Good Findings on 'Managing Gen Y' (from BusinessEssay.net)

MANAGING GEN Y

1.0 Introduction

Managing today workforce is never something easy. One of the hot topics in the recent years is that the art of managing younger people is different from the conventional wisdom of managing workforce. As discussed by Carlson (2010), today, the younger workforce is often called the Generation-Y, or equally frequent as the Internet Generation. The art of management of Generation-Y is essential skills of managers in the workplace today. This is because more and more young workforces are joining the employment today. Often, they are energetic, ambitious and dare to change. However, there are arguments that Generation-Y is hard to be managed. As discussed by Cunningham (2007), Generation-Y can be hard to be managed because the traditional management techniques may no longer relevant in dealing with the younger workforce. Specifically, it is commented that the traditional motivational techniques used are less effective against Generation-Y, as they seemingly response or react to different sets of motivational factors. Besides, managing Generation-Y is also often perceived as daunting due to the high turnover rate of the younger workforce. As argued by Myers (2007), the high turnover rate of Generation-Y often lead the managers to feel that the young workforce are not patient, short term oriented, not loyal, and hard to be managed. Thus, in this report, proper ways to deal with the Generation-Y will be discussed. The relevant reward system suitable to manage the younger workforce effectively will be discussed. Then, a discussion on how these rewards system can be applied to current workplace will be presented.

2.0 Unique Characteristics of Generation-Y

It is not hard to observe that Generation-Y tend to exhibit different behaviors than the elder employees. Such a phenomenon is also widely discussed in the human resource literature (Downs, 2009). There are several reasons contribute to such phenomenon. Firstly, Generation-Y tend to have different expectations, due to different upbringing environment and experiences. Apart from that, Generation-Y also tend to perceive things differently (Binsacca, 2008). Thus, it is important for human resources manager to attend to the different expectations and perceptions of the younger workforce. As they have different mindset and hence different behaviors, a different set of best practices may be necessary to manage Generation-Y effectively.

3.0 Literature Review: Different Reward System for Generation-Y

3.1 Transactional Approach in Managing Generation-Y

As discovered by Tulgan (2009), Generation-Y tend to think frequently from a consumer perspective, even when they are studying in the school or university. Generation-Y tend to think themselves as the consumers, and thus have develop a transactional mindset in dealing with other people. In the context of workplace, Generation-Y view that the employment contract is indeed some form of transaction between them and the employers. Thus, effective managers should not structure the pay system in the traditional manner. The Generation-Y is not interested in being paid because they are the workforce in a corporation. Instead, they may be more easily managed through the new mindset whereby the manager is essentially purchasing results from the workforce. Thus, to effectively manage the workforce, managers should have a result oriented reward system, and to purchase the results generated from those Generation-Y workforces in the company. Such a reward system makes real sense to the Generation-Y.

3.2 Short-Term Reward System

As the economy and the business environment has been changing fast in the recent decades, Generation-Y intuitively understand that long term secure and permanent employment is not to be expected in the future. Thus, it is found by researchers that Generation-Y tend not to trust the corporations’ promises to provide them with long term, lifelong, reliable and secure employment benefits. For them, such promises essentially worth nothing much, as the changes of the business environment may cause any corporations to go bust in just a few years. As such, Generation-Y value more on remuneration or compensation packages that is obvious and given to them in the shortest possible time (Eisner, 2005). They are less likely to value those promises that will benefit them in the long run, often, many years down the road. As such, it is essential for the management to structure the reward system to reward the younger workforce under a short term time frame. As argued by Tulgan (2009), such short term reward system is powerful in motivating Generation-Y because the short term structure of these reward system deliver a greater sense of control and certainty on the potential rewards to be achieved by Generation-Y. Thus, they are more likely to work harder in the short term towards the completion of a project. As such, it is possible then to manage them to get real results under competitive business environment everyone is experiencing today.

3.3 Establishing Point-based Reward System

According to researchers, Generation-Y is the generation growing up with video games, and many of them have been repeatedly programmed subconsciously to keep scores and beat their previous high scores in a game. Such a phenomenon is affecting Generation-Y in the behaviors in workplace (Caverhill et. al., 2010). Due to the video game effects, they love to collect points, compete in a safe environment, and continuously improve their performance and scores. Thus, researchers suggested that a point system is necessary way to effectively manage Generation-Y workforce. Under the point system, everything in the organization should be assigned points. The successful completion of projects or behave in a certain way will assist the workforce to be fine-tune their behaviors to score better in the future (Caverhill et. al., 2010). For example, points shall be rewarded when they arrive early in a meeting or workplace, points should be rewarded when they able to complete a project successfully, while points shall be deducted when they did something wrong. On such a system, management can slowly let the point system does the management job. Once the younger workforce able to achieve certain level of points; they shall be given certain form of formal recognition and rewards. Only in such a manner they can be motivated to work harder to beat their own scores and to concentrate on doing the right things, at the fastest possible time.

3.4 Financial Rewards

There are also certain findings discover that money has been becoming more important motivators in moving the younger workforce today. This is not something so obvious in workplace in the past, whereby the elder generations are motivated by job securities, passions on the job, recognition, workplace condition, and employment benefits. However, these factors are less likely to be considered by Generation-Y as important factors. In a survey, a total of more than 80% of the Generation-Y workforce look forward to the salary packages, bonuses, stock options, and other sorts of financial benefits in their decision making process for an ideal job (Binsacca, 2008). Besides, it is also discovered that many of them will leave the current employment, if they are offered significantly high salary in other places (Downs, 2009). Thus, in order to prevent high turnover among Generation-Y employees in workplace today, it is crucial for management to offer equally competitive salary packages to them.

4.0 Discussions

As discussed above, it is discussed that younger workforce, namely, the Generation-Y is reported repeatedly to have higher turnover ratio, perceived as less loyal, not patient, and have more short term oriented behaviors. Thus, managing such group of workforce can be hard, and a great burden will be placed on the human resources management department (Cunningham, 2007). After reviewing the many literature related to managing Generation-Y in workplace, several findings can be concluded. These findings will be discussed in this section.

To begin, it can be seen that it is widely recorded under the literature that younger workforce has different expectations. As they have different expectation, they needs and wants from working in a company differ from the elder generations. From the different expectation; they tend to react differently to different stimulus. Apart from that, they tend to have different mindset or perceptions also. Some of the different perceptions discussed in literature review above include: seeing employment contracts as transactional agreement or deal; place more importance on monetary and short term solid rewards; prefer to be rewarded on results or performance; does not view positively on the corporations promises for lifelong employment security, and more motivated by financial related rewards. From these observations, it is obvious that a different set of guidelines or best management practices and policies should be implemented to effectively manage the younger workforce.

Consistent with such findings, sensible and logical management system designed to manage Generation-Y have been proposed. Among the promising management techniques that can be applied to manage corporations with many young workforces include establishing a point system. Under the point system, every attitudes, results, successes, or bad outcomes will be assigned relevant points. When the Generation-Y perform in a way consistent with company values and contributing to company performance, they should be rewarded points; and points shall be deducted when they did something wrong. This is a sensible management tool. Besides, in managing the younger workforce, it is also make sense to have different compensation packages for them. As it is discovered that they no longer react to the traditional motivation factors, such as job security, employment benefits, and so on; a different set of promises should be provided to them.

