In 2016, Do an international firm's home country, culture and institution still have any implication.
Global business environment can be determined as type of situation in which will have business operation outside of their home town. There are different type of issues or problems that are faced by management in order to deliver adequate services to customers (Paris, Swartout and Mann, 2013). There are many strategies that are implemented by the firm so as to enhance their customer base and to attain their competitive advantage. There are areas that has to be considered and steps are taken in order to develop positive perception among mind of people. In this context, there are internal as well as external factors that affect the business negatively. Around the world, there are many companies that provide their customers with similar products and services. Different set of strategies are implemented so that they will be able to be better and grab customer's attention (Yan, Berezhnoy and Nordenskiöld, 2012). Each organization have set up their goals and objectives. In this context, they have set out activities that will be helpful to reach them. For each and every activity, it requires employees who have skills and capabilities so that they will be able to support the firm. In order words, workers are the face of organization. They are the one who present the products and services to customers. When firm has skilful workers, then it helps to develop strong customer base. Further, different countries have diverse policies which has to be followed by the organizations which have their businesses at different markets. With this respect, it includes corporate social policy, internal operations of business, etc. (Qian, Dean and Chaudhuri, 2012). Moreover, there are different ways through which a company can enter into a market but it is important that suitable strategy to be adopted so that they will be able to enter the market. This essay is about Dell which is a computer manufacturer headquartered in US and was founded in the year 1984. There are many markets around the world in which they have developed their business but there are many differenc
Dell is a leading computer technology company of USA that is engaged in developing, selling and repairing computer related products and services. The Company was founded by Michael Dell in the year 1984 and it is serving at worldwide level. Major products that are served by entity includes personal computers, network switching software, cameras, data storage devices, servers, printers, MP3 players, computer peripherals, Smartphones and software. Dell is enhancing its operations and expanding business in diverse countries (Naumova, Imakaev and Dekker, 2013). It is assertive that strategic approach should be used for starting operational activities in new country. Dell has given focus on expanding its Portfolio and started offering computer solutions to customers. Corporate social responsibility (CSR) is explained as approach taken by business entity for rendering some part of their revenue for benefit of the society.
Wide range of activities are included under corporate social responsibility and it aids in providing better living standards to local community people (Gulati, Puranam and Tushman, 2012). Management of Dell has adopted some innovative methods for completing their CSR activities. New and advanced technology is being used for giving positive impact on the environment and building good image of enterprise in local community areas. Company is committed towards putting their best technology for doing good for the people. Every staff member at Dell gives support for creating values for buyers, employees, shareholders, business partners and other stakeholders. First public offering of the entity was started in year 1988 when offering of the entity was $35 million (Nora, Lajoie and Gribnau, 2012). Operations of the enterprise started in India in 1996 and it was established as “Dell computers India private limited”. It is one of the fastest growing information technology company of the nation and profitability of company is enhancing day by day.
Major concentration of the enterprise is to offer innovative and effective technological solutions for its consumers. CSR activities are defined as manner of operating a business by meeting legal, commercial and ethical guidelines for rendering better values to customers, shareholders, staff members and local community people (Raff, Ryan and Stähler, 2012). Some core significant values in CSR includes avoiding discrimination at work place, protecting the beauty of natural environment, avoiding abuse of human rights at work place and adopting philanthropic efforts. Variation of culture also gives impact on corporate social responsibility of entity and strategic approaches are used for meeting the challenges that are faced due to differences in cultural environment. Company has adopted advanced technical approach for rendering completing their CSR responsibilities.
Electricity is purchased in the enterprise from renewable sources and it aids in rendering protection to natural environment. Greenhouse emission has also reduced by 16% and total consumption of electricity has also reduced by 22 Million Kwh. Adoption of advanced and innovative technology supports for providing better and effective positive benefits in terms of corporate social responsibility of entity (Cavusgil, Knight and Rose, 2014). Adoption of telecommuting has been done for reducing carbon footprint and it has helped in reducing overall operational cost of the business. Some important sustainability initiatives are also taken by Entity and projects have been started which includes rainwater harvesting, monarch butterfly habitat restoration effort and internet restoration.
