Showing posts with label Business. Show all posts
Showing posts with label Business. Show all posts

Tuesday, October 22, 2013

Strategic leadership is the process of directing and offering a vision for improving organizational performance. It is strategic management of implementing a strategy for managing change and creating a sense of direction in the global competitive business. Effective leaders should provide a strategic direction for transforming the organization in order to achieve success. They should analyze the significant initiatives to be taken by the top leaders in the company, and integrate resources in order to create organization change. Denis, Langley and Rouleau (2010, p.67) argue that strategic leaders should change their skills through implementing unique strategies that will enable them to meet the demanding needs of an organization in today’s changing business world. Michael Porter and Gary Hamel offer varied disciplines that managers or leaders should practice in order to achieve success in the global changing business. Therefore, they have employed varied approaches to the paradox of the market and resources, but organizational circumstances or the changing business world affects the choice of strategic leaders when employing their approaches.

Porter and Hamel offer varied approaches that strategic leaders should follow, but some of their approaches would affect the choice of strategic decisions because of the ever changing business environment. One of the approaches employed is the industrial organization in achieving a competitive advantage in a business entity. Hamel, the American economist in management came up with a core competency management concept in order to achieve a competitive advantage. This concept takes varied forms including technical matter of knowhow and close relationship with clients.  It also takes into consideration product development or cultural aspects through employee dedication towards creating a successful business environment. The core competency strengthens the industrial relation with other organization and offers fundamental basis for adding value to products.
Moreover, Hamel emphasizes that the core competency should enable strategic leaders to employ asset of effective skills or design techniques in order to deliver value to their clients. However, the core competency may affect the deliberate decision of leaders in the current business setting. This is because many companies are nowadays employing customer value approach as a way of achieving a competitive advantage. They emphasize on creating product value that satisfies the needs of customers; thus enabling them to become leaders in the global market (Pongsakornrungsilp and Schroeder 2011, 319). Hamel emphasize that the core competencies contributes to the advancement of worth products that meet the needs of customers. The core competency is effective because it is developed continuously with varied organizational improvements overtime.

Hamel further use the industry organization approaches in explaining the way strategic leaders can achieve the core competency. The industrial organization method is a based on the financial theory which deals with competition, distribution of resources and economies of scale issues. The hypotheses behind these approaches are the rationality aspects, profit maximization and self discipline behaviors in the work environment. This approach is essential because leaders in the current changing business environment should understand the core competency in an industry. They should predict the future challenges and business opportunities in order to help them stay top in any varying business situations. Hamel reveals that the core competencies are developed through constant changes of brands in order to meet the demanding needs of customers in the changing business world. Therefore, in order for organizations to succeed in the emerging global market economy, they should create the core competencies instead of vertical integration (Masterson and Pickton 2010, p. 211).

Another approach is the sociological approach and deals with the issues of human interactions in an organization in order to create an effective business environment. The rationale behind this approach is the bounded rationality and satisfaction behaviors with an aim of creating organizational success. Hamel attempt to reveal effective management is a significant tool for mobilizing resources to produce effective results. The management model date back to the 19th century. It was designed with an aim of solving overriding problem in the business environment. It takes into considerations the way leaders can increase organizational efficiency, but this model is challenging in the changing business world. Therefore, strategic leaders should reinvent management in a manner that can make organizations to employ innovative approaches and inspire employees to become productive (Lipman-Blumen 2000, p. 69). Hamel tries to reveal tools that successful leaders should utilize to mobilize resources to achieve significant result is the business environment. Therefore, employing management tool and improving the capacity to manage resources will contribute to successful organization performance.

The most influential strategy for achieving a competitive advantage was developed by Michael Porter. The five forces analysis became the common strategy for shaping the strategic business environment in order to achieve a competitive advantage. This analysis is similar to SWOT analysis in terms of structure and function. They reveal the way an industry can apply them to achieve sustainable business competitive advantage (Armstrong, Kotler and Armstrong 2011, p.34). The 5 forces analysis is a framework employed for industrial analysis. They are employed under the industrial approach to reveal the way strategic leaders can compete with their competitors in the global business environment.

In addition, the five force analysis draw upon the industrial organization economies towards determination of the competitive intensity; thus attracting marketing activities. The market attractiveness in a real context means the achievement of increased industrial profitability. Every industry strives to achieve a competitive advantage in order to increase their profits. This is because the main aim of the industry is to maximize profits through offering effective services that will enable them to achieve a competitive advantage.  Therefore, Porter reveals the way strategic leaders can employ industrial organization approach to create a competitive business environment; thus increasing revenues. Unappealing business would become pure competitive, and they would attain standard profits.

Porter’s five force analysis used in the industrial organization approaches is viewed from the external forces. Others are vied from the internal threat aspects, but the most preferred forces are viewed from the micro-environment in contrast to the macro environment. These forces are close to industrial activities that may affect the ability of strategic leaders towards making effective decision of serving customers. Many strategic leaders in the cotemporary business environment employ Porter’s five forces with an aim of achieving a competitive advantage. For instance, many companies such as MacDonald and other American corporations employ this approach in analyzing the business industry; thus determining the internal and external factors that may impact effective business performance.  The change in any of the forces may affect strategic decisions of leaders because of the ever changing business world. Many industries examine the internal and external environment in order to implement effective strategies, which will enable them to respond to any impacts affecting effective business performance.

Dess (2012, p. 79) argues that industries apply the core competency and employ effective business model in order to achieve high revenues above business average. For instance, the case of the airline industry is one of the companies whereby leaders apply unique business model to achieve high profitability. The business model examines the underlying principle on the way business can deliver and generate value as well as other forms of value. The business model is part of strategic a management employed as a business strategy for achieving organizational needs. It takes into considerations the core aspects including the organizational structure, business practices and organizational policies. Although, business model employed in the business industry man affect the strategic decision of managers, but leaders need to align them with the changing business world. It is significant to employ particular business strategies or models that can create value and capture the mechanism employed in an entity.  Therefore, it should define the way through which an entity delivers value to customers (Gronroos 2010, p.12). It will also reflect the hypothesis of management on things customers want and the way organization will deliver the services.

The five forces of Porter are based on the industrial organization approach; thus t erection of SWOT analysis became popular in the contemporary business world. This concept has been used in a wide range of solving business problems in order to help industries achieve high profitability and stabilize business environment. For instance, many companies employ SWOT matrix, which is structured approach for evaluating or analyzing the strength, weakness, opportunities and threat impacting effective organization performance. The SWO analysis can impact the strategic decision made by organization leaders, and it takes into consideration the product, environment and people. Brassington and Pettitt (2003, p. 89) argue that SWOT analysis is one of the effective approaches for analyzing the internal and external environment; thus enabling organization leaders to respond faster to organization needs. This is essential because it enables an industry to implement proper strategies for achieving competitive advantage. The decision makers should carry out analysis to determine in case the stated objective would be attainable prior to use of SWOT analysis. This is because of the changing business environment; thus SWOT analysis users should generate effective answers that will generate meaningful information.

Dessler (2012, p.34) reveals that strategic management as a bottom up approach or collaborative approach is vital for managing and improving organizational performance. Organization employs different approaches such as collaborative approach in leveraging the advancement of information technology. Other employ bottom up or top down approach meet the organizational needs. The research study indicates that knowledge management in any organization is crucial because it enables managers to manage organization information and create a common objective towards successful organization performance (Daft and Dorothy (2012, p.122).  Although strategic divisions may impede the process, the notion of strategic management through proper integration of strategy formulation creates successful business performance in the global business world.

Kotler and Keller (2005, p. 123) reveal that managerial work is increasingly a leadership task and leadership task operate through a complex web of dependent relationships; thus managerial worth is increasingly becoming a game of informal independence. Therefore, the leaders in the current business atmosphere encounter diverse challenges in managing organizations. Even though, they have effective leadership skills, it is often difficult for them to address organizational issues unless they implement effective strategic or approaches towards effective decision making. Leaders should encourage their followers at all levels to integrate their inventory and resources for effective business growth or success. Porter reveals many strategies that leaders should employ in order to become successful. However, in the business a changing world, leaders need to change their leading and strategic skills in order to align with the changing business world.

Moreover, many economists constantly emphasize that people are the most valuable resources in an organization and their effective performance is the key towards organization performance. Therefore, leaders should employ effective strategies that can enable them to manage people as organization asset; thus enabling them to become productive. Northouse (2007 p, 78) reveals that leadership strategy should be related to the organization strategies or goals. They should join the values of the business and the organizational objectives as well as the culture of an entity. Organizational culture is critical aspects that can impact better organizational performance in case leaders do not take it into considerations effectively. Therefore, strategic leaders should emphasize on organizational culture and offer training programs to enable people meet the organizational needs effectively.

