Custom «Outsourcing an MNC - Part 21» Essay Paper Sample
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Outsourcing is defined as developing a supply source that is located outside a company. It is mandated with the production of some end service or product. The process involves the provision of providing inputs that require further assembling in another company as a finished service or product. Value addition to goods and services is entailed in a process of outsourcing. The theory behind outsourcing was adopted through the ideologies of Karl Marx when he suggested putting-out system. Most multinational corporate companies (MNC) have used this idea to channel their productivity across the global scene (Mehrotra, 2005). The recent scenario of the world being a comprehensive community has improved this principle to reach different available market opportunities. The culture of outsourcing is established in the USA’s economic set up to capture different available business opportunities. The country has engaged in exchange of services and products from within the country and outside the country. Companies have realized a need to develop different branches in enterprises whether open or closed in various states. Companies have developed both tend businesses and contributory businesses in different countries to expand their market value. Opportunities in existing in the market are assorted; and every MNC is skirmishing to have a share of the same one (Mehrotra, 2005).
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A culture of multicultural exchange has further been supported by the advancement in the information technology (IT). The companies can communicate and exchange data across the world with minimal expenditure in transport costs. Such opportunities offer quicker and fast means through which diverse services and products are manipulated to fit the demands of the market available. The company established will be intending to supply electronics services to the US market in the limited States (Tallman, 2010). The company plans to acquire services from different nationalities across the global market. The employees will offer services in various areas they are experienced. The company will incorporate strategies adopted to enable a proper diverse working environment. Various steps under an administrate organ will formulate conducive rules and regulations that favor all parties in the company in relation to their country of origin. Outsourcing as a global integration has generated measures that need to be considered in business planning in organizations.
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Global Integration Strategies
Global integration strategies entail international strategy, multinational or domestic strategy, global strategy, and transnational strategy. The foreign policy requires that a company makes operational and strategic decisions that are made at the mother organization and later carried out to other subsidiary firms to be adopted. The plans are expected to fit the local application of the extended company and be operational for profits. In this scheme, the founding company has the powers to control the activities of its branches to fit the objectives set to be achieved after every financial year. The established policies are expected to manage the local market and promote the services offered by the organization in the given area. The policies have to foster a transparent working relationship among workers and consumers of diverse cultures (Andersson & Holm, 2010).
Domestic or multinational strategy requires that the given organization set out policies. These ones are practiced within the same country where the corporation is located. The procedures set require that the mother company applies its rules and regulations within the same local jurisdiction. The organization under this policy in relation to other strategies is expected to adhere to the given local standards and regulations. The plan recommends that the firm should consider the possibilities of hiring alien workers and doing business with other enterprises governed by different laws. This strategy has to consider opportunities that are available locally for other multinational corporation companies within their area of operation in the country (Andersson & Holm, 2010).
Under global strategy, the enterprise is expected to offer services across the national grid and international levels. However, the home company controls a flow of operations. The organization will be expected to standardize its services for both local and international markets with a balance of ensuring that profits are attained maximally (Andersson & Holm, 2010). This strategy will enable the company to establish a ground level for its targeted customers in any region. It further implements its policies hand in hand within all branches. The strategy enhances a proper undertaking in the field work in order to avoid any wastage of resources and be misguided with the targeted market of consumers. The company will have to establish its policies based on the unique manner of multicultural requirements across the diverse set of available clients (Andersson & Holm, 2010).
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The fourth strategy, i.e. transnational strategy, is adopted by the organization to enhance a complete unity of various nations towards the collaboration of a multicultural business. The plans will be developed at the mother company to be adopted in the other country. The issue of national laws will be considered to ensure that there is no conflict of legislation during business transactions. The company will enhance its products reach the specified market group to maximize profits and commercial markets. Each strategy employed in the primary business will be transferred to control the running of other firms across different countries where the branches are situated (Andersson & Holm, 2010).
The most suitable policy that the company can adopt among the four ones is the global strategy. The organization would have to ensure that its operations are applied both locally and internationally. Global strategy equips the mother company with all the powers to enhance a proper running of its local businesses. The main branch will be able to interact with the new business through the set up global rules. They facilitate globalization in the new generation of business. The department of information technology will further boost such interactions to enhance quick business activities across the global scene (Andersson & Holm, 2010).