Company has focussed on building a more responsible and innovative supply chain in nations and investments have been increased on supplier training and rendering more development opportunities (Schuster and Holtbrügge, 2012). Technology recycle programs have also been used by entity for providing better protection to natural environment. In addition to that size of packaging also has reduced and sustainable material is used for accomplishing this purpose. Material which are used in packaging includes Bamboo, Mashrooms and wheat straw. This initiative take by Dell supports in reducing operational and financial cost of the enterprise and reducing negative impacts on the environment. Team members have volunteered in many community service activities that are organized by entity. Social issues are a big concern and CSR activities of entity aids in rendering better living standard to people (Gruber, MacMillan and Thompson, 2013).
Team members in Dell are passionate about serving the communities and they share their expertise for giving their support for charitable causes. Home country's culture gives implication on corporate social responsibility activities of entity. Some approaches are used by management of Dell for meeting with the issues and challenges that are faced due to cultural differences. Managerial orientation is one such technique and under this ethnocentric orientation aids in making use of own culture as a standard for judging culture of other nations (Doherty, N. A., Kartasheva and Phillips, 2012). On the other hand Polycentric orientation helps in creating a mindset under which greater affinity is developed by managers for the nation in which work activities are performed by them. Geocentric orientation is explained as global mindset in which a manager is capable for developing understanding about a business and market conditions. Culture of a nation is based on some specific elements that includes geography, gender, age, language, occupation, geography and ethnicity.
Characteristics of culture includes learning the culture through socialization and acculturation. Culture of a nation is not about individual behaviour and culture can not be inherited. Whenever, any enterprise starts business in new country than Hofstede's Typology of national culture supports for giving a medium for understanding culture of a new country (Dunne, Klimek and Xu, 2013). Dell corporation can make use of this approach for developing understanding about culture of India and it will be beneficial for expanding existing operations of entity. Greet Hofstede's typology of national culture includes some elements and it aids for knowing about culture of India. Power distance is one essential element and explains that all people that are living in society are not equal. India is a country where power is centralized among some specific group of people. Employees in India are dependent on their superiors for giving directions and there is acceptance of UN-equal rights among the power privileged people (Wang and Lestari, 2013). However, in USA equal distribution of power is observed between top level and lower level management.
Level of communication that follows in enterprise is from top to down where top management gives directions and instructions to the subordinate. Second element is individualism and it is defined as degree of independence that is hold be society among its people. In India objectivistic and individual traits are observed (De Beule, Elia and Piscitello, 2014). Collectivistic trait describes that preference is given for belonging to a larger social framework. People's action in india are influenced by recommendations and suggestions given by family members and opinion given by colleagues. On the other hand in USA score low in the category of Power distance and it shows that individualistic culture persist in the society. Masculinity is third element and high score is achieved by India in this category and it reflects that society in India is driven by achievement, success and competition. While in USA high score is gained in this category and it shows masculine drive of the nation.
India scores low in the category of Uncertainty Avoidance and due to that medium and low preferences is given on avoiding uncertainty (Doh, Lawton and Rajwani, 2012). USA also score low in this category and acceptance is given for new ideas, new concepts and new and innovative methods. Long term orientation is one more factor that has been included under Greet Hofstede's typology of national culture. India score high on cultural dimension and great tolerance is observed in India for religious views that are observed all over the world. Low score has been gained by USA and it reflects that people in nation are prone to evaluate and analyse new information and data (Murray, Ju and Gao, 2012). In addition to that Indulgence is also part of typology of national culture and India score lows in this category which reflects that society in India have a tendency towards cynicism and pessimism.
Dell company has gain success for undertaking corporate social responsibility in India. Ethical behaviours are followed and no discriminations are made with any stakeholders on the grounds of age, sex, religion, financial status and educational qualification (Aguinis and Glavas, 2012). Sustainability is a concept which describes about meeting the requirement of present without harming future generations. Three major types of purpose are completed under sustainability and it includes social interest, economic interest and environmental interest. Various process that lead towards corporate social responsibility have been implemented in Dell organization.