Young and Burgess (2010, p.115) argue that technology advancement has contributed to varied ways through which many organization perform business to achieve a competitive advantage. Many industries nowadays utilize technology in order to create value for both product people and other organizational resources. Although, Hamel and Porter attempt to emphasize on the core competency and varied approaches of improving performance, globalization has affected the way many business perform their business. Many industries attempt to integrate technology with an aim of improving value and increasing productivity. However, many of them lack effective skills on the way they should integrate technology to create a competitive advantage. For instance, numerous companies use electronic marketing in order to reach customers and reveal to them the brand products they offer in the market. However, due to poor integration of technology, many of them have ended up operating at high cost; thus failure to achieve successful business performance.

The use of industrial organization and sociological approaches are effective I business performance, but they may affect the strategic decisions employed by management leaders. This is because leaders have varied skills and other employs their own strategies in managing organizational resources. The business environment is changing every day; thus leaders are also making efforts of implementing innovative ideas in order to create a successful business environment. Therefore, effective leaders should set effective goals and manage people because they are a significant asset for creating organizational change.  Hellriegel and Slocum (2010, p. 33) argue that successful leaders can motivate followers and create a smooth working environment. This is essential because it will enable employees to work effectively towards meeting the demanding needs of customers; thus contributing to achievement of competitive advantage.

In conclusion, Porter and Hamel’s approaches to market ad resources are effective, but they affect the strategic decision of leaders in the changing business world. This is because leadership decision is dynamic and it changes depending on the changes in the business environment. One of the approaches put forward by these two management economist is the industrial organization approach. This is where they emphasize on the core competency concept in order to enable organizational to achieve a competitive advantage. Many organizations strive to achieve competitive advantage; thus many of them employ the five forces of Porter and Hemel’s core competency concept in order to improve organizational profitability.  Another approach is sociological approach, and this involves effective interaction with people through employing significant management tool; thus achieving effective organizational performance.
The increased competitive which result due to increased technology contributing to a global village have encouraged financial analysts, regulators and lobbying groups to take significant interest in the market system. The accounting standards has created an ongoing debate as to whether accountants should regulate or set accounting standards or not. Thus, accounting standard settings has emerged as a language of business; thus new accounting regulations have been set in many government institutions for financial accountability. Varied aspects including the social, economic and political factors are shaped by the establishment of accounting regulation standards. This is because accounting regulations are needed for varied considerations including social, political, as well as, economic and market needs. The policymakers believe that the government should regulate standards in order to protect investors against market risks. However, there exist non-regulatory approaches known as the free-market approaches, which determine the accounting information and regulation in order to meet the interest of the public. Thus, the study attempts to examine varied approaches to standard setting in accounting including the free market approach, regulator, as well, as illustrates the applications for such approaches.

Literature Review
Varied literatures have attempted to provide systematic and clear understandings of accounting standard setting in regard to financial accounting standard setting. There is an ongoing debate that market should work freely, but the government should intervene and create regulatory standards to protect investors from encountering risk in the market. Therefore, this part offers an analysis on the way the previous scholars have attempted to argue about by developing varied approaches to standard setting in accounting including the free market and regulatory approaches. However, there have been a considerable debate over the accounting standards and some issues have been raised including the politicization of accounting standard setting for the concerned parties involved (Horngren 2006, 51).  The debate on the advantages and disadvantages of accounting regulation standards settings is a realism of accounting setting. Thus, Britton and Waterston (2006, p.71) proposed varied limitations and benefits of accounting standard settings whether regulatory or non-regulatory, hence these can be based on the restructuring the accounting standard setting process. The literature offers critical assessment of varied approaches by illustrating relevant applications for such approaches.  

Free-market Approach
The literature determines the free market approach as a non-regulated approach, which argues that the market and its mechanisms should determine the production of accounting information and regulation according to its needs (Papadopoulos (2011, p 6). The regulatory activities in the economic environment affect directly the accounting practices of entities across the globe. According to Deegan and Unerman (2011, p. 79), accounting standards are perceived as fiscal goods, which the interactive forces of demand and supply impact directly in the free market economy. The underscoring assumption for the free-market theory is that market forces may create an equilibrium optimal magnitude in relation to the concerned demand of customer within an entity. Therefore, the fundamental argument behind this framework is that entities do not need fiscal accounting regulations because market forces of demand and supply will unveil the equilibrium optimal accounting information. The proponent of free-market approach including Watts argued that there should be adequate incentives from the necessary organization to furnish stakeholders with reliable accounting information of the organization. This accounting information will signal to shareholders with adequate and reliable information, which human resource managers are utilizing to increase wealth and maintain operating cost at the minimum level.
Many scholars argue that market regulates accounting standards are connected to the demand and supply needs; thus accounting standardization originates from the lobbying groups or interested users who wish to manipulate the market for personal advantage (Alexander, Britton and Jorissen 2007, p. 72; Brants 2003, p. 52). The aforementioned scholars further argue that the market would be more effective in case there is lack of a state regulatory interference. The work of these scholars justifies their proposal of market regulatory approaches, which is supported by agency theory. Chambless and Chambless (2005, p. 56) define agency theory as a framework that links the principal and an agent in which the principal entrusts his assets to the agent who manages it on his behalf. Deegan and Unerman (2011, p.52) added by arguing that there is a need for an optimal arrangement by which the agent costs should be minimized through the operating market mechanisms.
Additionally, the agency theory recommends that entities should have incentives to release accounting information generously. For instance, the Australian and British companies voluntarily issued financial statements in the earlier 19th century because of lack for standards to prevent such publications. This disclosure benefited them because they incurred lower capital costs, which granted these entities access to gain capital funds in the Market (Carlson 1997, p.370).  Consequently, Khadaroo (2005, p.82) revealed that some few companies in the United Kingdom disclose their cost of sales due to lack of legislative provision demanding disclosure for gross margin figures. Deegan and Unerman (2011, p.57) argue that the proponents of the free-market theory based on the agency theory affirms that “the natural conflicts are likely to evolve between the managers and shareholders”. This is because managers may seek to act upon their own interest; thus private and associated financial reporting is vital because it will reduce conflicts of interest.
The proponents of the free-market theory also argued that positive accounting is an effective theory for maximizing profits in the free market economy (Watts and Zimmerman 1986, p.71). According to Stigler (1998, p. 83), positive accounting theory is a framework that attempts to predict real world events and translates them to accounting practices. The role of positive accounting theory is to explain and predict actions such as the preferred accounting policies that a firm can choose. This theory also explains and predicts the way a firm can react or respond to the newly proposed accounting standards. Under this theory, accounting practices emerge to alleviate contracting costs through establishing an agreement between different parties (Amstrong 1971, p.101). For instance, absent conservatism and compensation agreements made can reward human resource managers basing on the present account reports. The assumptions for the positive accounting framework include the debt agreement, bonus plan and political cost assumptions. Therefore, to achieve positive accounting, managers or financial analysts or the lobbying groups should change their accounting policies, manage discretionary accruals, change real variables, capitalize operations and adopt new accounting standards in a timely manner.

Regulatory Approach
    Regulatory approach is advocated by the policymakers and this approach has been a centre for debate as to whether it should be implemented or not. The policy makers believe that by regulating the financial market in entities, they can safeguard the interest of the state. It is also one way of providing security to investors and protecting them against financial risks; thus attracting higher economic investments in the country. Foster (1980, p.31) argues that the regulatory approach is justifiable because it safeguards the interest of investors. However, the analogous public interest justification for the regulation of business have been heavily criticized and failures of this regulations have been revealed including regulation failure of the policy to the interested regulated entities and high cost of operating regulatory mechanisms. Regulation approach in the broader sense denotes governing the way in which public activities are decided upon and implemented (Kenneth and Rita 2006, p.21). Regulatory approach has taken a more specific meaning of achieving the interest of public and goals of investors through formulating regulations of standard behaviors backed up by the sanctions of the state. Therefore, varied approaches have been developed with regard to achieving the needs of the public.
    One of them is the public interest theory and this is a regulatory approach that simply focuses on the interest of the public in order to achieve the welfare of the state. According to Horngren and Harrison (2008, p. 65) public interest theory is defined as the interest of individuals by free markets in which there is voluntary exchange of commodities and services without market distortions. The regulations are formulated with an aim to correct market distortions or market failures, which may hinder the public from achieving their interests (Riahi-Belkaoui 2004, p. 92). There are numerous market failures such as externalities where prices fail to reflect social cost or benefits, monopolistic activities, which restrict competition and informational problems. Therefore, regulatory approach in this case aims to correct such market failures in order to bring about improvements to generate the well being of the state.
    The second is the capture theory and this is a regulation framework that offer an insight into close relation that rise between the business entity and the government regulatory agency. Capture theory also aims to meet the interest of the public or consumers; thus the government agency amount power to the business industry in order to shape the interest of the public (Holmes, Bromiley, Devers, Holcomb and McGuire, 2011). Regulatory capture unlike public choice theory is a risk to the agency and it is worse than any other regulation. This is because regulatory capture exercises the government authority over the business industry but even so, this regulatory approach is effective because it increases transparency of the agency involved.  For instance, consider a bureaucrat agency in one of the manufacturing companies including Shady, Sundial and Grass Valley. Therefore, the capture regulatory was established to ensure that these industries manufacture safe and high quality commodities. They also make sure that the agency also ensured that the firms do not monopolize their market.
McLeay and Riccaboni (2000, p. 121) explore the tension between the power of the state and market forces, as well as, offer varied political dimension aspects to accounting regulations. The authors analyze the significant roles that standard setters play in setting accounting standards vital in a free market economy. In the contemporary competitive business environment, companies must seek innovative means for rapid and sustainable growth, not by just surviving but thriving, in the competitive business world (Clayman, Fridson and Troughton 2012, p.23).  Therefore, employing regulatory approaches and corporate financial approaches to financial analysis is one way through which financial analysts and investors can achieve their business objectives effectively.

