Why might it take longer to establish your business

Reference no: EM133710278 , Length: word count:250

The Pitfalls of Globalization

In Prichard's article in this week's materials, he quotes Robert Salomon, a professor of international management. Salomon says: "The problem is that managers systematically overestimate the benefits of globalization and underestimate its costs." With this comment in mind, think about your company and the overseas country you chose to research in this course.

Imagine that your company's executive team has decided to expand to the target country that you researched, whether you recommended this course of action or not. Then read and reply to each of the prompts below:

Remind your peers what company and product, and which overseas country you chose for your assignments
Will your company's existing business model work in the overseas target country? Why or why not?
What are the major differences between the culture of your home country and your overseas target country?
Why might it take longer to establish your business in the overseas target country than your managers expect?
What advice would you give to the project lead on how to prepare for expansion into this overseas market?

Here is the classmate to respond too:

Professor Soranno & classmates,

Product/Company:

I selected college degrees as my product within Strategic Education (my company) and expansion into India by purchasing a higher education institution within this new market/country.

Will your company's existing business model work in the overseas target country? Why or why not?

If this question had been asked five-10 years ago the answer would be no, but a lot has changed in India regarding population growth, industrial growth and higher education opportunities. The current business model for Strategic Education is to offer career-oriented curriculum in areas such as health care, IT, Business, and the service industries. The model revolves around attracting students seeking practical skills and credentials for specific professions and extending access to quality higher education opportunities to increase earning potential. The goal of SEI is to generate revenue through charging tuition fees for their educational offerings.

Our target country to expand in is India however the above model would not have stood up well in India the last 10 years given the highly regulated framework in the country that favors non-profit education. Recent statistics show that India has the second largest higher education system worldwide (Gupta, 1). The demand for higher education is rising so quickly that the country cannot keep up on demand through just government supported institutions alone, so they are starting to ease up their regulations and allow private sector institutions into the playing field (Gupta, 1).

What are the major differences between the culture of your home country and your overseas target country?

Regarding business cultures, the concept of hierarchy is strong in India, but in the United States job titles are flatter and the culture emphasizes individual initiative (Kumar, 2). Communication styles are different as well with India relying on indirect cues and using gestures to communicate anything of significance, the U.S. focuses on direct communication and values openness and clarity (Kumar, 2). India strongly values family and emphasizes the importance of close-knit family bonds including strong moral values such as truth and nonviolence (Kumar, 2). The U.S. has strong values in individualism, freedom, and equality, including personal autonomy, self-reliance, and achieving individual goals (Kumar, 2). India values a strong work ethic and working long hours to get work done whereas the U.S. focuses on work-life balance (Kumar, 2).

Why might it take longer to establish your business in the overseas target country than your managers expect?

Because of the differences in cultural values and communication styles, this could create challenges in establishing an educational facility or buying out an institution in India. Communication styles are different, so it is important to emphasize indirect cues and be aware of them when communicating with leaders in India. A leader in India could misunderstand the meaning of one of the U.S. business leaders and this could delay progress. Business levels are also seen differently in India which is something to understand when working across cultural lines. The U.S. focuses on flatter setups compared to India so focusing on which leaders are speaking and in what context will be important to factor in to avoid delays in progress. Finally, the different work styles could create issues with progress towards expansion into India given India's work culture focuses on hard work and long hours while U.S. focuses on work-life balance. This could be considered "lazy" and India leaders may not buy into this style unless the U.S. focuses on hard work and sets aside their standard work-life balance value.

What advice would you give to the project lead on how to prepare for expansion into this overseas market?

First, it will be important to understand the cultural dynamics and how to effectively communicate with leaders and government officials (given education is highly regulated there likely will be a need for communication with these groups). It is critical to align principles on higher education and ensure that a common goal is understood and that the missions of the organizations align if looking to partner with an already existing institution. An issue many leaders make is thinking that consumers will respond to a product in a new country the same way as in the home country and with cultural differences this is not the case (Skipprichard, 3).

Second, clearly understanding the policies and regulations in India related to higher education will be critical to ensure that there is understanding on how to proceed and that the U.S. leaders are clear on expectations, parameters, and what to factor in when making business decisions.

Finally, clear communication, without being direct, and clear role identification will be needed to ensure that leaders in India understand how the U.S. leaders operate and are structured and there is trust established right away between leaders. Understanding that the communication is different in India as well as the business hierarchy is important to establishing strong business relationships.

Reference no: EM133710278

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