Operations Management: Managing International Term Paper

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shifting rapidly to the third world. This is also causing a whole lot of people to get upset with the management of these industries. One of the famous ones in this regard is the Nike Shoes. One should be careful not to collect a bad reputation as they have done for use of child labor (Azam, 1999). Certainly no international organization would like to get that sort of a reputation for the goods and services of their foreign outfit.

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The next question to be dealt with is quality control. Needless to say, quality is the hallmark of an organization and it cannot be sacrificed under any circumstances. Ultimately, the organization is identified with its product, and no organization should follow a short-term strategy of lasting out in the back of beyond with an inferior product if they are getting kicked out of the home country because they cannot keep up with their competitors. It is better to get out that product line and concentrate on other products, and if necessary to even sell out your own factory to your competitors who may be able to run it better. An organization is like a human being- it is born, grows, develops and unfortunately, it also dies. It may be possible however that you may have products which you cannot produce in the home country due to cost constraints. In that case you take the production abroad as already discussed earlier. Bit, your product carries your name and image, and it must carry your quality. After all what are brand names built on?

Term Paper on Operations Management: Managing International Operations Assignment

The next question is what capacity should the foreign unit have? This will primarily depend on the objective the foreign unit has been set up with. If it an old unit taken over, then it will have a predetermined capacity. It may be advisable to first stabilize production before increasing production. Naturally the important question here is the staffing in the old unit. This may have been too high. A lot of the owner's relatives may have been working in the old company. The new owner will obviously have to get rid of them first. This is easier said than done - and, may cause a lot of headache. It is better to get it over with before setting up the new pattern. For a new unit, or a stable unit, it is useful to import the same machines and production processes that one has in the international company. Then the production levels have to be gradually pushed up, in the manner discussed earlier. Again the importance of the personnel policy and the knowledge of the culture in the foreign country come up.

Next is the question for the location of the foreign unit. Here we have to naturally assume that the new unit will be a Greenfield unit. The location for any unit in any country is based on certain factors like the ports for importing raw material if needed or for exports if the finished product has to be exported. The importance of the distance from ports will depend on the proportion of this transport cost to the price of the finished product. In some cases this may make it necessary to locate it at the port city itself. These costs are well-known to the international company and it should not be difficult for them to decide on this. Another important question is the climate and the requirement for a suitable climate for production of the product if it is required. Again, the international company knows this fully well and should be able to easily judge this.

The only question that the international company cannot naturally know is the socio-political factors that may be associated with the decision. In some countries, different regions have different work ethics and people in certain regions may be better potential employees than people in some other regions. The other aspect is the chance of the new project surviving the political battles within the foreign country. We all know the importance of Godfathers and Godmothers and they are present at important ceremonies of the child. As I have said, the new unit also is a child and must have the Godfather. Otherwise, the enemies of the unit within the country, meaning people whose financial interests have been hurt, or are likely to be hurt by the new unit (competitors) will try their best to kill the child. For this purpose, one must select a good Godfather. Employment is required in every region of the world by the politicians - it helps him to get reelected. So, every politician will want a new unit in his own territory. The international company must decide on whom to please. Ultimately, this may be the difference between success and failure.

Another question is the layout strategy for the new plant. For an old plant, there is little by the way of layout that you can do unless it is really badly designed. For this, the layout of the original plant is most important. Normally all plants have a layout. Even the international company will be having a layout for their home plant. This would have given rise to some praises and some brickbats. The new plant can be set up in such a manner that the praises are increased and brickbats reduced. This is essentially a plant layout decision to be taken by the technical experts. It is however important that the international staff can cover the plant easily and oversee all the important functions. They may require a lot of this initially. Otherwise, a group within the factory may spring up who would like to think of themselves as interpreters of management decisions. This is a dangerous situation to have. In the beginning of the association, the workers will tend to trust their own countrymen more than the "foreigners." Over a period of time, the international staff will build up the faith, but in the beginning they should be very visible and approachable.

Last we come to the question of human resources and job design. This is probably the most important part of an international operation. The behaviors of people in different countries vary with regard to the same job. To understand this aspect, studies have been made on different clusters of countries with similar sets of beliefs and values or culture. In management terms, culture has been defined as the collective mental programming of the people. (Hofstede, 1984) This definition arises from the fact that people within a particular country have similar education and life experience. The important factors in this work culture is said to be dependent on four variables. The first of these variables is the readiness of the individual to accept differences in the allocation of power to individuals, or the acceptance of authority of another person. We can also see this in the society and not only in companies.

The second of these variables we have already mentioned in passing - this is the question of uncertainty avoidance. This is the limit of the faith people in a society or group will have in situations which they are uncertain about. This will be always the feeling about a new company. They will feel that they do not know enough about the international group to be able to trust it. The other two parts are mostly psychological: individualism vs. collectivism and male values vs. female qualities. Many societies or even groups of people in countries have high group relations. This is when traditionally they have been associated with groups of people for their livelihood. Examples of people who would be very concerned with groups would be sailors. Normally they are very dependent on each other. Other groups like say prospectors mostly work alone.

Certain countries have people following certain occupations for generations, especially countries with a high agricultural population. The masculinity femininity differences are mostly individual but also to a certain extent cultural like the differences between the English speaking people and the Latinos. Any international business must recognize these traits within the foreign country and mange this difference with the culture of the home country of the international company. This also suggests that in some countries the setting up of a foreign owned international company is more likely to stir up competition form within the foreign country. This aspect also has to be carefully looked into.

It is surely obvious that a domestic company only employs nationals of its own country, whereas an international company may have three categories of personnel. The first will be from the "home" country of the international company. A second set may be from the "foreign" or host country. A third set may be drafted to work from a third country that is neither the home country nor the host country. An example would be a German working in Switzerland for an American company. Normally this is true of only managers. The workers would normally be natives… [END OF PREVIEW] . . . READ MORE

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