Case Study
There are varied real world examples and case studies that have been provided by many scholars on varied approaches to standard setting in accounting. Dye reveals some case studies in order to provide the readers with a concrete understanding or real-world issues for critical business growth (Dye 2001, 221). Coggins (1998, p. 102) argues that government intervention is necessary in any business activities because they protect the public from exploitation; hence enable the public meet their demanding needs effectively. Therefore, one of the case studies where the regulated free-market approach applied is the case for Mercy Ministry. This is an organization, which is focused on caring for, or helping the poor and the needy /unfortunate ones in the society. They offer spiritual and physical help and the organization takes social justice significantly. Therefore, one should think of this ministry and think of a regulated free market approach the way it applies in this case study. For instance, the organization is a free market because the ministry is programmed to meet the needs of the poor. The ministry is also effective because it is programmed for varied reasons including increasing responsibility and working together as a group to achieve the organizational needs. This is one way of fostering a free market of better and effective opportunities; thus the ministry is not an efficient investment area. The entity also leaves the responsibilities to the congregations with church members outsourcing their duties to the staff members.

Conclusion

In conclusion, the study attempted to examine varied approaches to standard setting in accounting including the free market approach, regulator, as well, as illustrated the applications for such approaches. It utilized numerous literature materials to provide systematic and clear understandings of accounting standard setting in regard to financial accounting standards. The literature provided critical assessment of varied approaches by illustrating relevant applications for such approaches. One of the approaches revealed was the free market approach, which is a non-regulatory mechanism. Under this approach, there is an agency theory, which recommends that entities should have incentives to release accounting information generously. The proponents of the free-market theory also argued that positive accounting is an effective theory for maximizing profits in the free market economy. The second one is the regulatory approach and this approach aims to protect the interests of the public or consumers in the market. There are varied approaches that have been developed with regard to achieving the needs of the public including the regulated capture theory and the public interest theory. Lastly, the case study was included that revealed the application of regulated free-market approach in an organization.
Effective Positioning Is Vital Element of International Brand Strategy
According to research, positioning is a category of marketing communication that has a significant responsibility in improving the desirability of international brand. This is achieved through transforming the physical features and insubstantial insights of a marketing offering in relation to the rivalry. It is vital to note that position is not determined by the appearance of the product or the sustenance that it pursues to stimulate. However, it is instead the insight or appearance that takes a distinct location in the mindset of the consumer; furthermore, positioning is a communication, comprising the establishment of a market mix, which creates the natural flow of information from market segmentation through target marketing. It is a form of developing a competitive position for an international brand and consequently improving its desirability. Positioning is mainly concerned with what an organization does to the prospective consumer and how the consumer perceives the organization. Effective positioning is a vital element in international brand strategy because a position arouses an image of the product concerned in the minds of the client (Schultz 2007, p. 23). It projects the idea that differentiates the brand from the competition and projects it as a product that can meet the needs and desires of international customer, whereby, an effective positioning offers a competitive edge to a brand that is trying to display its desirability to the target market.
Effective positioning is a vital element in international brand strategy because it promises the benefit the clients will get and develops the expectation that it has the solution to the problem of the consumer. The solution is always different from and better than the solution provided by the competitors. Positioning is thus, an incorporating notion. It acts as an umbrella that incorporates all things in international branding. When effectively targeted, single-minded, positioning affects everything that a brand does or stands for; it is not reinforced by advertising only, but by the wholeness of its promotional efforts (Smith, Gopalakrishna and Chatterjee 2006, 560). However, in case the expectations that are developed by the brand strategy are not met, the effectiveness or the reliability of these benefits may weaken speedily. Therefore, with these demonstrations, it shows that positioning is a vital element in international brand strategy.

An Integrated Marketing Communications Campaign for an International Brand
The advancement of marketing for an international brand has moved beyond traditional marketing to include consumer driven, interactive and social marketing. Multinational companies have realized the significant need for integrated marketing communicating (IMC) campaign in order to enable their brands to thrive in the global market effectively; hence achieving a competitive advantage. The increased competition in the global market have enabled companies to employ IMC approach; thus this approach is ushering in a new technology era where marketers blend communication messages across the media channels in order to communicate about brand experience. This is because brand raises awareness of goods and services and ultimately surges their sales, leading to great returns and income for the organization. Therefore, as a part of successful IMC for an international brand, multinational companies utilize social media, Internet, public relation and advertising through other media such as Televisions, radios and others in a cohesive manner to share the message about the international brand available in the global market.
For an effective campaign of international brand using IMC, various methods or elements are employed in the entire process. For instance, integrated marketing communication involves the foundation stage, which includes complete analysis of both the goods and the target market. Therefore, to achieve this, multinational companies include social media as a form of campaign of an international brand. Using social media such as Facebook, Twitter, and many others, an organization is able to reach its target consumers internationally because a significant number of people (Fitzpatric 2005, p. 94). This is because the current world is undergoing an increasing technological advancement and very many people have access to social media such as Facebook, MySpace, and Twitter among others. Accordingly, the culture of an organization is also vital in the process of integrated marketing communication in the campaign of an international brand. The attributes of goods and services have to be aligned with the work culture of the organization. Thus, an organization is able to campaign for an international brand buy choosing the right method depending with its culture. For instance, it may choose to use public relation or direct marketing in the process of campaigning for an international brand.
The key to successful integration of international brand is the cohesiveness amidst diverse marketing messages, and understanding that marketing is all about interaction between a corporation and its potential consumers. Therefore, it is not prospective customers but rather the way a company blends and executes such campaigns to convey the message synergistically (Holm 2006, p. 27). However, the promotion of the international product depends on the size of the firm the strategic elements or IMC components that the company may want to use. For instance, the foundation of the company, which is based on the understanding of the brand and market, matters a lot. This involves understanding technology change, consumer attitude or behaviors, as well as, anticipates competitor movements. Another aspect that should be taken into consideration is the consumer experience, which includes the product experience, pricing and packing experience. These are vital because they signal a message to customers about the international brand in the market; thus contributing to increased sales. Brand focus such as logo brand message and corporate identity also are effective in communicating about the international brand available in the market.
Additionally, international brand campaign is improved through integrated marketing communication such as promotional instruments and communication tools . Research shows that brands are marketed through a significant number of marketing devices including trade advertisings, individual selling as well as sales campaigns. Furthermore, campaigning for an international brand includes variety communication methods inclusive of advertising and direct selling, as well as social media (Peltier, Schibrowsky and Schultz 2003, p. 94). Therefore, an effective integrated marketing communication system must comprise of the perfect incorporation of promotional devices and techniques that assist organizations to recognize suitable and effective approaches for communicating and creating association with consumers as well as other shareholders like workers, investors, interest teams, and the public as a whole.

