribution are categorized in a decentralized manner for easier management, reliability and accountability at all times. The economies of scale are also balanced in a neutral perspective according to the supply and demand basis whilst keeping the organizational operations at peak.

Country- Level Factors

Political

At the firm- level operations of the corporation, the political factor in the emerging markets of both Mexico and regions like Africa has created the necessity for its success as well as failure. In chine, the recipient operations of all standardization strategies have been instrumental in ensuring that the company has thrived. The relative accepted nature of business between China and the United States has ensured that the internal operations are smooth with minimal discrepancies (Stoichey 2014, p. 97). Addressing of any politically motivated issues in the country is limited as there is stability and ensured progression of business terms that give way to ensured transactions is guaranteed. In addition, political intonations are not a mainstay of Wal-Mart in majority of the countries where the company ventures into globalization. Without specified interest there is avoidance in complete stature of the proceeds.

On the other hand, emerging markets have contributed to the failure of Wal-Mart losses experienced thus far. For example, the political unrest experienced in both Africa and a country like Mexico does not warranty the probable profitability status of the organization’s targets. Involvement of the policies and business terms in the regions accounts for the lack of investor ability to carry out operation and achieve anything substantial. Involvement in the political issues only seeks to worsen the conditions for the corporation as different warring sides will target the proceeds and terms of service delivery. Venkateswaran (2012) argue that the environment and surrounding for the functional basis of the corporation is thus affected to the extent of paralysis. In some instances like Mexico, the differential wings of political divides sabotage any business operations in order to achieve their agendas. Hence, Wal-Mart looses out on opportunities.

Economic

In the country of operational development, Wal-Mart has been particular in the United States due to the strengthened economical stature that it provides for suitability of businesses. Fro example, the GDP of the country has been on an upwards trajectory of about 3.5% in an annual basis. The services and clientele in the country offer the best economic returns possible for the corporation to target its growth and productivity ion order to set the standards in the industry (Attarzadeh and Ow 2010, p. 7). The considerations are made depending on the willingness to invest further into the country due to the promise of returns and profitability causes. Since the country is a developed economy, the actions and management decision are thus simplified as the corporation is assured of maximum returns throughout a financial year. The operations are also placed in a secure contractual terms throughout the period.

When looking at the emerging markets, Africa presents a great opportunity for Wal-Mart to spearhead its operations in search of opportunities for easier expansion and achievements. The growing number of possible customers interested in the company is a sign of promises for all periodic shifts and turns in the market dynamics. However, the economical basing is varied, and requires carefulness. The economic abilities of major countries in the region as well as from Mexico provide a gloom picture. According to Besner and Hobbs (2012), the economy is reliant on one-sided form of market industrialization like agriculture to help dictate the standards and business opportunities. Strategies for discount trading and retailer dependence in the region are quite low and they are prone to failures from time to time. The presentation provides a negative outlook for any prospects as such, and limits the corporations’ delivery.

With the social basing of majority of emerging markets, the preference casts a differential basis of business operations in them. There is a tendency of the people in such locations to prefer the locally available corporations over any foreign company. Since Wal-Mart is particular in the approaches used to deliver their services, products and operational basis on a chosen country, the distinction has limitations in the choice of Africa or Mexico as compared to established markets. Despite the efforts of trying to establish the good customer relations with the available consumers in such locations, the outright bias in favor of the traditional and locally- backed corporations is obvious (Devinney, Pedersen and Tihany 2010). Thus Wal-Mart faces an uphill task of consolidating the chances and risk in the process before selecting the appropriate channel to use. The strain within the terms of operations only makes the corporation lose more ground in the competition.

Technological

Emerging markets lag behind on issues like technological advancement as compared to the developed nations as well as established markets. When Wal-Mart bases its communication and level of operational functionalities, it relies on its availability with the technology platform. It acts as a guide to service delivery, back up and emergency response as per needed times. For example, the slot machines, security systems, file backups and biometric readers in the process are all responsible for ensuring that Wal-Mart is atop of its game when compared to rivals as it serves better, quicker efficiently and generates better outcomes. However, in the emerging markets like Africa and Mexico the challenge is in the platform necessary for supporting the technological requirements (Devinney, Pedersen and Tihany 2010).. Competition with the traditionally based firms becomes harder as they are accustomed to the manual processes.

Environmental

The product types and services rendered by Wal-Mart are particular in the variations provided by effects they cause on the environment. The corporation has identified self- regulations, which govern the type and availability of the products that can be sold or delivered within their stores and distribution systems. They provide for a solid and fundamental basis of the environmental regulations required to safeguard the brand’s name. In the emerging markets like Mexico and Africa, conflict can arise from the availability of the same products and service deliveries, especially when management systems require different availabilities (Finance 20106). The company faces hue fines and costs to change the suitability made in reference to the determined causes. The latter markets are also not in the same framework as the usual terms provided by the developed nations. The step provides a detrimental form of basis required for business establishment.

Different countries have various regulations and legislations that determine the terms of service and business operations for Multi- National Corporations. Wal-Mart minimizes any chances of risking its brand and image by contravening any legal terms set in the country of interest. With emerging markets like Mexico and Africa, the business legislations and regulations are not consistent for longevity. Changes and alterations are abound in order to promote the locally- driven corporations at the expense of international or Multi- National ones (Stoichey 2014, p. 97). Business terms become harder and not easy to navigate especially with the consolidation of other aggregate factors like the currency strength and exchange rates, uniformity of labor laws ad such. The corporation stands to lose ground at all times with every single developmental basis made epically when the regulations and policies are aimed at diminishing its growing influence in the market.

Lessons for Multi-National

The most intriguing lesson for MNCs from working in the BOP business sector is about expenses—for development, appropriation, assembling, and general «expenses of association.» Because the BOP constrains an exceptional accentuation on value execution, firms must concentrate on all components of expense. According to Stoichey (2014, p. 97).Deficiency and the expense of capital power firms in BOP markets to be extremely centered on the effectiveness of capital use. MNCs have a tendency to force their administration frameworks and practices on BOP markets and find that it is difficult to make a benefit. The decisions are straightforward: Change the administration frameworks to cut expenses or lose huge measures of cash. Wal-Mart Stores Inc is one of the biggest Multi-National Corporations on the planet, managing retails and operations of hypermarkets, markets and markdown retail establishments. The brilliance record in the United States throughout the years encouraged its extension and globalization into different locales of the world.

Emerging markets require intensity in the analysis and approach to investment. They should be able to reflect on the corporation’s ambition but with the realization of reality in terms of the dimensions and difficulties that face establishment of any opportunity (Attarzadeh and Ow 2010, p. 7). This civil argument will most likely proceed as the developing business sector MNEs are expanding their support in and extending their joining with the worldwide framework in numerous structures. The open deliberation might even spread to different regions, for example, business, promoting, HR, worldwide worth chain administration, and inventory network administration in EMMNEs. As such, the center of surviving writing has been on bigger EMMNEs, as these have been more under the spotlight. The money related emergency in the most recent couple of years has expanded not just the bigger EMMNEs’ interest in worldwide markets, additionally the littler and medium-sized firms from developing markets (Attarzadeh and Ow 2010, p. 7). The rising example has been changing in the most recent decade as the littler and the medium-sized firms have been internationalizing through mergers and acquisitions to get to brands and information in created markets. Strategic decisions will then govern the process of increasing the profitability cause.

References

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