Free Term Paper About Successful Company Goes Global
An expatriate is a person who is temporarily moved to reside in another country for work purposes without having their citizenship. The skilled professionals of an organization working in another country are clearly defined as expatriates. The changing business dynamics and the rising trend of globalization are changing the way how organizations are dealing with their human capital. Multinationals have to manage their cross-cultural teams as well as their experienced and skilled professionals to work in their international organization (Experian White Paper, 2012).
Benefits and Challenges of Expatriates
The main need to develop global workforce and leadership has prompted an immense rise in global mobility. When the expatriates are sent to work and live in another country, they are given their standard salary along with additional monetary benefits such as family allowance, house rent, cost of living, health care and education costs etc. There are many organizations that completely cover the costs and expenses of an expatriate family such as children schooling, family health care. There are three main approaches that are used by every organization that intends to send expatriates to another country based on their balance sheet, destination or international organization. These approaches will define the amount of financial benefits that will be provided to the expatriates (Mark, 2012).
Many expatriates receive a range of benefits as compared to other employees. The expatriates receive relocation benefits which cover their cost of living. An expatriate is paid special benefits such as free housing allowance and other financial incentives in order to come stressful timings over that they might encounter during their stay in another country. The expatriates are provided with language training that not only increase their professional skills of employees that are sent abroad, but also help them to blend in the local culture and new working environment. Various training sessions and counseling is provided to employees before they depart which improve their skills as well as provide them with an opportunity to overcome the challenges abroad (Mark, 2012).
The destination that is chosen for expatriate also significantly impact the situation and circumstances that expatriates have to face. For example, countries like the United Arab Emirates and China are considered to be difficult destinations for expatriates whereas countries like Germany and Spain are easier to adjust in, and expatriates adjust easily in these Western European nations.
Some disadvantages or challenges of sending expatriates are that some employees might seek for new jobs once they work in other countries. According to research, more than 25 percent of the repatriated leave their companies once they are sent back to their country. This turnover is twice is much as that of employees who are not sent as expatriates. There are many different reasons for this resignation as some employees might not feel that they have anymore career in the company they are working for. Some employees feel that their home country and company has witnessed changes which make it difficult for them to adjust and become a major reason for them to leave their organization. The employees are not kept up-to-date with these transformations and also that employees have changed during their stay in another country. Therefore, expatriates have expectations from their company and family, and if these expectations are not met, they may resign and feel devastated (Mark, 2012).
Analyze the major factors that would influence your choice of countries into which your company would expand.
Many companies have understood the significance of an international expansion, which is critical to the growth of an organization. Since many companies have demonstrated their interest in investing in our organization if we expand, there are many factors to consider before expanding and deciding which countries to expand in. There are many countries that develop a positive view when organizations are willing to expand, and they are willing to provide license, distribution facilities, franchising options, partnerships, and alliances. This will help in becoming technologically advanced and also promote the business products internationally (Zang, 2015).
Geographic barriers, no longer stand in between, the company to expand if it has the resources to expand internationally. It is integral that business growth strategies must be developed around global vision and mission so that the quality, service, and overall distribution facility meet an international standard. There are many factors to consider when expanding into different countries:
Language barriers: Translating and communicating the marketing material into the local language of the country seem to be an easy task, but once it is implemented in reality it turns out to be the most difficult task. There are unforeseen difficulties and challenges that can be faced if the concept of the message is not translated well. It is imperative to ensure that product description, name and the entire concept is well understood, and a meaningful message is conveyed and is totally acceptable in the local culture and language (Zang, 2015).
Legal barriers: It is extremely important to understand the legal structure of the country in which an organization intends to expand. The customs laws, restrictions on import and export, various laws such as income and tax law along with the corporate organization are imperative to be studied well before hand before deciding the country of expansion. The most important law to study and comprehend clearly are the technology transfer laws that might prove to be difficult to handle and can change the course of business structure.
Marketing factors: There are many countries in which the marketing strategies are the toughest to handle, and the products may not receive the same significance and hype as in the local country due to cultural and religious issues. For example, the American taste of fast food may not be acceptable in United Arab Emirates or Asian country where they prefer more of spicy and local food rather than taste preference for fast food. There are various factors that may affect the cultural norms such as high operational cost and limited space available for the new venture in countries like Singapore and Hongkong (Zang, 2015).