However, there are certain points worth mentioning. The discussions provided above can best be perceived as generalization of the behaviors or perceptions of Generation-Y. It is crucial to understand that not all young workforce to behave in the similar manner. Thus, management should not over generalize in managing Generation-Y. On case by case basis, they should have different techniques to deal with different people, whenever possible or feasible to do so. Apart from that, people can change really fast, and it is also reasonable to expect that the different cultural setting in different region may affect the behaviors, attitudes, expectations and tendency of Generation-Y. As most of the researches conducted above is focusing on the western countries, particularly in the United States, it is reasonable to expect that Generation-Y in other nation, for example, in the East region, such as China, Japan or India may have different set of behaviors or expectation; and hence require different best practices to be managed effectively.

5.0 Conclusion

Overall, the report has highlighted several interesting points of findings about Generation-Y. Generally speaking, a lot of the Generation-Y is found to have different behaviors, perceptions and expectations. Under such a situation, it is reasonable to expect that the many traditional human resources best practices may no longer be effective (Espinoza et. al., 2010). It is then argued that particularly the reward system in managing younger workforce, should be altered or changed accordingly. Such an assertion is definitely important to be noticed and aware by managers in workplace today.

6.0 References

Anonymous. (2008). Benefits Are Key in Managing Gen Y. (2008, September). IOMA’s Report on Managing Benefits Plans, 08(9), 1,11-12.

Binsacca, R. (2008, November). Managing Gen Y. Builder, 31(13), 59-60.

Carlson, S. (2010, February). managing gen-y: supervising the person not the generation. SuperVision, 71(2), 9-11.

Caverhill, S., & Brooks, M. (2010, October). Understanding and Managing Your Gen-Y Lawyers. Law Office Management & Administration Report, 10(10), 1,13-15.

Cunningham, S. (2007, March). Managing The Millennials. Best’s Review, 107(11), 67.

Downs, K. (2009, April). Managing Gen Y in Recessionary Times. Business Credit, 111(4), 28-29.

Eisner, S. P. (2005). Managing Generation Y. S.A.M. Advanced Management Journal, 70(4), 4-15.

Espinoza, C., Ukleja, M., & Rusch, C. (2011). CORE COMPETENCIES FOR LEADING TODAY’S WORKFORCE. Leader to Leader, 2011(59), 18.

How to Get Buy-In From Generation Y. (2005, March). Accounting Office Management & Administration Report, 05(3), 4-5.

Jacobus, J. (2008, January). Managing the generation gap. The Kansas Banker, 98(1), 14.

Messmer, M. (2008, June). Managing the Millennial Generation. NPA Magazine, 7(3), 27.

Myers, J. (2007, October). The How and the Y. Profit, 26(4), 43-44.

Tulgan, B. (2009, December). MANAGING in the ‘NEW’ Workplace. Financial Executive, 25(10), 50,52-53.

Wubbe, E. (2009, September). Striving for a Balance Between Work & Life. The Secured Lender, 65(6), 26-30.

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BusinessEssays.net

JAGUAR EXPANSION TO CHINA

Introduction

In this report, the various strategies for effective human resources management in Jaguar in the contemporary business environment will be presented. Three areas pertinent to the company are change management; expatriate management as well as managing across culture. In fact, all these areas are not something faced by Jaguar in the current business environment, but instead, they are serious management issues to be handled properly by other companies as well.

To begin, the scenario facing Jaguar will be briefed here. Firstly, in the recent decades, it can be seen that the economic growth and vitality has been shifting from the West to the East. The terms ‘emerging countries’ are even quoted for refer to the four fastest growing economy in the world, namely BRICS (i.e., Brazil, Russia, India, China and South Africa). Particularly in China, the economy is growing very fast, and there are many business opportunities that cannot be missed by multinational corporations around the world. Thus, it can be seen that corporations are expanding their business operations to China. To set up new business venture in China, these corporations are required to send their existing experienced and talented staffs to spearhead the business expansion venture. However, as shown in the case in Jaguar, people may resist changes. They may not want to work in China, as they are accustomed to working in UK (i.e., their home). Thus, change management is something to be focused on by the senior management team in Jaguar. Secondly, it is crucial for Jaguar to understand the differences of culture between China and UK, as lacking of accurate understandings on such areas are regarded as the key reason for business failure in China. As such, it is the human resources manager responsibilities to understand that managing or working in different cultural context can be challenging. Proper training, education and development should be provided to expatriate.

Change Management in Jaguar

As shown in the case of Jaguar, workers may resist changes. For example, people may not want to move to work in China as they want to stay back in UK. They may have different reasons for such attitudes, but from the senior management perspective, unable to convince people to embrace changes and move to work in China can be deadly towards the business success of Jaguar. In order to handle such situation, it is important for the manager to understand the reasons causing resistance to changes among the workforce.

There are many literatures discussing on possible reasons employees resist changes. For example, according to Joseph (2010), people may resist changes as they naturally are not motivated to move out from their comfort zone. They prefer to stay in status quo, and if the motivation or the rationales to change is not sufficient to convince them to move forward, they will simply resist any changes. According to the researcher, many of the reasons people resist changes are psychological. For example, they may imagine that changes can be harmful to them, bring more workloads to them, or replace them in the organization, but all these may just purely be psychological imagination of the people. When people associate negative emotions towards changes, they may become fear about changes, and not willing to make a move. However, some of the reasons causing resistance to change may be real. For example, according to Ford & Ford (2009), people may resist changes as the changes demand them to work more (i.e., which may affect their work life balance in the near future), to learn up new skills (i.e., not everyone like the idea of self improvement), to move to new locations, or may simply lost of power due to the changes. When people understand how the changes will affect them negatively in the organization, they are likely to resist changes, to stay relevant, comfortable and secure in workplace. Having to say that, other possible reasons that people may resist changes include: not being engaged in the change process, having no understandings on what is required for changes, not being supported in the change process or fear of losing job security due to the changes (Ford, Ford & D’Amelio, 2008).

There are many techniques on which change can be planned and executed successfully in workplace today. Firstly, it is important for the senior management to plan seriously on how to carry out the plan process. The timeline, goals and steps by steps approaches towards achievement of the change objectives must be realistic (Gilley, Godek & Gilley, 2009). Not only is that, these objectives must be communicated to the employees. The reasons for the change process must also be informed. Employees at all level should be persuaded to embrace the change process, and to educate on how they may be benefited from the change process. For this, it is particularly important to obtain the buy in from the management level regarding the change process. Secondly, the feedback from the employees must be obtained. This is important as manager must consider the feedback and feelings of the employees seriously. After, change is something emotional. In fact, Ford & Ford (2009) argued that allowing employees to involve or participate in the change process is important strategy. As people spearheaded the change process, they are more likely to buy into the idea of change, as they are allowed to involve in the planning and execution stage. People feel valued, and ownership of the change process itself. Thirdly, the reward system must be changed according to reward desired behaviors. According to Dijk & Dick (2009), reward system can be influential towards shaping employees attitudes and behaviors. In the case of change, new rewards system shall be implemented, so that employees will adjust their behaviors accordingly. Without doing so, people may stick back to the old habits, which are rewarded by the old and outdated reward system. Last but not least, the mindset and expectations of senior management on the change process is very critical. As argued by Huang & Huang (2009), senior management must understand that the change process is a long term process, and patient is required. It can be best performed through a continuous improvement philosophy. Thus, with such expectations, senior manager will not easily give up when they are faced with temporary challenges that seem hard to solve in the near future. They can become more determined and persist despite challenges and as time pass by, the problems will ultimately give way to their change progress.