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Environmental Scanning Analysis
Every environment has its unique way of handling and sustaining any business. A multicultural environment requires better social, economic and political considerations to facilitate the running of the enterprise. The mother company being located in the USA will face different scenarios in the market planning of expansions in business. An African subsidiary will differ from an Asian branch when it comes to setting up the company. Handling such challenges will require extensive balances of resources in relation to profits anticipated (Mehrotra, 2005). The political environment of any country is a primary concern of any business. As seen over the past year, the African setup has serious political challenges to companies based on the political cloud of the counties. There have been frequent revolutions due to some changes in the government regimes in the region. The same case cannot be compared to most of stable Asian countries that offer a better climate for business establishments across the global scene. The team will find it convincing to recommend a business branch for the company in the Asian, South American and European markets due to their stability in political regimes. The same markets also provide a broad range of consumers that require information technology services being limited (Mehrotra, 2005).
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Ownership Structure and Organizational Structure
The business will be forced to establish a given unique structure both internally and externally. The external structure will require a consideration of the set subsidiary to enhance management of branches in relation to the mother company. Internally, the ownership structure will be established to advance operations and control of transactions of all the businesses (Andersson & Holm, 2010).
The structure of both ownership and organizational levels will enhance the adequate control of operations of a business at both local and international levels. The arrangements will promote a proper flow of information and commercial transaction for the growth of the company. The organization will benefit from all angles of business opportunities provided in the new available environment (Andersson & Holm, 2010).
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Political Risk Analysis
The political conditions of any country will determine it is as an economic progress. Any risk that comes to political stability will hinder how business is carried out in any setup. The company is required to assess any political risks that are involved with the establishment of their business. As seen earlier, a proper legislation on economic backgrounds enhances achievable goals for any multinational corporation’s country. The given business will strive due to the support of governmental agencies. The United Arab Emirates is an excellent example of what political stability and government support can do to any business. It is backed by diverse markets (Tallman, 2010). Political risks are analyzed in the manner in which government change offices and how laws are established. A country that has an ample procedure in changing the government regime from one to another will offer a better environment for business unlike that involved in coups. The stability of laws also established to offer a chance to make proper visionary objectives for the company in any country. Such logistics plays a crucial role towards researching the political risks of any country (Tallman, 2010).
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The company will find it viable and secure to invest in countries that have well-established political systems. Through them some deals can be made without frequent interruptions. When the company has established its branch, it can work out the recommended procedures as required to fit in the stable system. Every proposal made will be in the position to acquire stable characteristics to enhance good relations between older and new environments (Tallman, 2010).
The established risks can be averted through the implementation of proper strategic conditions. They favor the company and the political power of the day. The most stable opportunity is the availability of appropriate corporate social responsibility programs. The strategy will facilitate both parties in a deal to put in consideration all the adverse effects that may take place in case of any political instability. The approach will also play through the unique environment that the organization intends to venture. The company will implement all measures to ensure that its end of the deal is achieved (Keinert, 2008).
The given political powers can also be asked to establish laws that foster international relations among businesses at the global level. Each indicator of such political goodness will can be enhanced by the company through financing of certain bills. It should be done to speed up a legislative process. Some countries have a good political will. However, they lack the necessary finances to establish particular fundamental programs that boost relations. The company can take individual steps to evade such risks through private support and donations to support their establishments. Both the corporate social responsibility and funding of legislative programs offer a ground level to benefit to the government and companies in avoiding political risks. Each party will benefit from their cooperation to the respective parties they represent. The government will provide a new class of markets to the organization while it offers financial help through donations and grants (Keinert, 2008).
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In conclusion, a business proposal in any country needs to put all measures required for its establishment. The strategies across the world will boost the development of any business and facilitate proper relations among the people in a multicultural environment. The established conditions on any environment have regulated how companies. They require determining any business center in the mother and foreign countries. Possible setups will facilitate proper conditions favorable for any subsidiary organization to prosper under the directions of the mother firm. Every strategy has its ways of application; and the enterprise has an opportunity to use the most suitable plan. It can fit its demands and conditions. The discussed risk analysis in the environmental and political scenes needs to balance. It should be done to ensure a perpetual succession of the company over a period of time. The risks will either come in play during the establishment of the organization or after its setup in the given country of interest.