Operations in organisations
Discussion Questions
Describe how an MNC develops and implements entry strategies and ownership structures
There are various entry strategies pursued by MNCs in their international activities. These strategies are put in place in accordance with the existing situation. The first strategy is exporting and importing. The small organizations use this strategy when they want to expand their business to international levels. Big firms could also export or import items if they intend to start a global increase with little expenditure and risk. The second is wholly owned subsidiary. This is a foreign operation that the MNC owns and has total power over it. Small organizations mostly utilize this design if the cost of a transaction like that of negotiating and transferring information is high.
The third strategy is mergers and acquisitions. This involves the trans-border purchase or trade of equity between two or more organizations. Many MNCs opt for this strategy when they want to expand their resources in a faster way or to establish products with a high profit in new markets. The fourth is through alliances and joint ventures. An alliance refers to a collaboration between two or more organizations. If the two organizations are from different countries, then that becomes an international alliance. While other alliances are temporary, others are permanent. Conversely, a joint venture (JV) is a special kind of partnership where two or more partners agree to run a business. These alliances and ventures have various forms that include cross-marketing arrangements, equity agreements, and technology sharing arrangements. In other situations, two organizations may establish a third, independent entity in order to develop a collaborative relationship that is not included in their core operations. There exist two types of alliances and joint ventures. The non-equity venture where one party provides service for the other and the equity joint venture where the MNC partners involved invest with their money.
The fifth is licensing. Through a licensing agreement, a party is allowed to utilize the right of a manufactured good and, in return, for the party to pay the other party that owned the property. The last is franchising. This is somehow similar to licensing. A franchise refers to an agreement in business in which one party, the franchisor, gives permission to the other party, the franchise, to run a business using its trademark, symbol, product line, and operational strategies at a cost. Both fast-food industries, together with hotels and motels, often use this strategy. This idea is majorly utilized internationally; however, it can be very beneficial if it’s adjusted to work in the local market.
Examine the major types of entry strategies and organizational structures used in handling international operations.
Various organizational structures are used in international operations. First is the initial division structure, where most MNCs make their initial entry by establishing a subsidiary or through exportation of goods and services that have been locally produced. With the increased growth of the operation or expansion of the company into more markets, then the company will opt for the second type of structure referred to as an international division structure. This will be able to deal with every international operation out of a division established for this purpose. Further growth may then result in the adoption of the third type of structure referred to as global structural arrangements. This may include global product division, global area division, and global functional division and mixed organizational structures.
Provide 5 major differences in operations or management practices or the employment relationship in a non-union workplace versus a union workplace
The first major distinction between a union workforce and a non-union workforce is in how wages are paid. In a union workforce, it is the union representative who negotiates with the company’s negotiation team in order to determine the salaries. With every negotiation round, the union may attain higher wages and better environments to work in. On the other hand, a non –union workforce allows no negotiations. An increase in wages and promotions are minimum and far between and mainly kept indiscretion by the management that can result in favoritism. Secondly, in a union workplace, an individual cannot be fired with no just cause, and fellow members will help ensure that. While in a non-union workplace, the employer can decide to fire an individual at any time and with no valid reason. If one decides to fight for their right, then they risk losing their job.
Thirdly, in a union workplace, one has a legally binding agreement that guarantees one’s rights, healthy working environment, job security, holidays that are catered for, salaries, and benefits. In a non-union workplace, on the other hand, the employer can make promises, but he is not under any obligation to fulfill them. It is, therefore, hard to enforce standards of employment. Fourthly, in a union workplace, an employee has a grievance procedure to oppose any injustices, poor working environments, or anything that is against the provincial Human Rights codes. Contrarily, in a non-union workplace, an employee can be forced to work in unhealthy conditions by the employer and even change the working conditions without any warning or consequence. Most persecutions and prejudice go unchallenged. Lastly, in a union workplace, an employee’s contract has several benefits as it provides one with life insurance, hospital care, eye, and dental care coverage, disability benefits, and pension plans, which are all provided with no additional costs. In contrast, in a non-union workplace, the benefits are usually decided by the employer, and they usually incur extra charges on the employees. These benefits might also be withdrawn without any notice.
In your opinion, are non-union workers sufficiently protected by employment legislation? No, they are not. This is because the employer can withdraw any of the agreements they made at any time and with no notification. The employer is also not under any obligation to fulfill any rights.
Find an example of one of the following organizational types: non-profit model, corporate social responsibility, more-than profit model, social economy. Why you think the model you’ve chosen fits the organization example you’ve found?
Red Cross is a non-profit organization. This is a non-profit organization because it is a tax-free organization established mainly for religious and charity purposes. The shareholders of this organization also do not benefit financially from it. It’s the organization that keeps any money earned. This money is then used to cater for various expenses and to run the multiple operations of the organization.