Discuss why a company would launch a brand extension into an international market
To begin with, brand extension may be termed as the extension of a new product category normally under the main or parent brand. The brand name, from which its extensions are made, constitutes the parent brand. Studies reveal that extensions may take place under two state; banner names or product categories (McGrath 2005, p. 19). Various reasons as to why a company may opt to launch a brand extension into an international market, needs a more insight to ascertain the facts behind this. At the very beginning, the main advantages that push an organization to engage in brand extension include; brand extension creates a wave excitement in the market and trade, it meets new market demands, and finally it creates appearance, positive image. In that line, the main reasons that causes a company to introduce brand extension include the following; it saves the cost that may be involved in introducing new brands, this in turn reflects on the revenue returns. It is a channel, a company may use to bring new customers on board; it expands the market share right from the parent brand to the new sub brand.
Often times, customers associate new products with the quality perceived from the parent brand and therefore, this will be one way that increases the market share for the new product in an international market. Moreover, brand extension increase feedbacks concerning the parent brand; this enhances the image of the brand or the image is revived and it opens a get way for subsequent extension in the future to increase the market share. In addition, the main means through which a company may use to bring on board new customers, and therefore fulfill the need for explicit market coverage or francize, is brand extension in international markets. Additionally, brand extension increases trial and distribution chances for both core brand and new products (Ferdous 2008, p. 223). This is because; a customer interested in the core brand may be more likely get interested in trying the new product extended from the core brand. 
In conclusion, positioning is a group of marketing communication that has a noteworthy accountability in cultivating the popularity of international brand. This is achieved through changing the physical features and insubstantial intuitions of a marketing offering in relation to the competition. It is vibrant to note that, the form of the product or the sustenance that it pursues to stimulate does not determine positioning. The research had the aim of evaluating how positioning is an effective tool in international brand strategy. The information was thus provided in details concerning the issue of positioning in international brand strategy. In addition, the research discussed critically the integrated marketing communications campaigns of an international brand. From research, integrated marketing communication is the practice of combining all methods of brand promotion to motivate goods or services among the target market. In integrated marketing communication, all factors of marketing communication function together for raised transactions and supreme cost efficiency. The research noted that, methods such as advertising, individual promotions, direct selling, and social media are among the tools used in integrated marketing communications in campaigning for an international brand.
Being a fashionable dresser does not necessarily mean that one has to spend a lot of money. This is because not everyone who can afford expensive fashionable clothes, but taking time and making significant decisions can sharpen one’s street-mart senses (Jennifer pr. 1). The price or expensive clothes does not make one to appear chic, but it is the actual sense of fashion that defines in case one is fashionable or not. A fashion is not always about draining the bank by spending on expensive clothes. However, it is about planning and using the limited resources available to create a style that is appealing to people. It is vital for one to take necessary steps in case one wants to appear fashionable without emptying the wallet for expensive clothes. Thus, with the issue of credit crunch, one can stay fashionable within the limited budget through taking into considerations the necessary steps.

One can look cheap without spending a lot of money because it takes adventurous spirit towards climbing the ladder of success. This is through beginning with simple basic research skills of what appears fantastic before the eyes of people. Many people takes a lot of time in determining what appears good and while other take time to choose what can suit them best. Therefore, applying some simple skills can enable one to spend little money on fashion. This is through searching into fashion magazines and fashion websites in order to find fresh ideas of what is best for a certain occasion. However, bearing in mind the body shape, daily activities and unique personality when searching clothes in the wardrobe can enable one to choose the best fitting.

Inventory stage is the second step towards looking fashionable on a limited budget.  This involves searching one’s wardrobe to review the variety of clothes being accumulated inside. Jennifer (pr.3) argues that the inventory stage is the significant step as one bounds to find discarded clothes and forgotten clothes. This does not only create space in the wardrobe but also brings one into some extra shopping of clothes. Therefore, it is vital to sort out clothes one by one in order to determine the pieces of clothes, which can be discarded, or sold at the consignment and others donated to charity (Jennifer pr.3).

Once one has created enough space in the wardrobe, there is now a list of fashionable clothes to purchase. It comes next the exciting step of shopping clothes, thus in case one is an expert bargaining hunter, it is crucial to begin by moving through the thrift stores. Through significant application of common sense, one will be able to find items for shopping at lower or cheaper prices than the retail prices. It is effective to go for shopping very earlier in the morning before working hours. This will enable one to get different fashionable clothes; that can suit best one’s personality.

Prioritizing the pieces for purchasing and avoiding shying away from online shopping are essential steps (Jennifer pr.6). Jennifer argues that putting the quality investments pieces at the forefront of the shopping lists is significant (Jennifer pr. 5).  Expensive clothes, which are classic can be included in diverse outfits in order to avoid spending too much on trendy pieces. However, one should not shy way when making online shopping especially when one has a taste for fashionable clothes. One can also utilize online auction for finding stylish clothes. Lastly, it is crucial to fit clothes and choose always the best seller with better customer feedback before purchasing online clothes. Thus, with significant skills and systematic approaches, anyone can be a great designer by using little money within the limited budget.
Diversification will be the main strategy for longevity of the Pink Lotus Innovations (LLC) Company. Diversification is a significant strategy in the company operating in the international market because it will enable the company to increase revenues. This is through higher sales volume made from diversified products and services in the new market. Therefore, the company will diversify their business in order to reduce risks in the new markets; thus maximizing returns through investing in diverse areas. The aim of diversifying the business is to increase the stock prices and reduce the risks, which may arise in the new market; thus achieving effective business competitive advantage.

The strategy for business diversification will be expanding the operation of the company through adding new markets, new products and services of different types and adding production stages to the existing business. The catalyst for achieving these strategies is taking into consideration the mission and vision f the business; thus grasping the opportunities when presented in order to move toward profitable business. The aim of this diversification strategy is to allow the business to enter business lines, which are dissimilar from the presented business operations. Some entrepreneurs believes that diversification is achievable through a natural advancement that is extending the new brands by offering customers a variety of products; thus meeting their demanding needs (Tielmann, 2010). However, an effective diversification strategy is capitalizing the core competence of the company and the strengths of flourishing brands to enable the business perform successfully into the new markets.
The synergies may be gained from the diversified activity through incorporating the corporate level strategic decisions together with the diversified activity. Onkvisit and Shaw (2009) argue that companies nowadays strive in order to survive in the face of economic competition in the international market. Therefore, synergies for brand diversification strategy have become one of the common diversification strategies for entering into new markets in order to compete favorably with the competitors in the competitive global market. Therefore, the company can achieve synergy from diversified activity through creating more value to diversified products.  The corporate can also enter into the diversified areas where corporation key resources and capabilities can be shared and leveraged in order to improve organizational performance. The synergies can come from both horizontal and vertical relationships from varied business units. The company can take into considerations the core competencies by leveraging competencies and shared activities in order to fuel the new business growth.

Before the LLC Company enters into the foreign market, they should first analyze the environmental conditions of the foreign markets. They can employ effective models for analyzing the country’s attractiveness and the competitive strength of the business. Therefore, the foreign markets where the LLC Company can enter is the overseas markets such as the European markets. The company will employ effective strategies for entering the oversea markets in order to enable them become competitive; hence increasing profitability. One of the effective strategies that the company will employ is indirect export strategy. The company can use this strategy for matching the requirements of the foreign buyer. It can also choose to deal with international business that takes into considerations the foreign policies and regulations. The second strategy is the direct export since analyzing the direct export activities will enable the company to take greater control of their activities. It can involve in product sales and distribution in the international markets; thus employing this strategy will enable them to increase their sales. Lastly, it can employ foreign production strategy, which is an expensive strategy, but the most significant strategy for the companies entering oversea markets.  This strategy can enable the company to reduce the price for products; thus competing effectively with similar local products and services in the foreign markets.

One of the challenges that LLC Company will face in the foreign market is high competition from companies producing similar and high quality products. Lymbersky (2008) argues that many companies face tough competition in the global market because of increased technological advancement. Technology advancement has enabled companies to produce innovative products and use e-marketing strategies for achieving competitive advantage. Therefore, LLC Company can overcome competitive challenge in the global market by utilizing e-marketing strategy such as the use of social media services or Internet to reveal to customers the quality of services they offer to customers. They can also design high quality and valuable brands of different types that will satisfy the needs of customers; hence increasing profitability level. Other challenges may include cultural nuance, communication style, brand name diluting issues, social or ethical issues identification of true market demands, , and distance or time challenges. However, the company can respond to these challenges through employing effective communication strategies, understanding the cultural aspects of customers in the new markets, creating a stable brand loyalty and carrying out further marketing research in order to identify the target market effectively. 

The company can diversify or expand their business into the new markets when the business environment continues to change. The company can also start diversifying when it has started growing and performing better in the local market. Therefore, diversifying their products will enable them to increase sales and incomes; thus maximizing profits in the new markets. Moving into the new market well occupied by stiff competitors often makes sense since the market is familiar; thus offering the company the need to market their products and services better value. Market diversification has varied challenges such as high risks and costs of entering into the new markets, as well as, cultural differences and competitive issues may impact the organizational performance. Thus, it is crucial for the company to implement diversification strategy in order to improve the quality and value of products; thus achieving a competitive advantage in the new market.