Expatriate Management in Jaguar

When multinational companies expand to the foreign countries, it is important for the multinational firms to send their very best people to spearhead the expansion. However, as argued by Hogan & Goodson (1990), expatriate management for a multinational firm is nothing easy. For example, there is high failure of expatriates programs because human resources managers under estimate the necessary steps and strategies to successfully manage an expatriates program. One of the reasons for such a high failure rate of expatriates programs are that the expatriate sent to foreign countries are not able to adapt to the different culture. In fact, according to Siljanen & Lamsa (2009), very often, the previous best practices in the parent company may no longer viable in the new workplace, when people simply have different social cultural beliefs of behaviors.

Fortunately, there are many lessons to be learned from expatriate failures. For example, Stening (1994) and Fisher & Hartel (2003) have outlined several lessons to be learned. They argued that it is important to ensure that the expatriate sent must have excellent emotional intelligence as well as interpersonal skills to fit to the local culture. It is repeatedly stressed that being able to handle pressure and stressful situation due to cultural differences in new workplace is important criteria of successful expatriate candidate. Besides it is asserted that sending someone with previous successful expatriation program can be helpful in ensuring success of the expatriate program. Apart from that, Fisher & Hartel (2003) further argued that expatriate willingness to learn new things, to improve own self as well as having a positive mindset is very important traits in selection of possible expatriate candidates.

From another perspective, Ramalu et. al. (2010) argued that it is crucial to support the expatriate for cross cultural adaptation. This can be done by exposing the expatriate under mentors to guide him how to react and work in a particular cultural environment. Before work related tasks are assigned to the expatriate, it is crucial to expose the expatriate to the new culture. Having certain exposure to the new culture will definitely helpful in preparing the expatriate to more ready to handle difficult situations when problems arises. For this, there are many literatures argued that training and development program is the key to expatriate success. The relevant literatures include Caudron (1991); Hogan & Goodson (1990); and Dunbar & Allan (1990). According to these researchers, it is apparent that expatriate must undergo intensive training and educational programs before they are send to work in the foreign country. It is important to provide them the necessary materials on how to behave and manage across culture. They are many subjects to be taught in these expatriate programs. These subjects include the following: communication skills, interpersonal skills, cultural awareness, self awareness, and management across culture, conflicts management, creative problem solving, as well as certain degree of foreign language training. Besides, training may not sufficient, as the performance and the psychological aspects of the expatriates must also be monitored during the expatriation program. From time to time, supports are necessary to reduce the stresses faced by the expatriates.

Managing Across Culture for Jaguar

As in the case of Jaguar, it is very obvious that one issue that will bound to affect the business operations and expansions is due to the cultural differences between China and UK. This issue will not only affect the expatriates sent to the country, but also the strategies of the senior management in expanding the business venture in China. Anyway, it is important that management and the employees aware of the differences between China and UK culture. This is not something new. In fact, researchers such as Martinsons & Ma (2009) are investigating the differences and the cultural tensions between China and UK. It is found that the people behaviors across the two countries can be very different due to differences between Western philosophies to the traditional Chinese culture. Luckily, the research on how the culture of China and UK differ is available in the recent years (due to the rise of China as the new economy power around the world). For example, Li & Putterill (2007) provide comprehensive and useful general views of the Chinese culture, which is definitely useful for the expatriates and the management to learn about before they expand to the nation.

To be able to communicate across culture in effective manager is very important for multinational companies. For example, Matveev & Nelson (2004) asserted that issues arise when there are misunderstandings between communications between people from different cultural background. For example, when certain words or jokes used are regarded as not respecting the beliefs of culture of certain people, people may become defensive and ultimately aggressive between each others. Harvey & Griffith (2002) however asserted that cross cultural communication extend beyond words. It is said that the body languages and the reaction of people can be important in affecting communication across culture. In order to enhance effectiveness of cross cultural communication, it is important to learn up the language of foreign language, as language will point people to understand each other better. Besides, listening to each other is important. It is crucial to listen first, to understand the other perspectives accurately before someone is to make any comment or judgment on the other. Not only is that, understanding the widely used assumptions and daily habits of people in different culture is crucial.

There are also strategies to deal with intercultural conflicts, when they arise. For example, Awang & Roach-Duncan (2010) suggested several ways to deal with conflicts. According to the researchers, it is important for the people working in multicultural workplace to tolerate each others. They are best to taught about the cultural differences between the people, and how to avoid unconsciously offending the others. Whenever conflicts arise, people involve should be fast to apologize. Besides, it is crucial for people to respect each other, so that harmony in workplace can be ensured.

Last but not least, it is also crucial for management to understand that the many Western management theories may not relevant in other cultural context. According to Hofstede (1993), people are basically different, as they have different lifestyle, experience, attitudes, and assumptions, style of thinking, beliefs and environment. Thus, to apply the best management practices in a different culture may no longer be viable. Accordingly, cultures can be different in at least four dimensions, namely: high or low power distance, individuality or collectivism, masculinity or femininity, and high or low uncertainty avoidance. Due to the differences between the cultures, it is important for the manager to adjust the existing best practices to fit the new business situations. The cultural beliefs of people should be considered, and that must be incorporated into the organization management system, policies and practices. Only through such method, the most effective system in the particular culture can be produced.

Conclusion
As a concluding remark, this essay had discussed the many factors to be seriously considered by human resources personnel to ensure successful business expansion to China. In the event of Jaguar expansion to China, the HRM department play a supporting and yet strategies roles to engage the people to work together for business success and performance in the new marketplace. People may resist changes, but it is up to the HRM department to handle their resistance properly. Besides, proper expatriate programs should be formulated and executed. Last but not least, HRM department should also educate the people about cross cultural differences, and incorporate the differences into the formulation of new best practices in business and management of business venture in China.

References
Dunbar, E., & Katcher, A. (1990). Preparing managers for foreign assignments. Training & Development Journal, 44(9), 45-47.

Hogan, G. W., & Goodson, J. R. (1990). The key to expatriate success. Training and Development Journal, 44(1), 50-52.

Caudron, S. (1991). Training ensures success overseas. Personnel Journal. 70(12), 27-30.

Fisher, G. B., & Hartel, E. J. (2003). Cross-cultural effectiveness of Western expatriate – Thai client interactions: lessons learned for IHRM Research and Theory. Cross Cultural Management, 10(4), 4-26.

Stening, B. W. (1994). Expatriate management: lessons from the British in India. The International Journal of Human Resource Management, 5(2), 385-404.

Ramalu, S. S., Rose, R. C., Uli, J., & Kumar, N. (2010).Personality and cross cultural adjustment among expatriate assignees in Malaysia. International Business Research, 3(4), 96-101.

Siljanen, T. & Lamsa, A. M. (2009). The changing nature of expatriation: exploring cross-cultural adaptation through narrativity. The International Journal of Human Resource Management, 20(7), 1468-1486.

Huang, C. H., & Huang, I. C. (2009). Resistance to change: the effects of organizational intervention and characteristic. Review of Business Research, 9(1), 110-114.

Ford, J. D., Ford, L. W., & D’Amelio, A. (2008). Resistance to change: the rest of the story. Academy of Management Review, 33(2), 362-377.

Dijk, R. V., & Dick, R. V. (2009). Navigating organizational change: change leaders, employee resistance and work-based identities. Journal of Change Management, 9(2), 143-163.

Joseph, R. C. (2010). Individual resistance to IT innovations, Communication of the ACM, 53(4), 144-146.

Gilley, A., Godek, M., & Gilley, J. W. (2009). Change, resistance and the organizational immune system. SAM Advanced Management Journal, 4-10.