Management of entity has given instructions to staff members to take part in various CSR activities that are being organized in company. The major objective of corporate social responsibility is to ensure an increase commitment at all the levels of company so that it can operate its business in socially, environmentally and economical manner (Cheng, Ioannou and Serafeim, 2014). Team members are engaged to use their passion for supporting the community people. Adoption of advanced and innovative technology has been taken for making improvements in lives of local community people. Role of technology has been enhanced for addressing and reducing different environmental challenges that are faced by corporation.
Non profit organizations that are working in the nation have been supported and provided access to advanced technology, expertise and technical skills. Innovative and strategic practices have been adopted in entity for rendering community services in India (Kim, Park and Wier, 2012). Underserved youth has been provided with technical expertise and skills that supported them in their lifelong learning and career development process. More than 75% team members have been engaged in rendering 5 million hours of cumulative services in local community area. In addition to that advanced and expertise technology has been used for enhancing the living standard of youth and supporting 10 million people for growing and maintaining a better living standard for themselves (Dhaliwal, Radhakrishnan and Yang, 2012).
Many constraints are faced by companies while executing their business operations in new nation. It is needed that knowledge about local market area should be developed and some specific operations and transactions should be prohibited. Dell company faces high transaction cost due to lack of availability of financial intermediaries. Rules and regulations related to trade and commerce also differ from USA to India and due to that also difficulties are faced. Location also gives impact on the operational activities and it is needed that enterprise should be established where planning permission are easier to obtain. CSR strategies are implemented in effective way in India as there are less barriers faced in languages and majority of people speak and understand English in India (Brammer, Jackson and Matten, 2012).
Mindset of country is geocentric and management of Dell appoints their USA employees in India as well. Indian government supports in CSR activities and funding are also provided by state for rendering better community services. Moreover, there are challenges which are observed in ethical behaviour and response of people is not positive towards CSR activities (Servaes and Tamayo, 2013). According to Companies act 2013 any enterprise that is earning net worth of more than 500 Crore is required to spend at least 2% part of their net profit towards CSR activities. Ethical behaviour of a firm is related to corporate governance and there is direct relationship that exist between them. Ethics, corporate social responsibility and sustainability are major components of corporate governance and ethical behaviour of Dell gets affected due to it. Many advantages have been reaped by Dell organization through CSR activities and brand image of company has been improved.
Staff members are taking part in various corporate social responsibilities activities that are organized by entity and it has aided in retaining existing staff members. CSR activities supports in differentiating the firm in local market area and enhancing brand image of the entity (Clapp and Rowlands, 2014). Operational cost and other investment costs reduces and CSR activities supports for avoiding taxation, regulation and other legal action that are taken by local government authorities. Elements of corporate governance that includes ethics, corporate social responsibility and sustainability supports in making timely investments. It becomes easier for reaping better benefits from CSR initiatives and energy cost of Dell has been reduced and packaging cost and waste in the manufacturing and supply chain activities have been reduced (Kitzmueller and Shimshack, 2012).
Ethics cover behaviour of Dell employees and no discrimination is made with any staff member on the grounds of sex, financial status, occupation, gender and religion and it aids in providing better working environment to all the workers (O'Shea, Alonso and Dale, 2013). In India it is considered as ethical to render equal respect to every individual and it is considered wrong to do misbehaviour with people. In USA it is considered as wrong to use loud pitch of voice while making communication with people. Decentralization of authorities is considered as right in USA and power of taking decision is hold by many levels of authorities. Bribery and corruptions are considered as Wrong in USA but in India it is considered that it is fair to take bribe. Dell is carrying its business activities in appropriate and legal manner and there is no sign of Dell carrying out inappropriate corporate conduct in India (Bondy, Moon and Matten, 2012).