The company can create a business environment conducive to ethical behavior in varied ways. First, human resource managers can maintain ethical integrity with labor force through effective employee interactions. This is through taking accountability and managing employ related issues in the work place effectively. Neelankavil and Rai (2009) argue that maintaining ethical integrity in the work place is vital because it will enable the company to overcome problems arising in the business operations. Secondly, ethical integrity also pertains to effective interaction or relations with customers. Being honest about the product features that can offer effective satisfaction to customers is one way of creating conducive business environment. Service providers in the company should act with integrity through keeping promises to any appointment and quality of services offered to customers. This is essential because it will contribute to success business performance; hence enabling the company to achieve high profitability.

A merger refers to amalgamation of two antecedent separate industries, typically as more or less identical partners. In the merger, firms often exchange stocks and one company issue shares to the stakeholders of another firm at a certain percentage.  Acquisition involves one firm taking over ownership of another, but a merger includes the combination of two firms in order to form a single entity (Cooper and Finkelstein, 2006). The motive for both mergers and acquisitions is strategic, managerial and financial. Many companies conduct mergers and acquisition for varied aspects such as performance aspects, market power aspects and management aspects. There are both undertaken to improve the performance measure or increase the cost saving opportunities. Organic growth is whereby a strategy is achieved through building on advancing the capabilities of an organization. It is defined as the growth rates of the firm excluding the scale increases from mergers, acquisition or takeovers (Hess, 2007). In strategic alliance, more than one firm shares resources and activities in order to pursue a strategy. Hassanien, Dale and Clarke (2010, 17) define strategic alliance as an arrangement between two or more independent firms, which makes a decision of operating in a certain business. This is through jointly coordinating resources and skills on their own or merging their operations.

Microfinance industry is one of the institutions that have been growing significantly through organic, merger, acquisition and strategic alliance. This sector has attracted many investors because of varied reasons, hence strategically increasing the performance level. The first reason is that the industry is not only based on financial motives but also managerial and market share motives. Many microfinance firms have been operating their business where there are potential markets. Shenkar and Reuer (2006, p. 123) argue that many microfinance industries strive to survive in the global competitive market; thus many of them seek for alternative means of surviving in the competitive global market. Therefore, they conduct mergers and acquisitions as well as choose organic growth and strategic alliance in order to achieve successful business performance.

The merger between Britvic and AG Barr is inclined; thus it is a share deal with management emerging from both companies. The deal is structured as an acquisition from both companies and the shareholders seem to be on the top. Both organizations share the shame profits and the annual cost savings are high. However, cutting costs by both companies seem to be a difficult task, but the business deal of merging the companies will significantly benefit both companies. This will make the companies be among the leading soft drink industries across Europe. Despite these benefits, there are always negative impacts associated with merging companies. This is especially the impact on the market since these companies will dominate in the business market. Therefore, my advice to the new board is that these companies should be ready to share the risks and lower cost in order to increase their performance level. In order for companies to get into the scale and compete with the leading companies such as Coke, they should ensure that the strategic alliance is suitably created. They should ensure that similarities in terms of industrial features such as structure and cultural aspects align in both companies. This is because some aspects such as different cultural aspects may hinder organizational performance; thus the board should ensure that the organizational culture and structure align effectively.
Companies such as Kodak are awarded patent rights to protect their exclusive use of technology in order to compete with their rivals; thus achieving a competitive advantage. A patent right can secure an exclusive rights of an inventor to an invention for more than twenty years; hence achieving a competitive advantage. This can eventually enable the company to acquire a temporary monopoly for its products; hence allowing it to reap high profits in the competitive market. However, in case the patent expires, other companies are free to duplicate the invention. Although patenting an invention is not a guarantee that the company can achieve success, it can be profitable in case the company succeeds in business activities. Eastman Kodak has made significant efforts of surviving in the competitive global market; thus it relies on patents, as its source of income in the digital economy. Since the year 2004, Eastman Kodak has not been profitable apart from this year; hence the company has tried to find their way into the digital economy. Thus, the company has sued many companies such as Samsung, LG Electronics and it is currently battling with Apple Company for licensing fees as a way of raising cash.

Kodak has to sue companies that infringe on its patents because they want to receive settlement money. Kodak Company has the right to defend their patents rights in order to maximize profits in the global market. However, the violation of the patent right by another company may lead to the violation of the law. For instance, Kodak Company sued Samsung Company because the camera phone technology for Samsung Company violated the two Kodak patents; thus they received $550 million from Samsung. Kodak also sued LG Company for violating their patent right; thus received the settlement money of $ 400 million from LG Company. However, Kodak is currently blocked by Apple Company because each of these companies has a battle for accusing each other of patent infringement. Additionally, the company has made negotiations over the licensing deals for its patents. However, Kodak has significantly increased adequate profits from its patent rights, which can enable them to survive as the company re-structures.

In case, most of Kodak’s patents expires, the company can stretch out its safety net long enough to create profits in other business sectors. This can be through implementing a new business strategy on the way they can increase their profits. For instance, the company can outsource some of its manufacturing parts and invest heavily on digital technologies. The new strategy can enable them to capitalize on their technology innovation in order to boost their business above the profit margins. Kodak has made significant efforts of negotiating for licensing deals in order to maximize profits; hence achieving a competitive advantage. However, the company can still outsource some its manufacturing components because outsourcing is also significant. This is because it enables the company to enjoy the economies of scale and lower production cost; thereby enabling the company to gain competitive advantage in the global market.
Overview
The business plan can enable one to secure finances and define the direction of the business through creating a strategy for achieving the stated goals effectively. The name of the business is Nebula Interiors; thus the industry will deal with furniture and interior stating business activities.
Products/Services: The industry will focus on modern classical furniture and decorations. The services provided include interior designing and staging.
Mission: The mission of the industry is to deliver high-end quality furniture that will satisfy many customers. 
Objectives: One of the objectives of the business is to offer customers varied collections of high-end furniture in order to meet their demanding expectations efficiently. Another objective is to provide customized luxury design services that are unique from other similar industries, thus enabling the business to improve its profitability level. Lastly, the industry will deliver to customers a high quality and relaxed staging experience; hence satisfying their needs.
Marketing Research: Marketing research is effective in the business industry because it will enable the company to understand expectations of customers; thus employ effective strategies for achieving successful business performance. Therefore, the industry will conduct on-going field research on the target customers and competitors through observation and interview methods.

 Operation
The operation part will involve varied aspects such as site selection, facility layout, work flow, resource planning, capital budget and operation budget.
Site selection: In this case, four inventory sites will be required, which include the storage mart to serve downtown, Northern and western area, exhibition storage to serve customers in the Southwest region, Sutherland site to serve client in Southeast and Northern region as well as two stores will be required.
Facility layout: This will include inventory sites each with a certain level with complete furniture and service contained storages. The store sites will have downtown store with high quality store decorations, high-end products, effective layout and designs.
Typical flow of work: Customers will be allowed to choose the flow part or arrange the work flow order that suits their needs.
Capital and operation budgets: The capital for store decorations will range from $20, 000 to $25,000.  The hardware such as computer and other tools will include $ 10,000. The operation costs such as labor cost will be $7, 680 and the store cost will be $ 16, 500 per month (Nebula, n.d). The inventory and storage cost will also be included.
Resource planning: This will include 3 physical inventory storages, placing orders using timely strategy and inventory management will be managed in real time.

Human Resource
 Human resource plays significant roles in an organization including decision making process, training employees, compensation and organizational structure.
Organization structure: The organizational will be structured in a manner that will include, shareholders or management, the design or staging department and  marketing or sales department. It will also establish organizational link between the design and marketing departments.
Decision structure: The industry will ensure that each department is capable of making effective decisions based on the implemented organizational guidelines and procedures. The management or shareholders will make the final decision on non-established procedures or complex issues arising across the departmental operations.
Positions: The industry will only offer two positions for mangers and two for designers or stagers as well as two for marketers across the departmental operations.
Recruitment: The HR manager will hire experienced employees and he/she will utilize online job sites such as Linked in, ministers among others in advertising the available positions. He/she will ensure that the designer has design education, design background and experience on interior decorations. The HR manager will also recruit the marketer with real estate knowledge, furniture and interior staging experience; thus increasing organizational profitability.
Training, motivation and compensation: The HR managers will offer effective training programmes to employees and it will take 1-2 weeks. He/she will motivate employees through offering them 5% profit compensation for ever sales made over $5000 per month (Nebula, n.d). Lastly, the managers will also offer employees health and other insurance benefits for only long-term employees.