Access to human resource management: It is integral to know beforehand the quality of the human resources that are offered by the country in which an organization plans to expand. The reason being not every country, especially like the third world countries do not offer a wide quality and quantity of highly professional experts and an organization must decide before hand if they have the ability, skills, and resources to send their expatriates to work for their international business set-ups.
The two countries that are preferred for expansion where expatriates can perform well and deliver their high performance is Spain and Switzerland. Spain is a country that is preferred by expatriates because of its relatively high temperatures and sunshine weather. The residents of European Union do not particularly require a work visa here so for them moving to Spain is relatively easier. The most important aspect of the job market of this country is that skilled workers are always in the job and are never jobless, such as language teachers, traders, customer service professionals, engineers, and doctors. There is more than 15 percent population of Spain that is based on expatriates that belong to foreign countries (Hilary, 2012). Another popular country for expatriates is Switzerland, which offers some amazingly exciting employment packages along with a high standard of living for an expatriate. This country is a great opportunity to work, especially for people who love to go outdoors as there are many recreational and skiing activities offered in both seasons. The standard of education is excellent and expatriates are encouraged to bring their families along with complete benefits offered to them. English is a widely spoken language, and the daily life is stress-free. The most important factor in this country is that an unemployment level in Switzerland is extremely low and when an expatriate move here he does not have to worry about job in case if he wants to leave his own company and apply in another organization (Hilary, 2012).
Three criteria that would be considered which employees to send abroad
There are three main aspects to consider when deciding which employees to send abroad:
The employee skill set and knowledge must match with the international job responsibilities, and the employees must be willing and ready to go and work on international assignments.
The second aspect to consider is the employee personality and how the employee is able to handle the pressure that occurs with international operations, change in culture and work ethics. When an employee is sent on an international assignment, he requires a lot of patience and flexibility to work as an expatriate and work on international assignments with foreign employees. An employee personality will play an integral role as there will be many aspects of his work operations that will not make any real sense to him, which will require his high tolerance level to perform his task patiently (John, 2005). An employee who is able to deal with the differences, understand and adjust to the changing environment will be an excellent choice to send as an expatriate. The employees who have previously worked as expatriates might be a better choice because they already have knowledge and ways to adapt to the cultural shock. Some people no matter how well they perform in their local organization are not suitable to work as expatriates (John, 2005).
Consideration of the health issues of employees who are being planned to send abroad is crucially important as it is a stressful job to adjust to a different culture, climate, adapt to the sleeping habits, viruses and bacteria that can attack the immune system for which pre-vaccinations are required. There are greater chances that expatriates and their families can get sick when they travel overseas, but it is important to ensure that each and every member is healthy, their immunizations are up-to-date, and they do not have any significant health issue (John, 2005).
Incentives that should be used to encourage employees to become an expatriate
Many expatriates receive a range of benefits as compared to other employees. The expatriates receive relocation benefits which cover their cost of living. An expatriate is paid special benefits such as free housing allowance and other financial incentives in order to overcome stressful timings that they might encounter during their stay in another country. The expatriates are provided with language training that not only increase their professional skills of employees that are sent abroad, but also help them to blend in the local culture and new working environment. Various training sessions and counseling is provided to employees before they depart which improve their skills as well as provide them with an opportunity to overcome the challenges abroad.
Recommend strategy to ensure that Board of Director is committed to expansion
One major strategy to ensure that both Executive Committee and the Board of Directors are committed to expansion is to enter into a formal written contract and to make expansion policies in integration with foreign companies that are willing to invest in business operations so that all final details are documented and both Board of Directors and Executive Committee follows an expansion plan.
Recommend two books that expatriates must take with them
One of the recommended books is written by Andrew Hallam “The Global Expatriate's Guide to Investing: From Millionaire Teacher to Millionaire Expat and was published in 2014. The reason for recommending this book is that it demonstrates the successful real life stories and mistakes made by expatriates when they travel to another country. This book is composed in a humorous way, so it does not get boring to read and provides a lot of information on how to make the best out of hard earned money. Another recommended books are written by James Wesley “Expatriates (The Coming Collapse) and was published in 2013. The reason for recommending this book is that it demonstrates the successful real-life stories of two families who struggled to survive in another country with major socioeconomic collapse. This is an excellent book to read as it provides examples, strength and energy to travel and face any possible hurdle.
