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PPQ Global Expansion

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The following paper will address the following scenario: PPQ Parts has determined that in order to successfully expand globally, it will be a great benefit if the managers are trained in multiculturalism, diversity management and are made aware of the political and economic concerns that may arise during the expansion. This will allow them to be properly equipped with the knowledge and required plan of action to handle such situations as needed.

Currently, there are many organizations that plan to become global companies in order to reach the international markets that have a need for the specific products and services provided. This form of expansion has also been identified as a necessity in order to for businesses to survive financially in the current economy. It will decrease costs for the company, open a new market for new ideas, and allow a more competitive position within the new market (Heizer & Render, 2012, p. 27). An international strategy will help to diversify and expand a business; therefore management should be trained and have a clear understanding on the multiple aspects, including multiculturalism and diversity management. It is important to understand the difference between multiculturalism and diversity. Multiculturalism refers to the acceptance or the practice of providing equal attention/representation to individual(s) from different backgrounds or minority groups (“Multiculturalism,”). On the other hand, diversity is defined as the differences between individuals, including but not limited to:


Socioeconomic status
Both are important to the PPQ Parts, especially in the growth efforts. Diversity in the workplace will allow PPQ Parts to remain competitive in the market. Multiculturalism and diversity training for management will create a better a better work environment; develop better employees for future leaders (Garcia). Trained management has the ability to address diversity issues locally and globally. What are some of the issues the host foreign country could face as a result of the expansion? During an expansion, there are many issues the host foreign country could face. These factors consist of social and cultural behaviors and laws (Heitzer & Render 2012). Other factors include both internal and external (Heizer & Render, 2012, p. 38). For example, internal factors can consist of the following: Human resources (Heizer & Render, 2012, p)

Physical resources (Heizer & Render, 2012)
Host country’s infrastructure (Heizer & Render, 2012)
These issues can include:
When human resource (HR) managers begin the recruitment process for filling positions for PPQ Parts’ international office, more than likely they will encounter cultural barriers including but not limited to language hurdles (Lewis). Another albatross HR may encounter is finding qualified candidates that meet the minimum education requirements, and convincing employees within the local office to relocate outside of their comfort zone. It is important that leadership of PPQ Parts have a clear understanding of the infrastructure in the new country and take the appropriate steps to assess how its reliability will impact the company’s success.

For example, the communication infrastructure is extremely important and should be taken into consideration and researched to confirm whether it is modern and reliable. Does it have the capacity, efficiency, and security needed in order to conduct day to day business. PPQ Parts management and field workers will require reliable networks for telephone, mobile, and data delivery. The status of the infrastructure also has the ability to affect the power (power outages) and cyber-attack vulnerability. Explain what cultural barriers and diversity issues are commonly encountered by international or multinational (MNC) and global organizations. One critical factor in international business is cultural differences in a global economy; therefore, in order to successfully reach astounding profitability, PPQ Parts will need to reconcile the differences between the cultures by utilizing cross cultural training techniques in order to acquire the needed skillset and knowledge to fulfill the role of cultural agents.

Cross cultural training is an advanced process used in order to promptly develop cultural intelligence and international competence. The combination will integrate the knowledge elements and behavioral skills required within a short length of time. Why has diversity become such an important topic in the international arena? As time continues, it is apparent that the strength of the economy rests on the ability to market and conduct business with other countries in order to remain competitive. Therefore, this requires companies to design products that meet the needs of individuals from multiple cultures and establish marketing strategies to sell the same products abroad. The marketing strategies will require a diverse team of negotiators and planners. Businesses that expand abroad become more lucrative in the marketplace and impact the countries per capita income.

In order for a business to remain marketable, the product, individuals, and marketing efforts must meet the desires of the potential consumers in a respectful manner. For example, when General Motors introduced the Chevy Nova to Spanish speaking countries, it is apparent marketing did not do the needed research. In Spanish, Nova means, ‘it does not go’; therefore, the product did not sell. It is important for a business to create a diverse team of individuals in establishing a product and marketing in order to meet the needs of the targeted market. What can occur when issues related to multiculturalism and diversity are ignored in an international company? There are multiple issues that can occur if multiculturalism and diversity are not taken into consideration. As previously stated, if the research has not been completed, the product will not sell if it does not meet the needs of the intended market. Countries abroad have different beliefs and work expectations than the United States.

If a company does not meet the expectations and respect of the host country by acknowledging all religious backgrounds and cultures, they will not be successful. Describe at least two political and two economic issues that may arise during global expansion and proposed methods addressing them. Political – In Japan and Germany, PPQ Parts may face legal and regulatory risks based on the primary nature of the company. PPQ Parts being an American company that practices based off of the known regulations, can be a challenge when required to comply with the regulations of the current country. The legal change may cause a delay in the company’s grand opening, but in the end, it will alleviate legal issues within the host country. The best way to execute the legalities, it is recommended PPQ Parts hire the host country’s legal team in order to assist with the regulations. Corruption is a political issue that may arise during global expansion.

PPQ Parts should practice the current laws of the host country as well as the laws that have been put in place by the United States that address the practice of corruption in other countries. Economic – Competition is an issue that may arise. Although PPQ Parts is currently in a location where they are the only distributor of parts and they are found to be successful, it may attract a competitor. In the event of competition, PPQ Parts will have to decide whether to compete with price or make the decision to relocate to a less competitive area where they can again regain their advantage. The best way for PPQ Parts to address this issue is to proactively focus on the quality of the product, continue to build solid relationships with consumers, and to prepare future marketing plans in order to remain successful in the noncompetitive market as well as establishing a reputation in the future competitive market. The second economic issue that may arise is the supply and consumer demand.

The company, Toyota opened an assembly plant in the United States based on demand from the consumer. This action has shown to be successful based off the sales reports for United States sales. Just as Toyota made the decision to expand abroad, PPQ Parts should take the time to research and visit multiple markets to establish the required rapport and once the next market is identified, make the most cost effective way of entering the new market. In order for PPQ Parts to successfully expand globally, it is vital this company possess cultural intelligence in order to be productive in the host country. This level of intelligence will allow PPQs workforce to remain within the required boundaries and respect for the targeted marketplace and continue to be competitive within the marketplace.

Corruption putting the brakes on eu expansion. (n.d.). Retrieved from http://www.dw.de/corruption-putting-the-brakes-on-eu-expansion/a-15922774-1
Expanding the global fight against corruption. (2010, December 9). Retrieved from http://www.commerce.gov/os/ogc/developments/expanding-global-fight-against-corruption Garcia, R. (n.d.). Importance of diversity training for managers. Retrieved from http://www.ehow.com/about_6218851_importance-diversity-training-managers.html Heizer, J., & Render, B. (2012). Operations management. (10th ed.). Upper Saddle River: Pearson Education, Inc. Retrieved from Joseph, C. (n.d.). Advantages of global companies. Retrieved from Lewis, J. (n.d.). What are the cultural problems encountered by multinational companies?. Retrieved from http://www.ehow.com/info_12199203_cultural-problems-encountered-multinational-companies.html multiculturalism. 2010. In Your Dictionary.com.

Retrieved August 31, 2013, from http://www.yourdictionary.com/multiculturalism

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