Saturday, October 19, 2013

The International human resource directors and other top management teams of multinational companies have nowadays realized that globalization is the most critical problems many multinational enterprises are facing today.  They also acknowledge that it has become difficult to determine the internalization strategies and factors that they will employ in setting wages for their employees. The IHRM director of a British Multi-National Food Processing Company, which is now planning to open new sites in Australia, Russia and India need to evaluate effective factors for setting wage payment for their employees. Many companies get stuck in the job evaluation process because of the complexity nature of job evaluation process. Many grading and wage payment structures for varied employment aspects have evolved over time and this can be hard for IHRM director to justify why one job is graded or paid higher than the other job. It is vital to employ unique methods for job evaluation and identify effective factors for setting wage payment of expatriate managers, engineers, manager’s engenders and manufacturing staffs. Therefore, before determining wage payment of employees, it is crucial to determine the organizational needs by carrying out job evaluation, job relevant skills, work experience for applicants and understand the economic conditions of the region in which the company will function.

Literature Review
Many multinational companies evaluate varied factors before making a decision of what to pay the new recruited employees. Thus, varied literatures have attempted to reveal the way many companies carry out labor evaluation process or employ varied factors when setting the wages for their employees. When setting the level of monetary compensation of employees, one need to take into consideration varied factors. Snell and Bohlander (2010, p. 121)  argue that one of the first factors that should be taken into considerations when setting wage is setting the wage high in order to motivate and attract good labor force. The wage should be equitable meaning that it should accurately reflect the value of the labor performance. Sparrow, Brewster and Harris 2004, p.49) also add that in order for employers to determine wage payment of new employees, they should ensure that the wages are equitable and sustainable for firms. The company must first understand the responsibilities and requirements of the position which is under the review. This is vital because occupations vary from one organization to another and some positions are critical; thus effective job evaluation process should be carried out. Other aspect is reviewing the prevailing rates and classifications for similar occupation (Jehn and Jonsen 2010, p.314). This process is vital and it requires significant research of the competitive rate for a certain occupation within the geographical location. This is where carrying out wage surveys can help in defining wage payment structures, but IHRM should examine this aspect in a professional manner in order to produce better results.
Galuscak, Keeney, Nicolitsas, Smets, Strzelecki and Vodopivec (2010, p. 7) argue that an employer can either offer new employees a predetermined wage or they can bargain with the employers over the wage payment. However, in most cases, predetermined wage can be either due to the wage paid to existing employees with the same qualifications or some other wage. The economies of scale in wage bargaining is likely to be in the contract wage form (Bratton and Gold 2000, p.71). The characteristic level of the firm may influence the pay flexibility including the working contract, variable payment, workforce tenure, turnover or number of working hours. However, many firms prefer skill composition of the workforce more than the other workforce characteristics. Product features such as the product market features where the firm operates can also impact the flexibility of the hiring wage; thus should be taken into consideration.
Moreover, Galuscak et.al (2010, p. 8) argue that it is significant to determine the external factors of wage payment for newly hired works. The authors reveals the research study that was carried out and data drawn from the replies of HRM from around 1500 firms to a firm-level survey on wage and price setting procedures,  in 15 EU countries. The research survey was conducted and questionnaires developed by the survey group in order to determine the implications and factors influencing wage payment in varied firms. From the research analysis, it was found that the wages of newly hired employees are influenced by the internal wage payment structure or the labor market. However, the relative significant of the given external factors vary depending to labor market conditions. The firms can follow labor market conditions or the bargaining power of employees or existing laws of labor unions (Soulsby and Clark (2007, p. 1419). The wage payment also differs from one country to another depending on the bargaining structures. However, the argument of literature presented is that wage payment may not only depend on the bargaining structures but also on the prevailing institutional settings (Galuscak et.al (2010, p. 13).
OECD (2004, p.128) evaluates some of the evidence underlying the job strategy recommendations concerning wage setting. He reveals the way wage collective bargaining affect wage payment and employment level in many organizations. From the large empirical research survey analysis that was carried out on wage setting, the author indicates that unions reduce wage inequalities. The research evidence also reveals that collective bargaining and wage differentiation is stronger in regions or countries where there are strong union membership and strong bargaining coverage (OECD 2004, p.134). The empirical research carried out provided the theoretical prediction that the bargaining wage tends to be lower in places where there are high rate of unemployment. Therefore, many employers tend to follow the prevailing rate of unemployment level in a certain region and the excessive demand undermining employment performance before setting wage payment.
Khanna, Palepu and Sinha (2005, p.73) argue that companies employ varied strategies to each country’s context; thus capitalize on their strengths of a certain location before setting wage payment. They also compare the benefits of doing so through carrying out marketing research and analyze the additional cost they will incur. For multinational companies to succeed in the global competitive market, they must modify their business models in each nation. Among the varied aspects that companies compare before setting the wage payment is the political or social system of a given country, openness, product markets, labor markets and capital market. Khanna, Palepu and Sinha (2005, p.74) further argue that multinational companies may adapt the voids in a country’s products, capital or labor markets or both. However, they should retain their core business propositions even as they adopt their business models in business activities. Since companies cannot utilize the same strategies in different countries where they want to operate their business, they can then generate synergies through treating varied markets as part of a system.

Factors to Consider In Setting the Wages
a)    For British expatriate managers and engineers

There are varied factors that IHRM director of a British Multi-National Food Processing Company can take into considerations before setting the wages for British expatriate manager and engineers. One of the factors that the IHRM should take into considerations is the availability of expatriate managers and engineers capable of fulfilling the obligations and responsibilities of the job.  Skilled and capable employees who are committed to their responsibilities offer the company a crucial competitive advantage such as higher productivity and lower labor force turnover. Therefore, finding the right people to perform the right job is essential because it offer the company a competitive advantage. Dartey-Baah and Amoako (2011, p.2) reveal that engaging employees in the  workforce generates effective business results  and employees practices such as task design, recruitments, compensation and performance management are vital. For instance, the message that the company conveys while seeking to attract job applicants can influence future employees’ commitment and engagement. The company can set high wages in order to attract skillful and capable people since this is one way of motivating employees to work hard; thus increasing the organizational productivity.
Secondly, determining the level of job demand for prospective employees or unemployment level in a certain country is a crucial factor for setting wage payment of employees. The director of the company should take into considerations the demand level of job and determine the employment level in the area where they are planning to locate an industry. Capozzi (2013. Pr. 3) argues that the level of unemployed labor force in a given location dictates the compensation and benefits. This is significant because it will enable them to determine the wage to be set either at the minimum or maximum level depending on the job demand level.
Lastly, employment setting and organizational needs should also be taken into considerations when setting wage for employees. Capozzi (2013 Pr. 4) argues that understanding the organizational needs can enable an employer to recruit effective employer with required skills and also determine the compensation or benefit level. For example, contracting work to a foreign industry results not because the company has issues of employee benefits, but offering high compensation level to motivate employees meet the organization needs. Employment settings can enable the company director to set wage for their employees. This is because there are unique aspects that drive wage decision making in varied employment settings.  For instance, compensation in business settings can be heavily influenced by contracts bargained through labor unions.

b) For Local manager’s engineers and manufacturing staff
There are other factors that the company can take into considerations before setting wage for local manager’s engineers and manufacturing staff. First, the wage compensation laws prevailing in a given area and the attractiveness of the community where the company want to operate its business. Compensation laws vary from one state to another and the local employments, as well as, tax regulations can impact the compensation levels. The compensation laws may influence how much an employee earns and this will shape the general benefits of the wage plan. Some states have FLSA (Fair Labor Standard Acts), which have been implemented and they play significant roles in compensation laws (Appelbaum 2011, p. 91). Therefore, the IHRM should first examine and understand the major compensation acts governing minimum wage, equal payment, over time and child labor laws before setting wage. 
Secondly, the cost of living and benefits that the company would realize from their employees should be taken into considerations. Many countries have different standards of living and the cost of living differ from one state to another. For instance, the cost of living in Australia and Russia is higher than the cost of living in India. Thus, when the director of the company is setting wage payment for employees in such areas, he should ensure that local managers and manufacturing staff living in Australia or Russia receives higher wage than those in India. This is because the cost of living will be high and this will influence the consumption patterns of production and motivate employees to work hard. Moreover, the benefits should be taken as the significant aspects of the total compensation package of labor force when setting wage payment. Brewster, Sparrow and Vernon (2007, p.101) argue that benefit packages are crucial because they attract, retain and also motivate employees; thus increasing competitive advantage.
Lastly, performing job evaluation and also understanding what terms it means for the employers; thus comparing the revenues of other contractors. HR Council. (2013, pr.5) asserts that employers should consider payment term and compare it with the revenues to the other contractors. This is because courts always consider a worker being employed under series of fixed contracts as a permanent worker. In addition, carrying out job evaluation or job classification is crucial because it will enable the company to determine the relative worth of jobs within the industry (HR Council 2013, pr.8). Job evaluation concept is significant because it enables the company to examine the available jobs for employees; thus analyze the position tasks, knowledge and skills necessary for performing a certain task.