Ford, J. D., & Ford, L. W. (2009). Decoding resistance to change. Harvard Business Review, 99-103.

Hofstede, G. (1993). Cultural constraints in management theories. The Executive, 7(1), 81-93.

Li, X., and Putterill, M. (2007). Strategy implications of business culture differences between Japan and China. Business Strategy Series, 8(2), 148-154.

Harvey, M. G., & Griffith, D. A. (2002). Developing effective intercultural relationships: the importance of communication strategies. Thunderbird International Business Review, 44(5), 455-476.

Matveev, A. V., & Nelson, P. E. (2004). Cross cultural communication competence and multicultural team performance. International Journal of Cross Cultural Management, 4(2), 253-270.

Martinsons, M. G., & Ma, D. (2009). Sub-cultural differences in information ethics across China: focus on Chinese Management Generation Gaps. Journal of the Association for Information Systems, 10, 816-833.

Awang, F., & Roach-Duncan, J. (2010). Cultural differences and their effects on conflict resolution in business settings. Cultural Differences and Conflict Resolution, 27-26.





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Change Management in Proton Holdings - Compilation of Business Case Study by BusinessEssay.net

CHANGE MANAGEMENT IN PROTON HOLDINGS

Introduction

In the recent decades, due to the rise of the era of globalization, competitions across borders among businesses are becoming more and more competitive. In such an era, it is apparent that changes are necessary for a firm to stay competent and relevant in the volatile and fast changing business environment (Johnson et. al., 2005). In this report, several business management toolkits will be designed and presented to Proton Holdings Sdn. Bhd. (“Proton”), to assist the management team to lead a transformation process in the organization. This report is arranged as follow. Firstly, the company background of Proton Holdings Sdn. Bhd. will be presented. The rationales on changes are necessary in the organization will be discussed. Then, in order to transform the organization, several management tools for developing a viable work plan to change the organization will be presented. Under this section, the usages as well as the limitations of these tools will also be articulated. Then, it will be summarized how these many tools presented in this report can be combined to develop comprehensive and quality work plan for the company to transform itself in order to stay relevant in the ever dynamic and competitive business environment.

Company Background – Proton Holdings Sdn. Bhd.

Proton is the Malaysian government supported national car makers. Under the leadership of the previous Malaysian Prime Minister of Malaysia, Dr. Mahathir Mohammed, Proton is established to make affordable national cars for the Malaysian, while at the same time develop car manufacturing technologies and capabilities in the nation (Jayasankaran et. al., 2004). However, due to the increasingly competitive automotive industry around the world, Proton today is facing huge challenges, and had been experiencing several financial losses in the previous years. Instead of working towards the mission of providing affordable cars to Malaysian, the company is creating huge burden to the people, as the costs of manufacturing by the company is too high; while the quality of the car manufactured are too low, when compared to leading car manufacturers such as Toyota, Honda, Ford, Volkswagen and many others (Shari et. al., 1998). As the company is not doing well, it can be seen that the management team is fast to resort for government support to stay relevant in the marketplace. Due to government support, such as implementation of quota to make imported cars exceptionally expensive, Proton is still able to survive in the challenging business environment (Chacko, 2006). However, looking forward, the situation may no longer be favorable to Proton in the coming decades. For example, it can be seen that there are talks that government is not longer willing to support the company in the future, as the Malaysian government is having pressures to adopt free trade among the ASEAN countries (Burton, 2005). Besides, due to the inferior quality of the cars, people are found to willing to buy imported cars, even when the pricings are expensive. As such, change is necessary in the organization. It is crucial to throw away the old mindset, and move toward a performance oriented organization. People should no longer hope for government support, but instead should be motivated to work hard for superior product quality, customer satisfaction and company performance in the future.

Management Toolkits for Managing Change and Transformation

In order to outline the change process, it is necessary to firstly discuss on the changes needed in the organization. As discussed in the above scenario, the main issues affecting the performance of Proton is due to people and organization culture issues. Proton is a government linked company, and thus, people working inside are expecting government supports and easy work life, instead of competing hard with other stronger competitors. Due to such a situation, people are actually not improving the businesses, or their competencies in car manufacturing capabilities. Thus, a series of tools will be designed to assist the formulation of work plan on the organization transformation process. The various tools will be discussed as follow.

Situational Analysis

Before the change process can be designed, it is crucial for the management to utilize several tools to analyze the macroeconomy environment. For this, it is important for the management to employ PESTLE model to understand the external environment. Under such model, the political, economic, social, technology, legal as well as environmental factors will be discussed and researched. The framework is useful to assist decision makers to understand the macro environment in a holistic manner (De Wit et. al., 2004). By understanding the macro environment, it is then possible for the management to take into account the possible trends happening in the world. This is crucial as it is definitely not a wise choice to move against the trend, or to stay in status quo, waiting to become obsolete if the organization is not able to move in a consistent way by growing through capitalizing on the business trends around the world. Thus, PESTLE analysis will be used to assist the management team in Proton to understand how the business environment has been changing from time to time, and if they should change accordingly and adapt to the new competitive landscape.

The advantages of PESTLE tool are that it is easy to understand, and it is intuitive. The tool is also a powerful way to force the management to analyze the many issues in the external environment. Besides, PESTLE is also theoretically acceptable, and widely employed by practitioners. However, the tool is not the only method to understand the external environment. For a better understanding on the external environment, other tools are also available. These tools, such as stakeholder analysis, Porter Five Forces, as well as SWOT analysis, should be used to complement the PESTLE analysis for better research findings.

Kurt Lewin’s Change Model

One of the most popular and widely applied change management tools is Kurt Lewin’s Change Model, which separate the change process into three phases, namely: (a) unfreeze, (b) change, and (c) refreeze. Such a tool is relevant for Proton as it is discussed that a probably complete business transformation of Proton to a performance oriented and competitive firm is required. As such, the entire change process in proton can be arranged in accordance to the Change Model as outlined by Lewin. To be specific, it is important for the firm to plan the change program in Proton into three different phases, whereby different goals for the different phases should be set. The first phase should then be the unfreezing phase, whereby management should think of methods to move the people to embrace the new culture and working habits and style in the organization. As such stage, the strategies are mainly developed to handle the resistance to change among people from a psychological perspective. Then, other program can also be planned, as to move the people forward. Lastly, when people have change, then the management can plan to unfreeze the desired habits and culture in the organization.

Such a tool is practical as it is simple to understand, and it makes sense (Dessler, 2011). Secondly, the tools is comprehensive enough and yet straightforward for management to outline the work process for the change program in a very fast manner. However, such a tool has several inherent weaknesses. Firstly, it may be overly simplistic, as in the change process, it is reasonable to believe that many unforeseen circumstances may occur. Besides, the tool is not having several ways to capture the psychological factors in the change process. Not only is that, the many possible scenario on the change process is also not investigated. In order to cater for such weaknesses, in the change and transformation process, it is necessary for the management to utilize other tools, such as the scenario planning, sensitivity analysis, decision tree analysis as well as other form of financial simulation to analyze their decisions. By incorporating these tools into the change model, it is possible that the management can come out with better decisions.

Lewin Force Field Model

In the change process, it can be argued that the initial change momentum is the hardest part (Robbins, 2005). There are inertia factors to be overcome before people can be changed, or motivated to move towards a new direction. Luckily, a practical tool is available for assisting management to overcome the initial resistances to change – i.e., the Lewin Force Field Model (McShane et. al., 2010). The tool is presented in Figure 1 below. As shown in Figure 1, the tool can be used to identify the both driving and resisting forces against the change. Thus, by understanding on the respective forces, management can then pin down the root causes of the resistance to change, and then to tackle the respective resistance individually.