Ethical relativism is considered as theory that describes that action done by an individual are related with moral norms that are existing in society (Bertran, Zhang and AlemaÌn, 2013). There are variations that are observed in ethical norms and Relativism is a concept that mentioned about a contextual based standards whereas normative is considered as uniform standard that are followed in a society. Dell is not operating in a manner that exceeds the public expectations of consumers, employees, shareholders, communities and employees (O'Shea Alonso and Dale, 2013). All the operational activities have been performed in lawful manner and Dell company does not have any history of human right violation, child labour and upholding labour unions. Pyramid of Ethical behaviour contains three significant layers and it includes ethical behaviour, corporate social responsibility and complying with laws and regulations of nation. Dell is performing vary well in India and Corporate social responsibilities are performed in effective and well planned manner. No illegal methods are adopted for executing business functions and ethical behaviours are followed while running operational activities of the entity (Garay and Font, 2012). Moreover, legal guidelines, policies and rules formed by government are followed while executing business activities and CSR activities have been influenced by culture or institutional government.
In USA CSR and sustainability are explicit element of corporate policies while in India CSR and sustainability are implicit element of institutional framework. Dell has became successful in reacting to institutional pressures to engage in CSR and Sustainability and strategic responses have been adopted for meeting with challenges that are imposed by institutional pressure. Reactive response is adopted under which responsibilities are denied. Responsive method is adopted under which responsibility is admitted and work is done as per the requirement (Moser and Martin, 2012). Accommodative response is also used in which responsibilities are adopted properly and all the work required to perform is accomplished.
Proactive response is used and responsibilities are anticipated and more work are performed than it is needed. All the strategies adopted by Dell supports in gaining competitive advantage and staying ahead with the competitors. Management of Dell enterprise has adopted effective and systematic organizational structure for running daily operations of business and global matrix and functional structures are adopted for executing business activities (Kitzmueller and Shimshack, 2012). Organizational structure is defined as system which defines linkage between people, processes, functions, and different processes that are used in carrying out daily operations of entity.
Under Dell decentralization of authority is followed and power of taking decisions is hold by many levels of authority. Involvement of staff members is also taken in strategy formulation and policy making process (Servaes and Tamayo, 2013). Some government interventions are faced in international trade activities that are performed in business and Indian government grants subsidies for financing the business activities. In addition to that administrative practices also gives impact on the institutional practices and bureaucratic rules are followed that made it hard for importing the foreign goods. In USA multi divisional forms are adopted and global matrix structure is followed.
Dell enterprise has taken some vary significant initiatives for executing corporate social responsibility and many innovative and new concepts have been used for providing better living standards and community service programs an local community areas in India. Technology has played a crucial role and supported Dell in accomplishing goals that have been set by management of company (Kim, Park and Wier, 2012). Digital literacy has been promoted by entity and more than 5 million young people have been provided access to new and advanced technology. In addition to that recyclable material is used in manufacturing and supply chain activities of the entity.
Electricity is purchased from sources which uses recyclable plants. In addition to that recyclable material is used for packaging various digital products before sending them in new market areas (Dhaliwal, Radhakrishnan and Yang, 2012). Strategic goals that have been set by management of Dell have become accomplished and Indian market is offering opportunity for selling large amount of products and gaining huge financial revenues and profitability. Strong market demand for digital products have made it easier for Dell to target specific group of consumers for selling their computer products and other programs. India is second largest populated country of the world and it offers big consumer base. Corporate social responsibility program supports for enhancing brand image of the company and making consumers aware about organization. In India abundance of low cost labour is there and raw material for making products of enterprise are easily available (Aguinis, and Glavas, 2012). Transport and communication infrastructure of organization is also vary effective and it supports in reaching to large number of consumers. One more strategic goal of the enterprise is to be innovative seeking and for meeting this innovative individuals have been hired in the entity and it has supported in meeting the strategic goals of entity.
Porters five forces: It is a type of competitive strategy that helps the organization to enter into the market and enables to understand the dynamics of competition (Aguinis and Glavas, 2012). There are different things that it helps to identify. In this context, it includes identifying the opportunities that the business may get. Further, it enables to make proper differentiation among the organization that already exist in the market. With this respect, there are five areas that should be considered and these areas covers all the important aspect that helps to think over the steps that should be taken by the organization. Below given are these five steps that fall under Porters five forces:
Power of suppliers: They are the one who make sure that the materials required are available so that product can be delivered (Cheng, Ioannou and Serafeim, 2014). As per the case, Dell is highly dependent on suppliers. This is because, they do not manufacture but they just assemble the products and deliver it to external vendors. In this context, there are many organizations who are potential enough to supply parts but there are only few who are reputed and supply materials that Dell assembles. In this context, the bargaining power of suppliers is high. Further, the switch cost also contributes effectively towards the bargaining power. Further, there are other organizations like Dell like HR, Apple who also face issues and their bargaining power is high as there are few suppliers from whom they get materials (Kim, Park and Wier, 2012).