 Conclusions
The research analyzed the way it is crucial to determine the organizational needs by carrying out job evaluation, job relevant skills, work experience for applicants and understand the economic conditions of the region in, which the company will function before setting wage payment. The research provided varied factors that IHRM director can take into considerations before setting the wages for British expatriate manager and engineers. These included the availability of expatriate managers and engineers capable of fulfilling the obligations, job demand de termination and employment setting and organizational needs. For Local manager’s engineers and manufacturing staff, the factors included the wage compensation laws prevailing in a given area, the attractiveness of the community, the cost of living, benefits that the company would realize and job evaluation.

Bibliography
Appelbaum, E. (January 01, 2011). Macroeconomic policy, labor market institutions and
 employment outcomes. Work, Employment and Society, 25, 4, 596-610.
Bratton, J., & Gold, J. (2000). Human resource management: Theory and practice. Mahwah,
 N.J: Lawrence Erlbaum.
Brewster, C., Sparrow, P., & Vernon, G. (2007). International human resource management.
 London: Chartered Institute of Personnel and Development.
The Maslow’s hierarchy of needs model is one of the widely know theories of motivation employed in many organizations. The theory was developed by Abraham Maslow in 1943 when he came up with the concept of human motivation in the work place. This theory is parallel to the development psychology of human beings that is described in varied stages of growth. Maslow saw that human needs are in a form of a hierarchy ascending from the lowest needs to the highest needs; thus he concluded that when human being’s needs are satisfied, thus this type on needs ceases to be a motivator. Therefore, Maslow places the significant human needs in a hierarchy manner and in ascending order.  The Maslow’s hierarchy is also described in stages starting from the self actualization needs, esteem needs, affiliation needs, security or safety needs to the physiological needs (Koontz and  Weihrich (2006, p. 290). The Maslow model is a theory of personality, which has influenced many people in the working organizations because the model illustrates many realities of personal experiences.

I worked in a Peugeot Company in Nigeria from May 2011 to September 2011; thus I personally have applied this theory in the Peugeot Company. I can recognize some features of much experience or behaviors, which is true and similar to Maslow theory. This is because when I first joined in the Peugeot Company, my basic needs was to work in order to sustain my life such as get food, water, shelter and warmth. Therefore, I worked hard in order to achieve these basic needs, but once I achieved them, I started working harder in order to safeguard my job. This is what Maslow describes in the second level of his hierarchy as the safety or security needs (Merrick and Maher, 2009). Later on, I started developing sense of affiliation and began socializing with others in order to feel accepted by other co-workers in the organization. Once I started satisfying my needs, I wanted to be held in esteem by other co-workers. This is where I demanded power, reputation and gained self-confidence. Lastly, after I was satisfied by all the foregoing needs, I felt that I am now capable of doing what I was born to do; that is maximizing my potential to accomplish my objectives.

The Maslow’s hierarchy of needs was significant in the Peugeot Company where I was working. This is because the model helped leaders to understand better the way of creating workplace conditions through motivating employees to enable them satisfy their needs. I was motivated to work hard; thus satisfied my needs effectively. As I progressed up, I also increased my needs up to self-actualization. Maslow and Carl Rogers emphasized on the significant of self-actualization in the work place, which is the process of growing or developing into another stage in order to achieve individual potential (Ivancevich, Konopaske and Matteson, 2011). In every management level, there should be a need for self-actualization, which is the need for recognition of employees’ needs (Montana and Charnov, 2008). This is especially the desire for quality working conditions, job satisfaction and having good knowledge about the organizational demands.

In my observation, the significant approach that I will adopt in my own practices is motivating people with growth needs. This is through offering them support in order to enable them to complete new tasks, and make work interesting. This is crucial because it will enable employees not only to improve work performance but also satisfy their needs effectively. I will also encourage others to think positively for themselves and keep others informed. This is essential because it is one way of motivating employees; thus enabling them to improve the performance level.   


The international business field has been largely developed over the last decades through the insight and leadership work of John Dunning. Electric paradigm, which is well known as OLI-model or framework is an economic theory that was established by John Dunning, in 1980. The theory is based on the transaction cost, which argues that the transactions are made within an organization in case the transaction costs are higher than the internal costs in the free market (Cantwell and Narula 2003, p.41). This transaction process is termed as internalization method. The theory of electric paradigm seeks to provide a general perspective for determining the degree and pattern for both domestic and foreign-owned production companies. Dunning does not only consider organization structure as significant but also added three significant theoretical factors including ownership, location and internalization advantages. The major aim of introducing the OLI-model was to merge the international economic theories into one approach. Dunning also distinguishes different types of foreign direct investments; thus the model takes into considerations the resources of the country, location advantages and ownership advantages. Thus, Dunning identifies ownership, location and internalization (OLI) advantages some of which offer the explanation to the chronological acts of domestic and foreign-owned production.

Ownership-specific advantages
Ownership-specific advantages are the competitive advantages of the companies seeking to connect in FDI (Foreign Direct Investment). Therefore, companies that highly engage in foreign production have high chances of achieving competitive advantages. The ownership advantages are connected to the size and market position of the specific firm and these ownership advantages are often referred as monopolistic or competitive advantages (Cantwell and Narula 2001, p.111). They are advantages to the specific firm because they are the main asset for the specific firm. They also offer the firm a market position or cost advantage over a certain firm; thus enabling the firm to achieve effective business performance. Therefore, it is vital to develop and protect the ownership advantages because competitors may attempt to infringe or copy them. These advantages are further divided into standard ownership advantages, benefits of being a multinational enterprise and benefits derived from belonging to large industry. First, the standard ownership advantages are those advantages that an industry requires to compare with other rival industries in a specific location. These advantages are linked to the size, established market position that a firm enjoys and also monopolistic powers. These advantages are further linked to product diversification, exclusive access to technology, markets shares, patent rights and input factors such as labor, investment and natural resources. Therefore, the standard advantages are effective because they can contribute to market efficiency and also enable the firm to enjoy the economies of scale (Hisrich 2013, p.23). Secondly, benefits derived from belonging to large industry and the advantage of this is that that large organization may benefits from economies of joint supply in production. They can also benefits from purchasing, marketing, finance and effective access to cheaper inputs such as management, marketing and human capital.

Lastly, benefits of being a multinational enterprise, which also means that an industry is in a better position of taking advantage of varied factors endowments, tax regimes or factor prices. The company enjoys varied advantages when establishing abroad; thus it is likely to experience benefits from managing production, sales and marketing of products in domestic country. Thus, the company has the ability to exploit their technology and managerial expertise in varied regions across the globe and also gain access to expand their markets. Another advantage is the ability for the multinational companies to undertake strategic pricing of products. For instance, a firm which is located in many regions across the globe can divert their surplus from countries where there is high tax level to low tax level countries. This is essential because the total tax paid by the multinational enterprises can be reduced to a legal minimum tax. Dunning and Gray (2003, p. 23) argue that the future competitive ownership advantage of companies among other aspects would be the ability to motivate and improve the design qualities of the labor force. Firms will also need to find out new or unfamiliar markets for their products to adapt or promote the features of certain products in order to meet the needs of customers in the domestic market.  This may become significant for managers in case they identify and assess the potential partners through making agreements with them; thus achieving the intended results that are the best interest of the firm.

Location-specific advantages
Location advantages means the alternative regions, which may have valuable raw materials, specific taxes or tariffs; thus an advantage of multinational companies for undertaking value adding activities. This second element of eclectic paradigm is concerned with the place of production and it attempts to explain why an industry may wish to produce products in a certain location. The advantage of this element is that the firm will be in a better position of producing commodities in their domestic country and export them to the foreign market; thus generating high revenues. The multinational company may participate in foreign production in case if finds the best location and combine it with ownership advantages or internalization gains with production in another region. Fronz (2011, p. 45) argues that the location choice of the international firm can be influenced by spatial market failure, which is the existence of trade barriers such as tax rates, high tariffs and poor  environmental regulations or political instabilities.