Figure 1: The Lewin Force Field Model

 



There are many benefits of such model. Firstly, it makes the change process easier. Instead of losing their ways in the complexities of the change program, management can use more systematic way to ferret out the resisting forces and step by step, tackle the every single resisting force separately. This will make the change process more fulfilling, and will definitely motivate the management to move forwards. However, the limitations of such model are that it does not provide guidelines on how each of the driving or resisting forces can be identified. For this, other tools will definitely be required. For example, questionnaires survey, fishbone diagram, mind mapping as well as other relevant tools can be applied.

The Cultural Web

After the many big picture issues are solved, then, the change process will move into a more detail phase. For this, as in the context of Proton, the change is ultimately about the change of organization culture, the tool such as cultural web is suitable for applications in the organization. The cultural web can be used as follow. Firstly, the existing organization culture can be analyzed, by investigating each of the various dimensions, as shown in Figure 2 below. The various dimensions include: stories, symbols, power structure, organizational structures, control system, rituals and routines, and the paradigm (Legge, 2004). All of these dimensions are powerful in characterizing the culture of a particular organization. Then, after the existing culture of Proton is known, the desired culture will be defined. By understanding where the organization is situated now, and the direction it should move towards, the many elements of the culture can then be designed and changed. The change process can be a gradual one, usually at one step at a time, until all of the dimensions are changed accordingly to become consistent and reflect the new culture.



Figure 2: Cultural Web

 



Conclusion
As shown above, many tools are required, and the combination of these tools, in a harmonious manner is critical to ensure that the work flow and plan can be carried out properly and effectively. Not a single tool can standalone, as each of the tool have the respective strengths and weaknesses. For each of the tool, a certain set of objectives can be achieved. In the report, a series of complementary and related tools are designed in a consistent and mutually supportive manner, to assist the management in Proton to ease the transformation and change process. Nonetheless, it should be highlighted that all of these tools can be combined with many other tools or concepts as well, whenever it is fit to do so. Management shall exercise certain degree of flexibilities and common sense to change accordingly when the situation deem fit.

References & Bibliography
Burtinshaw-Gunn, S. (2008) The Essential Management Toolbox: Tools, Models And Notes For Managers And Consultants . Wiley.

Burton, J.  (2005, July 21). Future of national carmaker divides Malaysian government: [ASIA EDITION]. Financial Times,p. 2.

Burtonshaw-Gunn, S. & Salameh, M. (2009) Essential tools for organizational performance: Tools, models and approaches for managers and consultants. Wiley.

Chacko, G. K.  (2006). Proton transitioning to Malaysian engine. Management Research News, 29(3), 139-151.

De Wit, B. and Meyer, R. (2004). Strategy Process, Content, and Context International Perspective, 3rd Edition, Thomson Learning.

Dessler, G. (2011) Human Resource Management ,12th edition,   Prentice Hall,

Economist. (1998). Business: Proton bomb. The Economist, 347(8070), 63-64.

Economist. (2005). Business: Malaysia’s motor mess; The car industry. The Economist, 376(8437), 62.

Jayasankaran, S.  (2004, July 14). Malaysia’s Proton Faces Uncertainty. Wall Street Journal  (Eastern Edition),  p. 1.

Johnson, G., Scholes, K. and Whittington, R. (2005). Exploring Corporate Strategy: Text and Cases, 7th Edition, Financial Times Prentice Hall.

Legge, K. (2004). Human Resource Management: Rhetorics and Realities (Management, Work and Organisations), (Ed. Edition). Palgrave Macmillan.

Lynch, R. (2006). Corporate Strategy, Fourth Edition, Financial Times Prentice Hall.

McShane, S. L., & Von Glinow, M. A. V. (2010). Organizational Behavior: emerging knowledge and practice for the real world (5th Edition). McGraw Hill.

Rigby, Darrell K (1994) ‘Managing the Management Tools’, Planning Review 22 (5). pp 20-24.

Robbins, S.P. (2005). Organizational Behavior, 11th edn, Pearson Prentice Hall, Upper Saddle River, NJ.

Shari, M., and Dawley, H. (1998, March). A Wrong Turn in Malaysia. Business Week, (3568), 50.

Van Assen, M., van den Berg, G. & Pietersma, P. (2008) Key Management Models: The 60+ Models Every Manager Needs to Know. Financial Times Prentice Hall, 2nd.edn.



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MARKETING COMMUNICATION MIX: APPLE VERSUS SAMSUNG

Introduction

Marketing communication mix is important in competitive business landscape, as the ability of any enterprise to communicate effectively and persuasively to the end users will ultimately affect the profitability and popularity of the products or services sold by that enterprise (Lazer, 1971). In this report, a comparative analysis on the marketing communication mix of Apple’s i-Phone to Samsung’s Galaxy S will be discussed.

The report is arranged as follow. Firstly, a literature review on the subject of marketing communication mix will be presented. Then, market overview on the mobile phone industry structure is performed. Later, the research methods used in this report is articulated and explained. Next, the analysis on the marketing communication mixes for Apple’s i-Phones and Samsung Galaxy S will be presented. Upon the analysis, a brief discussion on the differences between the two marketing communication mixes will be presented. The report concluded that both the marketing communication mixes of the two companies are outstanding and worth learning or copying by other businesses in today competitive business environment.

Literature Review

Marketing communication is the ways in which a company informs, persuades and reminds customers on the products and services sold by the company. It is an increasingly important elements of marketing as in the information overload society, the human attentions are become the scare resources (Olof, 2006). People may simply ignore any messages communicated by a corporation, no matter how much had been spent on delivering the messages to the public, when the messages are not compelling or attractive from the consumers’ perspectives. Thus, the design of marketing communication is crucial to reach the customers effectively and better than the competitors.

As discussed by Kotler and Keller (2006), there are six elements in marketing communication mixes. The six marketing communication mixes include: (a) advertising, (b) sales promotion, (c) events and experiences, (d) public relations and publicity, (e) direct marketing, and (f) personal selling.

Advertising. Traditionally, advertisement is the main way businesses entities communicate to the consumers. Generally speaking, advertising is the act of non-personal presentation and promotions of the products or services from a sponsor (i.e., the company promoting the goods or services). One reason advertisements are often used because such method is pervasive – it can be repeatedly used to send repeated messages to consumers. Particularly for large companies, the large scale advertisement often communicates about the reputation, size, success and power of the advertiser (Kotler and Keller, 2006). Besides, such methods can be designed to deliver amplified experiences or expressiveness to the receivers.

Sales promotion. Sales promotion can be a frequently used technique to encourage the consumers to try out a particular products or services promoted by a company. Usually, sales promotion is short terms, whereby incentives for purchasing a product or services such as discount vouchers, free gifts, or free tickets to other events may be offered to the customers (Kotler & Armstrong, 2004). Such method is powerful as consumers may perceive real value delivered or offered to them, and thus induced to try out the products being promoted.

Events and experiences. Under this marketing communication technique, company can sponsor activities and programs to interact more directly and personally with the consumers, in order to create stronger bonds or positive interaction with the end consumers. Events can be powerful as it engages the consumers, and deliver real experiences to the target prospect.