Power of buyers: This can be determined as the impact of customers on the industry. In case the bargaining power is high, then it creates strong relationship for producing industry becomes closer. In accordance with the case, the power of buyer is immense because of less difference in the products (Dhaliwal, Radhakrishnan and Yang, 2012). Customers are well aware about the products that are delivered by Dell. Further, high level of sensitivity related to price also increases the bargaining power. Similarly, the power of buyer is high for competitors like Apple and HP.
Entry/Exit: When a new firm enters the market, then it has negative impact over the firm that already exists in the market. The segment which is highly attractive has high entry barriers. The electronic industry is not termed as significant because of finance and cost and also includes technological barrier (Brammer, Jackson and Matten, 2012). However, when new products are identified, then it becomes easy for them to enter the market. There are existing players like Acer, Samsung, HP, Apple, etc. The entry of to this sector is easy but it depends upon the type of innovation that has taken place and the way it has helped in contributing the society.
Substitute products: This can be determined as the stage in which there is a product that is able to meet up the requirement of other product. When substitute increases, then it becomes for the organization as the sale will reduce (Servaes and Tamayo, 2013). In the context, for Dell there are many substitutes and so that rate of substitute product is high. With this respect, it includes smart phones, Tablets, Android, etc. It is essential for the firm to make frequent changes in technology so that they will be able to deliver services to customers at high quality.
Rivalry: There are certain set of strategies that are implemented by the organization in order to make sure that they will be able to deliver their customers with high quality services and in gaining competitive advantage (Clapp and Rowlands, 2014). In other words, they try to make differences and for this purpose, they conduct research and survey that enables to deliver adequate services to customers. As per the case, there are many Dell make sure that they come up with new products and services that are helpful to make the firm be different from its competitors.
In order to enter into the market, there are various assumptions that has been made by Dell in order to make sure that all the operations that the firm want to deliver can be made effective (Kitzmueller and Shimshack, 2012). In this context, cited firm has conducted market research in which they identified that people of India generally focus on the quality. Buying behaviour of customers affects because of many factors among which one of the main factor that considered is price. Price can be determined as one of the main factor that affect the growth of the organization. In order to develop a strong market, cited firm have assumed that the price needs to be reduced so that more and more customers can be attracted.
There are different type of strategies that can be implemented by Dell in order to enter into the market of India (O'Shea, Alonso and Dale, 2013). In order to enter the foreign market, there are different strategies. In this context, direct exporting can be determined as one of effective ways to enter the market. With this respect, below given are the strategies that can be implemented in order to get into India:
Direct Exporting: As per this strategy, Dell will select agents or distributor who have proper knowledge about the market and they will help to deliver their products and services (Bondy, Moon and Matten, 2012). In this context, they become the face of organization and they make sure that cite firm is able to make their distribution.
Licensing: In this strategy, firm will make sure that they deliver their products to other organization and they will sell on behalf of the firm. This is another effective strategy which makes the company enter the market.
Franchising: This type of strategy is effective for the organization that has repetitive business model like food outlets (Ofodile, Altschuller and Fessler, 2012). Firm will establish their business and then they will provide all the necessary things. Then the services will be delivered by local people. This happens when the business services that is provided by the firm is unique and it also has strong brand recognition.
Partnering: This can be determined as necessity so as to enter into a new market. This is effective on those market in which the culture is totally different from that of home country. In simple words, the organization will tie up with a company which already exists in the market were they want to expand.
Joint venture: As per this strategy, a new company is formed by joining a company with other one (Moser and Martin, 2012). In simple words, two companies will join up their businesses and new one will be formed. There are different type of issues that workers has to faced in this strategy. However, this is highly effective in order to enter the market. All the distribution that was already used by the organization can be used and management can easily deliver their products and services.