Guideline for Expatriate for Travelling
The first important requirement in expatriate traveling is packing the suitcase for traveling. It is important that basic necessities must be packed, and there is no need to overpack the suitcase as the companies provide travel allowance through which any item that is missing in the package can be purchased easily. Some expatriates are lucky enough to have their own house which is already furnished when they reach their destination, but some might have to stay in a hotel for some time or might have to search their own house or flat on rent. It is important that international luggage information and requirements must be taken care of for example maximum weight allowed, number of suitcases, the list of prohibited items that are not allowed in the destination country (John, 2005).
If you are being provided with a furnished house, there is no need to take the furniture along, in fact, only the immediately required items can be taken along. It is recommended that the furniture must be sold if there is no place to keep it. If the company is providing with a car to accommodate the traveling issues, there is no need to take a car, but if an additional car is required for the family, it can be shipped.
Framework for Presentation on International Expansion
Statistics to expand into Spain and Switzerland and feasibility study
In order to expand in any country, it is important to check its political law and order situation, the macroeconomic situation, financial market, and domestic purchasing power. The reason to expand into Switzerland is that it has the most stable of all the factors mentioned above with the highest purchasing power and is considered to be the world’s richest countries with a GDP of US$ 53,367 in 2012. It is one of the most innovative country in the world. The market is advanced and extremely competitive, and businesses have to struggle to provide quality goods and services with good pricing. Heavy upfront capital investment is required along with patience and time to seek effective results of the expansion (UK Trade & Investment, 2013).
Spain is currently recovering from the Eurozone crisis. The economy is sustained by a rise in domestic demand, a rise in exports and the highest rate of tourism. The country has created more than 200,000 jobs in past one year with an increase in an annual employment rate in the past six years along with a drop in number of people who have been jobless since 2006. The government has released the latest figures of economic growth from 1.2 percent to 1.8 percent for the year 2015 (Ashifa, 2014).
It is feasible to purchase property in Spain as the interest rates are low, the rentals are high and the housing prices are declining to low historically which is encouraging the expanding businesses to purchase and built their own infrastructure than to pay rentals. On the other hand, the expats advise renting property in Switzerland than to make purchases. Even though the purchasing power is relatively stable, but there are many areas where rental is preferred over purchasing of commercial property or home (Property Wire, 2012).
The skilled professionals of an organization working in another country are clearly defined as expatriates. Many expatriates receive a range of benefits as compared to other employees. The expatriates receive relocation benefits which cover their cost of living. An expatriate pays special benefits such as free housing allowance and other financial incentives in order to overcome stressful timings that they might encounter during their stay in another country. Some disadvantages or challenges of sending expatriates are that some employees might seek for new jobs once they work in other countries.
Ashifa Kassam (2014) Why a little economic growth won't see an end to the pain in Spain, Eurozone Crisis, The Guardian, http://www.theguardian.com/business/2014/aug/10/spain-economy-growth-unemployment-recovery
Experian Marketing Services (2010) Going Global? The benefits and challenges of International location planning, The Experian White Paper, http://www.experian.co.uk/assets/business-strategies/white-papers/wp-going-global-international-location-planning.pdf
Hilary Osborne (2012) Where do UK expats live? The Guardian, http://www.theguardian.com/money/2012/nov/26/where-do-uk-expats-live
John M. (2005) A needs-driven approach to expatriate adjustment and career development: a multiple mentoring perspective, Journal of International Business Studies, 36, 519–538.
Mark Price (2012) Benefits, Challenges and Trends for Expatriates and Internationally Mobile Employees, Mercer, http://www.imercer.com/uploads/GM/webcasts/expatriate-benefits-webcast-120328a.pdf
Property Wire (2012) The future of buy to let looks bright as landlords expand their portfolio, http://www.propertywire.com/news/features/the-future-of-buy-to-let-looks-bright-as-landlords-expand-their-portfolio-and-new-investors-spark-mi-201210097024.html
UK Trade and Investment (2013) Doing Business in Switzerland, http://www.iberglobal.com/files/suiza_ukti.pdf
ZangFei (2015) New challenges for firms going global, China Daily, http://usa.chinadaily.com.cn/opinion/2015-03/13/content_19801729.html.
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