Public relations and publicity. Public relations are increasingly important to communicate or persuade the consumers to enhance the company images or images any products sold by the company (Kotler & Armstrong, 2004). Public relations, particularly being publicize in newspaper or third party sources, the messages delivered is more credible. It is also useful to reach prospects that consciously trying to avoid sales person or materials. Thus, through the recommendations of a third party, for example, being publicized in a leading magazine or newspaper, will surely enhance the reputation of a particular business or product.

Direct marketing. Direct marketing has been used widely by businesses for a long period ago. Under this method, mail letter, telephone, fax, email, or other sort of digital marketing mechanisms are used to communicate directly with the consumers or prospects. Direct marketing can be a powerful way to reach mass customers, especially using digital marketing techniques. Effective direct digital marketing can be a low cost option to tap into consumers – and yet delivering updated, customized and interactive communication to large group of prospect (Mehta et. al., 2002).

Personal selling. Perhaps the most effective but expensive methods of marketing communication mix is through personal selling, whereby face to face interaction with the consumers are designed to persuade, inform, handling objections, and securing orders from the consumers (Kotler & Armstrong, 2004). Such method is powerful because real time feedback or emotions from the prospect can be observed, and tackle immediately. However, such method can be expensive to reach the mass public in large scale.

In this report, the six elements of marketing communication mixes presented above will be used as the key framework for comparative analysis of two companies in the mobile phone sector, namely Apple’s i-Phones versus Samsung’s Galaxy S.

Market Overview

The market environment of mobile phone is a competitive, fast changing and dynamic one. The technologies driving the innovation have been changing fast in the past decades, while the consumers’ tastes can change fast. There are a few big giants competing in the mobile phone industry, where among the big players include Apple, Samsung, Sony-Ericsson, Nokia, Research in Motion and Motorola (Bulik, 2008). The industry structure is oligopoly, but fragmented in nature (Businessline, 2011). However, the competitions between the industry players are intense, particularly during recessionary periods. For example, in a few years ago, the mobile phone market is leaded by Nokia, as the company is perceived by consumers to deliver the most reliable, dependable and highest quality mobile phone. However, as the industry consolidated Sony-Ericsson come into picture to challenge the profitability of the market leader. Then, in just a few years, Research in Motion take the market by surprises through its sophisticated and well-position smart phones – BlackBerry. Having a blackberry suggests business savvy and effective execution skills, but that is no longer the perception of the market when Apple launched new i-Phones to the market. However, while Apple is celebrating is huge and gigantic success; Samsung is tackling and challenging popularity of i-Phones through Galaxy S II (Money Marketing, 2010). Overall, it can be seen that the industry is dynamic, and the product life cycles is very short, where any emergence of new technologies may threaten the profitability of even the market leader in the industry.

Research Methods

In order to conduct this research, both secondary and primary research methods are used, whenever relevant to product an insightful comparison of the marketing mixes of Apple’s i-Phones and Samsung’s Galaxy S. Secondary research will be performed through collecting relevant information from journals, magazines and books, from library or the internet. Primary research method however, is about using personal observation in analyzing and investigating the marketing communication mixes of both Apple and Samsung in daily life. That includes observations on advertisement of these companies on television, internet websites, cinema, shopping, as well as daily encounter with the messages related to these products.

The objectives of this research can be summarized in two points. Firstly, it is about investigating the marketing communication strategies and tactics used by companies dealing with mobile phones in fighting the competitive battle. Secondly, it is about identifying the campaigns and media used to deliver the marketing communication messages to the target market; as well as to understand how effective are these communication methods being employed. In order to conduct the research, the framework of marketing communication mix, as presented by Kotler and Keller (2006) in Literature Review section above will be utilized. Thus, the marketing efforts of Apple and Samsung in communicating to the mass public or target market will be analyzed through six dimensions as follow: (a) advertising, (b) sales promotion, (c) events and experiences, (d) public relations and publicity, (e) direct marketing, and (f) personal selling.

Analysis

In this section, the research findings and analysis on Apple and Samsung communication strategies in relation to the respective mobile phones products will be articulated. Comparisons will be performed by investigating the marketing communication efforts in each of the marketing communication dimensions outlined by Kotler and Keller (2006).

Advertising

Apple is a powerful company is launching online advertisement campaigns to reach the consumers. As shown in Figure 1 below, the websites of i-Phones is shown to be cutting edge, clean, clear and pleasant. The advertisement of Apple on the phone is consistent – always with white background – strikingly appealing to the consumers. Besides, Apple is never hesitating to highlight the advantages of the products to the target audience. The cutting edge advantages highlighted in the website include: face-to-face video calling, retina display, multi-tasking and HD video recording (Figure 2). There are simply no unnecessary messages or words or graphics in the advertisement, making it a clear message to the consumers on the benefits and features of the phone. This is one of the reasons cited by The Pak Banker (2010) that Apple able to surpass BlackBerry in mobile market in the global market.

Similarly, Samsung is giving significant emphasis on advertisement of Galaxy S as well. Figure 3 shows the website promoting the mobile phone – a dark blue interface as contrast to the pure white atmosphere delivered by Apple websites. As suggested by Businessline (2011) the mobile phone is promoted as something vivid, fast and slim. Indeed, in Computer Weekly News (2011), Galaxy S is promoted as the thinnest mobile phones, and the key advantages offered by the phone are explained clearly.

Sales Promotion

Apparently, both Apple and Samsung are not focusing a great deal on sales promotion. Perhaps that is because excessive promotion, particularly in terms of pricing discount may affect the brand name adversely in the long run. However, it can be observed that partnerships with other telcos are performed. Product bundling – subscribing to the services of certain telcos within a specified time period may get an i-Phone for great pricing discount is done. That is true for Samsung’s Galaxy S as well. Certain free gifts are available to persuade the consumers to try out the products.

Public Relations and Publicity

Apple is an outstanding company in utilizing publicity for free and yet powerful way to interact with consumers. As discussed and observed by Kazak (2010), it is found that the continuous news coverage about Apple products, particularly about i-Phones in the year 2010, has been able to produce a halo effects – that people feel that not having an i-Phone can be miserable. When more and more people have an i-Phones, people are pressed to having one as well, as people instinctively exhibit herding behaviors.

Partnership with other highly reputable company is also one way to enhance the brand name and to communicate the cutting edge technologies of Galaxy S. For example, Sunday Business Post (2011) has news related on Google using and recognizing the competitive edge and technological advantages offered by Galaxy S. Besides, in the popular magazine of computer hardware and software, PC world promoted Samsung’s Galaxy S as solid and speedy (Mies, 2011). Apart from that, especially in the year of 2011, the news about Galaxy S can be easily found from various newspaper or magazines, such as in Wall Street Journal (Boehret, 2011); The Economic Times (2011); and Businessline (2011). Apart from that, it can be seen that Samsung is utilizing social media such as Facebook to market its products. In the website of Galaxy S, visitors can choose to ‘Like’ the phone via Facbook, and at the time of this writing, more than 10 million of people ‘Like’ it around the world.

Events and Experiences

In Apple Stores, it can be seen that many people are playing with the touch screen of Apple. There are many funny games designed by Apple; and these games are played by the crowd and prospects customers. This is essentially one way in which Apple get in touch with the customers – and Apple will be considered as successful when the customers enjoy the games designed and find that the touch screen is fun and entertaining.

However, in contrast, Samsung is not really delivering such experiences to the customers. Apparently, Samsung is lagging behind is delivering fun experiences to the consumers. Customers have little ways to experiences the ‘fun’ or ‘something new’ experiences from Galaxy S.