Among all these market entry strategies, Dell should made use of Joint venture in which they should join up their businesses with other organization so that they will be able to enter the market (Garay and Font, 2012). Further, they can also make partner up with any firm that will be helpful enough to deliver the products and services.
India is a developing country in which the government is highly supportive towards the technology. With change in time the use of technology has helped organization in order to high quality services to their customers. In this context, organization who want to enter this market gets highly benefited with the services (Becchetti, Ciciretti and Kobeissi, 2012). This also helps in reaching out the customers and to understand needs and requirements. In order to make assumptions, to enter the market, there are many sets of strategies that are implemented. In this context, one of the most effective strategy is research method. This is a type of strategy that enables to understand the demand of products and services that Dell in India. People of different people have diverse set of expectations and with the help of research is high beneficial. Another method includes suggestion from employees. They are the face or organization as they haven direct interaction with customers (Stettner and Lavie, 2014). They are the one who present the services.
In order to enter the market, it is important that firm is able to identify and hire Indian people who will be able to develop strong impact and support the firm in achieving their goals and objectives. In order to establish business in new market, it requires local people who will be able to support the firm in their business operations (Bertran, Zhang and AlemaÌn, 2013). With this respect, it is over the HR department that they have strong recruitment and selection process so that they can hire skilful and capable workers with aim to achieve the goals and objectives of Dell.
When business establish their operations in international market, like Dell in India. There are different set of risk that they have to face. Among which one of the risk is related with foreign exchange. It is a type of risk in which wealth is affected. It occurs when financial transaction is denominated in currency. In this context, it includes risk like transaction risk, economic risk and translation risk. In order to overcome the risk, cited firm make sure that they have proper analysis of business which helps them to identify foreign exchange risk. Further, they calculate confirmed and unconfirmed risk. And once the level of exposure is known, then it enables to know the rate of risk is coverages is required. Further, cited organization look for currencies that provide them higher returns which is more than America and this strategy enables to overcome risk of foreign exchange at great extent.
As per the analysis, it can be stated that there are different type of issues that are identified by the organization like Dell, HP, Apple, etc. in order to make sure that they are able to establish their business in new market. There are diverse areas that has to be considered by the firm so that they can attain the same growth which they have achieved in other markets. Before entering the market, it is essential that proper analysis is made by the firms so that they will identify the areas in which they lack and the precautions that should be taken. For example, the perception of people who are from other countries like India prefer to purchase products that are of low price and if Dell set their price comparatively high when compared with other organizations like HR or Apple, then they will not able to achieve their desired goals and objectives. In this context, it can be stated that, firm should have proper research before entrying into a market. Further, there are diverse type of policies that are followed at different markets and so it is essential that organizations understand them and make changes in their policies so that they will be able to develop positive perception among mind of customers. In case, the perception of people is not positive over the services and products that are delivered, then growth of the firm will get affected. Moreover, management needs to identify people who will be able to support the firm and in achieving their goals and objectives. They are the one who directly interact with service users and provide them information about the products and services. In case, they are not effective, then it becomes difficult for the firm to establish their business at new market.
Summing up the present essay it can be concluded that international firm's home country culture and institutions have implication to its corporate social responsibility, foreign entry strategy and internal organization. Answer of each question mentioned in the essay applies to all firms originally from the same country. For example Apple is a leading technology company that has started its operation in India. Company is facing same issues and home country's culture is giving implication and influence on the present business activities of the entity in new market India. Diverse range of business functions such as CSR responsibilities, sustainability and internal organizational structure is getting affected due to home country Culture of Apple. Company is taking innovative approaches in India for rendering better protection to the environment and new solar energy projects have been launched for reducing the carbon footprint. Major focus is given on developing and delivering safer and environment friendly products and it is ensured that business functions are manager sustainably. Paper used in the packaging is recycled and sustainable and it aids in protecting and making a sustainable planet. It reflects that home country's culture have implication on the sustainability and other activities performed by Apple in India.
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