The location advantages are categorized into three types. First, the access to and relative production cost factors, which require only an industry in a specific geographical location to exploit the resources. Language and cultural aspects can also be taken into considerations; thus it is vital for the firm to invest, as well as, consider business practices or customs before establishing the business a broad. Secondly, taxes and trade barriers are also taken into considerations.  Tallman (2007, p.121) argue that firms should take into consideration government policies because they are subjected to change. Therefore, many multinational companies may consider government intervention, investments, political stabilities and control on imports before making investment decisions. Lastly, transportation cost and access to the market advantage. For instance, firms that produced commodities at high costs should attempt to locate their firm near to the market places. The goods should also be capital intensive meaning that the firm should employ skilled labor and advance technology in order to produce high quality products, which will be marketable.

Internalization advantages
Internalization advantages refers to the advantages realized from own production of commodities rather than from joint ventures of partnership business. For instance, a company can organize for the manufacture and exploitation of their core product competences in order to achieve a competitive advantage. Thus, the higher benefits of internalizing intermediate commodities across the border, the higher a company would likely to connect in foreign production (Wilkins 2003, p.115). The internalization can be explained through varied factors. First, the ability to control and plan production is an effective internalization advantage. This is where Vernon in advance revealed the way multinational companies produce products which undergo varied product life cycle in order to produce more and highly innovative products. Secondly, there is exploitation of market power through price discrimination and companies also avoid bilateral market power. Sil and Katzenstein (2010, p.89) argues that internalization is becoming obsolete and this is revealed by Buckley where he introduces new forms of internalization and examines internalization cartels as the alternative and vital form of internalization. Lastly, there is avoidance of potential government intervention. This is through use of devices such as price transfers in order to reduce transaction costs; thus improving business performance.

Ways through Which Electric Paradigm Theory Represent an Advance on Those of Earlier Theorists
Internalization theory, as established in advance by other theorists such as Buckley (1980s) and Coase (1930s), is a firm-level theory that attempts to offer varied reasons for exerting proprietary control or ownership by multinational enterprises over the firm-specific advantages. Rugman 2010, p.3) argues that all firm-specific advantages are efficiency based in international theory. The knowledge advantages evolves from a transaction cost economics whereby the public good natures of knowledge is remedied through the hierarchy of an industry overcome the market failure. The other advantages such as organizational capabilities, brand advantage and management skills are also efficiency based or compatible with resource based view. According to Dunning and Gray (2003, p.55), the internal direct investment was in advance explained within the traditional theory of internal capital movements. Thus, there are other forms of internal investments, but FDI was seen a response for different return rates on capital among varied nations. Hymer and Aliber were among the theories that exposed the deficiencies of this approach where they observed varied features of international investment (Gray 2003, p.56).

In addition, the electric paradigm includes the Hymer-types advantages presented by Hymer (1970S) add to the efficiency-based firm-specific advantage of internalization theory. Some of Hymer advantages as demonstrated by Dunning and Rugman, these advantages serve to close markets and offer potential rents to multinational enterprises. Furthermore, contrary to the firm-level analysis, the core of the internalization theory is more an industry-level analysis (Yanto, Chris and Ian 2009, p.51). Thus, the mingling of ownership, location and internalization advantages serves to explain the meaning of outward FDI (Rugman, 2010, P. 4). The real meaning of the electric theory is that the ownership, location and internalization interact in order to produce significant patterns of co-evolutionary explaining the FDI at the industrial level.

In conclusion, Dunning identifies ownership, location and internalization (OLI) advantages some of which offer the explanation to the chronological acts of domestic and foreign-owned production. Ownership-specific advantages are the competitive advantages of the companies seeking to connect in FDI. These advantages are further divided into standard ownership advantages, benefits of being a multinational enterprise and benefits derived from belonging to large industry. The second is location advantages which include the access to and relative production cost factors. Taxes and trade barriers are also taken into considerations, as well as, transportation cost and access to the market advantage. The last type of advantage is internalization advantages, which refers to the advantages realized from own production of commodities rather than from joint ventures of partnership business.


 Interviews are widely used as an effective research method for data collection in many research fields. This is because they are effective tools for accessing attitudes of people, their feelings, reality and their inner perceptions easily; however, the degree of structuring interviews vary from structured, semi-structured and unstructured interviews. The structured interview involves the predefined set of questions, which are asked in the same order for all respondents (Hofstee, 2006, p. 93). This is because the projected aspects are to reduce the effects of the interviewer and instruments employed on the research outcomes. Semi-structured interviews are flexible and they include both open and closed-ended questions but the interviewer adjusts the series of the questions based on the context of responses from the participants.  Unstructured interview is a method that elicits the social realities of people; thus it has become widely employed by sociologists and anthropologists in research field process.
    Unstructured interviews should be only used as a precursor for a more structured approach in data collection in research process. This is because unstructured interviews are best applied for exploration when there is a limited understanding of the domain, or as a precursor to more focused and detailed structured interviews (Saunders, Lewis and Thornhill, 2009, p. 111). Unstructured interviews do not follow a prearranged schedule or list of questions unlike structured interview which employs a prearranged set of questions. Therefore, they can be used as the precursor of structured interview since this method is similar to survey research methods of data collection and they are administered orally instead of writing. The most significant and widely used unstructured interview originates from the ethnographic practice of anthropologists (Honey and Mumford, 1997, p. 36). Many anthropologists and sociologists employed unstructured interview for gathering information through participant observations and record field notes taking as they observe the sidelines and also joins the activities of the participants.

Unstructured interviews are effectual because researchers identifies one or more key informants to interview on a continuing basis or take short notes while observing and at the same time questioning participants. This is vital because it provides first hand information and the method attempt to solve difficulties in question interpretations. Bandura in his book of social learning theory argues that people learn better from one another through simulation and observations (Bandura (1977, p. 56). The theory of Bandura is sometimes seen as the link between cognitive and behavioral learning models because it covers varied aspects including awareness, memory and motivation. Unstructured interviews also demand effective attention, memory and motivation of interviewers because this method relies on direct observation and at the same time asking participants questions while taking notes. The interviewer also elicits information about the meaning of observed artifacts, behaviors, interaction and rituals, with questions emerging over time as the investigator learns about the setting.

    In addition, no interviews which can be truly be considered unstructured but some are relatively unstructured or less equivalent to guided conversations; therefore unstructured interviews should be only used as a precursor for a more structured approach in data collection. Although structured interviews tend to limit the investigation of new ideas, they are generally considered to be rigorous and effective but researchers should utilize unstructured interviews as the predecessor for structured interviews when collecting data. According to Schepers and Van (2007, p. 407), the society has become more critical and complex; thus the use of novel technological means in a creative manner to cope with these complex issues is vital. Despite the fact that unstructured interviews can pose risks because some topics may be entirely neglected when using unstructured interviews, this method sometimes focuses too much details on some key areas. Researchers should understand that the society is changing; therefore, they should employ effective research methods that can enable them to meet their intended goals effectively. Bryman and Bell (2011, p. 37) also point out that the benefits and limitations of imposing structure varies according to the beliefs of researchers but from the  epistemological stance, structured interview is likely to be of the greatest value.

Whereas the unstructured interviews are carried out in conjunction with the collection of observation data, structured interviews are often an exclusive data for a qualitative research task; thus unstructured interviews should be employed as the predecessor of structured interviews for data collection. The success of structured interviews depend on the right questions asked, when they are asked and who should answer them and this method is not different from unstructured interview research method. The unstructured interview relies on social interaction between the researcher and the participant; thus it is one way of understanding the complex behavior of participants without imposing any a prior categorization, which might limit research inquiry in the field. Belbin (2004, p. 79) argues that most research projects fail because of poor research management methods employed; thus there is a need to understand the significant of team building as a major factor for achieving success. This argument is similar to employing unstructured interviews as a precursor of structured interviews because both of them serve the best in data collection process.

Easterby-Smith, Thorpe, Jackson and Easterby-Smith (2008, p. 91) describe unstructured interviews as a natural extension of participant observation since this takes part of ongoing participation observation in the research field. Researchers of unstructured interviews always rely extensively on the spontaneous generation of questions in the natural flow of an interaction process. Each unstructured question may generate data with dissimilar structure and patterns but the intention of using unstructured interview for data collection is to expose the researcher to unanticipated themes, which will help the researcher to develop better understandings of social reality from the participants. While studies attempts to argue that unstructured interviews can be employed as the primary means for data collection, it can also incorporate unstructured questions into a study primarily based on participant observations (Diener, Crandall, 1978, p. 72; May, 2000, p. 56). The research study reveals that just because the unstructured interview do not employ predefined questions does not necessarily mean that they are non-directive; however they cannot be started without detailed preparation and knowledge in case the researcher want to achieve deep understanding of the participants (Bryman and Bell, 2011, p. 102). Most researchers who employ unstructured interviews hold a constructive point of view of social reality and correspondingly design research within an interpretive research paradigm.