Direct Marketing

Apple has an excellent Customer Relationship Management program. As a customer of i-Pod, I received emails about i-Phones whenever new launches or new models are available. This is essentially the direct email marketing techniques used by Apple, to get in touch with the previous customers. That is the case with Samsung as well – as long as someone is already sign up and had the email address recorded in Samsung databases.

Personal Selling

Although Apple does not employed sales person to visit prospects, the company does have friendly and highly professional sales person working in Apple Stores. As asserted by Coget (2011), the success of i-Phones (and other Apple’s products) is due to enthusiastic and insightful sales representatives in Apple Stores around the world. The employees are identified with Apple logo, and the Apple stores and environment is decorated with a sense of Apple’s culture. Such “Apple Stores effects” are argued to build strong customer loyalty worldwide for i-Phones.

For the case of Samsung’s Galaxy, there is no such thing as Samsung Stores Effect as there are no specifically designed Samsung Stores by the company. Thus, Samsung has to rely on the resellers for providing better services or to persuade the customers in trying out their products.

Discussion

The competition between Apple’s i-Phones and Samsung’s Galaxy S is expected to be intense. As of the date of this writing, i-Phones is still leading in most region of the world; but that market leader position in terms of growth is being challenged by Samsung’s Galaxy S. As reported by Business Wire (2011), in May of 2011, Apple’s i-Phones are overtaken by Samsung’s Galaxy S in Japan. Nonetheless, it can be seen that the competitive battle can be intense. Both companies have different ways to reach customers. In this report, it is found that Apple apparently has better formulated and delivered marketing communication mixes to reach the mass public. The key differences, and perhaps the key advantages offered by Apple is that – Apple Stores allows customers to experience the ‘fun’ of its products for the consumers.

Conclusion

As concluding remarks, it is observed that both companies have pretty similar marketing communication mixes. Advertisements are used, and websites are designed in an attractive manner to endure the customers. Direct marketing, particularly through the use of digital media, such as emails are performed by both companies. Publicity for both of the companies is abundance in various magazines. It is observed that Apple focus more on ‘fun’ and ‘innovation’ value proposition; while Galaxy S focus more on ‘advancement of technologies’, ‘solid’ and ‘speedy’. The marketing communication mixes of both companies are consistent, congruent and properly delivered to reach the marketplace with real impacts. It is definitely crucial for managers or marketers to learn from these outstanding companies.

References

Bajaj, K. (2011, 9 June). Samsung Galaxy Pop: A stand-out among weak lineup of smart phones [Hardware]. The Economic Times (Online), 36.

Boehret, K. (2011, June 15). A Slender Tablet With Widescreen Ambitions; New Samsung Galaxy Tab 10.1 Is Thinner and Lighter Than the iPad 2 but Lags Behind When It Comes to Battery Life. Wall Street Journal (Online), 19.

Bulik, B. (2008, October). APPLE. Advertising Age, 79(39), 29.

Business Wire. (2011, 24 May). Strategy Analytics: Samsung Galaxy S Overtakes the Apple iPhone in Japan. Business Wire, 18.

Businessline. (2011, June). The big banG! Businessline, 39.

Businessline. (2011, June). The world in your hands Samsung GALAXY S II. Businessline, 6.

Coget, J. (2011). The Apple Store Effect: Does Organizational Identification Trickle Down to Customers? The Academy of Management Perspectives, 25(1), 94.

Computer Weekly News. (2011, June). Wireless Communication Companies; Samsung Galaxy TabTM 10.1, World’s Thinnest Mobile Tablet, Makes Official Landing in U.S. Computer Weekly News,765.

Health & Beauty Close-Up. (2010, April) Communication Intelligence: Apple Marketing Efforts for iPad Emphasizes Company’s Advantage in Mobile Devices. Health & Beauty Close-Up, 31.

Kazak, S. (2010, 2 July). Amazing Apple marketing. McClatchy – Tribune Business News, 14.

Kotler, P. and Armstrong, G. (2004) Principles of Marketing, 10th edition. Upper Saddle River, NJ: Pearson Education.

Kotler, P. and Keller, K.L. (2006) Marketing Management, 12th edition. Upper Saddle River, NJ: Pearson Education.

Lazer, W. (1971). ‘Marketing Management: A Systems Perspective’. New York:  John Wiley & Sons.

Mehta, S., Maniam, B., & Leipnik, M. (2002). A Web-Based Integrated Marketing Communication Approach: An Exploratory Study. Allied Academies International Conference. Academy of Marketing Studies. Proceedings, 7 (2), 48.

Mies, G. (2011, June). Samsung Galaxy S 4G: Solid, Speedy. PC World, 29(6), 45.

Money Marketing . (2010). THE EXPERT: Goods vibrations. Money Marketing, 62.

Olof, H. (2006). Integrated marketing communication: from tactics to strategy. Corporate Communications, 11(1), 23-33.

Sunday Business Post.  (2011, June 19). Rise of the Androids. Sunday Business Post, 27.

The Economic Times. (2011, 14 June). Tech Queries: iPhone 4 vs Samsung Galaxy S II [Hardware]. The Economic Times (Online), 52.

The Pak Banker. (2010, March 8). India: iPhone set to surpass BlackBerry in mobile market. The Pak Banker, 13.

Wireless News. (2010, April). Communication Intelligence: Apple Marketing Efforts for iPad Support Company’s Advantage in Mobile Devices. Wireless News, 23.

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Business Case Study Shared from BusineSssessay.net

GLOBAL BUSINESS STRATEGY: A CASE STUDY ON DISNEY CORPORATION

Introduction

This is a report on Disney Corporation and its global business strategy in the international market. The global business strategy of Disney will be investigated, and studied, in order to ferret out valuable lessons to be learned from the successes and failures of Disney expansions to the global market. Firstly, it will be discussed on the rationales of Disney expanding to international market. Then, the methods or strategies used by Disney in expanding to the foreign countries will be articulated. It can be seen that Disney is becoming more aggressive and comfortable to participate in the foreign expansion, in terms of ownership of the business venture to a foreign market. Then, based on the historical development of Disney Corporations in the global market, the rights and wrongs; or the successes and failures of Disney Corporation in the international market will be discussed. After discussing and studying the historical successes and failures of Disney Corporation in the global market, various lessons on managing business across the globe will be discussed. These lessons are worth being paid serious attentions by business managers wishing to expand their businesses to the global market in the future.

Reasons Disney Expand to Global Market

There are many reasons that Disney Corporation wish to expand to the global market. Consistent with the theory, to expand to international market is beneficial because it will enhance market share for Disney, enhance brand reputation for Disney, increase revenue, and generate growth for the business (Griffin et. al., 2007), tap into bigger market (in the international context), and to diversify the businesses geographically (Lasserre, 2003). All these are rationales leading Disney to expand to the international context. Besides, it is also reasonable to believe that Disney indeed wishes to expand to the international market to duplicate its success in the foreign countries. The existing market (i.e., in United States) may already saturated and offer limited growth opportunities for Disney (Britt, 1990). Thus, Disney may as well decide to expand to other countries to bring the business to greater heights.

Methods Employed to Conduct Global Business

There are many methods can be used to expand to global market; among these methods include licensing, franchising, contractual strategies, strategic partnership and direct or indirect exporting. There are different methods employed by Disney to expand to the international market. Firstly, Disney expanded to Japan through licensing – the very fact that the management of Disney will only provide consultancy and advisory roles – overseeing the Disney park construction and to receive royalty income from its partner in Japan (namely, Oriental Land Company). However, such method is regretted as Disney in Japan is proven a great success later. Then, in expanding to France, Disney decided to participate more fully in park’s ownership and profits – through a joint venture with other investors on the company’s stocks listed in European Stock Exchange. Under the joint venture, Disney owned only 49% of the venture to France. Besides, a partnership and collaboration with the French government is also performed, whereby Disney received several assistance and incentives provided by the French government in opening the Disney park in France. Similarly, equity partnership with the local government of Hong Kong is made in the venture into Disneyland Hong Kong. In this venture, Disney corporations hold an equity stake of only 43%. Overall, it can be seen that Disney is more comfortable to participate on deeply to global expansion and venture. At first, the company use licensing methods to expand to Japan, but the company later rely more on equity partnership and some sort of strategic alliances with the local governments to enter to different countries.

Right and Wrong Moves of Disney

A review of the historical development of Disney found that the company has both business success and failures in global market. At the early days, the company was correct to expand to the global market, as international expansion is rational, considering that Disney has a strong brand name and popular cartoon programs around the world. The company is famous, and thus, by leveraging on the business reputation, international expansions can be made easy. This is proven through the correct business judgment of expansion to Japan. However, the other business expansion, such as to Hong Kong and particularly to France, cannot be considered as a success. Nevertheless, in the following section, the mistakes of Disney will firstly be outlined.

Not taking sufficient portion of ownership in profitable business venture. On hindsight, it is found that Disney is not making correct decision in using licensing as the choice of expansion to Japan. This is because the Japan expansion is a proven success, and Disney can only profit from the royalty income from the business venture in Japan. However, it is also understood that this is because the company is making first time business venture to the international market. The management has little experiences, and perhaps confident to foreign business venture, and thus, choose licensing as the entry mode to Japan, as that methods is one of the lowest risk of all international expansion techniques.

Not conducting market research diligently. However, across the international expansion, it is found that Disney is not able to conduct the research properly before venturing into any foreign market, as the expectations and estimates on business ventures to other foreign nations, such as in France and China were wrong and inaccurate. Apparently, the company had not conduct market research properly – and often, not comprehends the local culture, consumer behaviors and consumption preferences. Thus, many times, the value proposition to the local consumers are not formulated in the best possible manner, to fulfill the needs and wants of the local consumers.

Not selecting a strategic partner in foreign business venture. It is found that Disney has been repeatedly making wrong business judgment call in the foreign countries. This is probably due to the reason that the management has little experiences in the local context. As such, it is crucial and viable if the management to form strategic alliances with other party from the local countries, top tap into in-depth knowledge on the business landscape, societal values and preferences, cultural aspects and other necessary information in the foreign environment (Mellahi et. al., 2005). Not incorporating the wisdom from a local strategic partner may be causing Disney a great deal of losses, and indeed was making the business expansion venture a risky one (due to unnecessary speculation or wrong assumptions by the management that comes primarily from United States).

It is also found that Disney is making correct judgment in certain times as well. For example, the company is fast to realize the different needs and expectations from the different customers around different regions of the world. For example, after realizing that people in China are not familiar with the western cartoon characters promoted by Disney, the company is fast to change the traditional Disney character, to replace with higher degree of Chinese elements and characters. Apart from that, the company is also correct in partnering with local animation companies in Japan. The end result of such partnership is development of programs well favored by the Japanese consumers.

Besides, the company is also formulating and executing the strategic direction of the firm rationally. Consistent with the business theory, the company should be able to enhance the growth rate and prospects of the company by expanding to fast growing countries, such as to China and India. It is reasonable to expect that as these emerging countries growth, the people from these countries will enjoy higher purchasing power (Morrison, 2006), and thus, demand more of Disney products. All these will definitely contribute positively to Disney profitability and expansion around the globe.

Lessons Learned from Disney

Many lessons can be learned from the Disney story. Firstly, it can be seen that even successful companies with long term profitable track records in United States, may face many hinders and barriers in profitable expansion to other foreign countries. Internal business management is never easy, as it is much more complicated and challenging. The management must be equipped with several experiences, expertise and with proper expectations and understandings on what is necessary for successful business venture to foreign market. Of particularly important are the different cultural aspects in the different nations around the world. For example, people from the east and the west have different culture, and they may response differently to a particular set of value offering. Thus, in many instances, the successes of any business in a country may not be duplicated to other part of the world. Adjustment and adaptation of the local context is often necessary, as the best practices in the domestic country may no longer stay effective in another country (Stonehouse et. al., 2004). Not only is that, it is also found that consumer behaviors, expectations and consumption habits may different greatly across borders (Roedl, 2006). Thus, in-depth and insightful market research is necessary, before expansion to any part of the world. Unless the management understand the market deeply, to make other assumptions or to speculate on estimates of the business ventures to a foreign countries can bring a lot of risks to the company. It is found that in the case of Disney, for example, a lot of risks and the key contributors of business failures come from inaccurate understandings on the business landscape of the international market. Not only is that, it is also learned that the entry mode will have huge impacts to the business prospects and profitability of any company. The different entry mode have different advantages or disadvantages, and management has to be clear on their choices, as these entry mode will have long term significant impacts to the financial position and competitiveness of the company in the future. Over the years, it can also be found that the company is getting the mantra and best philosophies of managing and expanding business globally. The company increasingly buys into the idea of ‘thinking global, acting local’ in the business expansion context (Gannon, 2002).

Conclusion

Overall, it can be seen that expanding to the global or international context is never something easy. To duplicate the success stories or business models (from the domestic country) to the other foreign countries or markets is often not feasible, as the business landscape and market situation in the foreign market may no longer be similar. Very often, the cultural differences and the local societal factors such as consumers’ preferences, expectations, purchasing behaviors, consumptions habits or attitudes may differ to that of the domestic country (Goss, 2003; Lam, 2010). Thus, the successful business model, or even the existing value propositions may not be portable or transferred directly or completely to the new market or country. This is the key issues in managing an international business, and experiences or expertise on the cultural uniqueness or societal differences in the different regions of the world should be studied and understood. Only when that is done, the value delivered to the people in other nations can be adjusted to suit the local context; to enhance the probability of success and profitable business venture to a foreign market, while at the similar time reducing the risk of business failures.

References

Britt, B.  (1990, May). Disney’s Global Goals. Marketing,22.

Gannon, M. J. (2002).  Handbook of Cross-Cultural Management.  Oxford, U.K.: Blackwell Publishers Ltd

Goss, B. M. (2003). Understanding Disney / Global Hollywood. The Journal of Communication Inquiry, 27(2), 215-222.

Griffin, R.W., & Pustay, M.W. (2007). International business: A managerial perspective (5th ed.). New Jersey: Pearson Education.

Lam, S. (2010). ‘Global corporate cultural capital’ as a drag on globalization: Disneyland’s promotion of the Halloween Festival. Media, Culture & Society, 32(4), 631.

Lasserre, P. (2003). Global strategic management, New York: Palgrave Macmillan.

Mellahi, K., Frynas, J.G., & Finlay, P. (2005). Global strategic management, Oxford: Oxford University Press.

Morrison, J. (2006). The international business environment: Global and local marketplaces in a changing world (2nd ed.). Basingstoke: Palgrave Macmillan.

Roedl, S.  (2006). MICKEY AND MIMI: THE GLOBAL FLOW OF CULTURAL PRODUCTS. The Journal of Language for International Business, 17(1), 1-14.

Stonehouse, G., Campbell, D., Hamill, J., & Purdie, T. (2004). Global and transnational business: Strategy and management (2nd ed.). Chichester: John Wiley & Sons.

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