Author: admin

This work was produced by one of our professional writers as a learning aid to help you with your studies

Essay Question: Describe the ethical concerns facing the communities in which the Cooperative Group operates

This essay examines the ethical concerns which are foremost in the communities in which the Cooperative Group operates. The discussion argues that most important among these ethical concerns are the dual problems of global ethical dilemmas, led by the issues of fair trade and climate change, but also a keen interest in supporting local communities and local suppliers. The latter has become increasingly important in light of the financial crisis as it often a key factor in how local communities fare. The discussion begins with a critical analysis of how these ethical concerns affect local communities before reflecting briefly on how the Cooperative can be seen to assisting with such problems.

The Cooperative Group operates throughout the entirety of the UK. It can therefore be said that broadly speaking, the ethical considerations which effect the communities in which the Group operates are the ethical considerations which are currently foremost among the UK population as a whole. As outlined in the introduction, these issues can broadly by summarised as a concern about the environment and concerns about global poverty, international development and the role of trade in dealing with such problems. The UK voluntary sector is one of the best supported in Europe and has an annual turnover into the tens of billions (Harris 2001). Whilst this is not explicitly relevant to the role of the Cooperative Group it nonetheless illustrates the general spirit of the British nation and the importance which they attach to ethical considerations in life. These ethical concerns are important ones for the Cooperative Group to consider as much has been made recently of the role of consumer choice in shaping the nature of the world’s problems (Klein 2010 p.242). There is therefore a strong connection between the ethical considerations of such communities and the role of the Cooperative Group.

We must therefore acknowledge that one of the biggest concerns which many people feel in relation to the issue of climate change and global poverty has been the sense of how best they can help with the problem on an individual level. In an age when many people have lost faith in traditional political routes to problem solving or addressing ethical concerns, there is more and more emphasis placed on the importance of consumer choice. Writers such as Klein (2010), Tomlinson (1999) and Giddens (2002) have all been involved in arguing that perhaps one of the most important ways in which people can change the world in which they live is through supporting movements such as the Fair Trade movement, through taking an interest in the carbon footprint of their shopping and in generally being a much more politically aware consumer. Such arguments argue that consumer choice can effectively be used as a less dramatic form of economic sanction to place diplomatic pressure on certain areas to either reform their political practice, or to operate in a more considered manner. This point is made particularly strongly by Garton Ash who argues that, with so much choice over which charity to support and what particular manner in which to attempt to influence events, many people feel overwhelmed. Evidence put forward by the Guardian Sustainable Business report suggests that many consumers do believe that there choice of products makes a difference to such issues and that the majority of consumers are influenced by such factors . There is therefore a strong precedent for supermarkets and organisations such as the Cooperative Group to develop practical alternatives for such people and furthermore to inform their customers of the ethical issues which surround their consumer choices.

However, perhaps one of the most important ethical issues which faces such groups in the current economic climate is the issue of local employment and local livelihoods. Like many ethical considerations this issue ties in neatly with many of the other concerns which we have previously discussed. Throughout the post war period there has been a growth in the power of markets internationally to the point where the vast majority of the UK’s manufacturing industry and a large part of British domestic agriculture has been superseded by cheap foreign imports, be it manufactured goods from China or fruit and vegetables which are grown in warmer climes and shipped to the UK either on boats or planes. Such trends create a dual problem of increasing carbon emissions but also threatening local livelihoods, particularly in the more rural areas which the Cooperative Group operates in such as parts of Yorkshire and the Lake District. A significant ethical issue in this context is therefore the level of support which major shops such as the Cooperative Group give to local industries and producers. This issue has been highlighted by a significant number of globalisation theorists such as Dunkley, as well as more mainstream writers such as Stiglitz and Klein. Such ideas represent a significant concern for much of the world as the free market system has created more problems than it has solved for a great number of people.

Strong evidence suggests that such trends are being felt at the supermarket checkout and in the local shop. In 2010 Bevin reported that in response to a survey carried out for the Guardian “the majority of the 766 respondents indicated strong concern about carbon emissions, pollution, and resource depletion”. A majority of respondents also stated that the level of transportation was a key factor for them. They were therefore much more likely to purchase a product which had been locally sourced. It is also worthy of note that the Guardian report also found that the purchase of groceries came second only to transportation in the full ethical consideration of household expenditure. Areas such as utility bills or clothing were not considered to be as important ethically as were groceries.

When all of the evidence is collated there is a strong precedent set for the centrality of environmental and wider global ethical considerations in consumer choice. The evidence put forward by the Guardian report provides recent and solid support for the idea that an increasing number of consumers see themselves as key actors within the global economy and global society. It is increasingly the case that works by Stiglitz on globalisation, Klein on marketing and Dunkley on free market capitalism are becoming mainstream texts with a growing number of people understanding and forming judgements on some of the wider macro issues which are presented in such works. The result has been a grass roots movement away from simply buying products at the cheapest price towards buying products based on their ethical considerations. This is something which has continued through the recent financial recession with the Guardian Sustainable Business report being published in June of 2010. It is also worthy of note that the ethical stance, although slightly more of a factor at higher incomes, was largely constant across the income range.

It can therefore be concluded that the major ethical considerations for those people who live in areas that the Cooperative Group would operate in are the major ethical considerations which people consider in their day to day lives. Perhaps the most important of these has been the impact of products on the environment. It is increasingly the case that people buy products based on the distance that they have been transported, the amount of packaging they have and the place in which they originated. However, we should not ignore the wider ‘knock on’ ethical considerations which surround global warming and global climate change. The influence of poverty has been strongly felt with the fair trade movement receiving considerable support, to the point where the majority of coffee is now fair trade certified. It is clear that such issues have considerable crossover. The more locally something is grown the more chance there is that it will have less of a carbon footprint and the more chance that it will have of supporting local industries and therefore reducing global poverty overall. However, more important of all to the ethical considerations of the local people in which the Cooperative Group are considerations as to how best to reduce their carbon footprint and assist in the reduction of greenhouse gas emissions.

References and Bibliography

Bevins, Vincent. “Guardian survey reveals shoppers’ green concerns.” The Guardian London: The Guardian, 2010.

Cooperative Group. “Ethical Trading and Fairtrade.” Manchester: Cooperative Group, 2010.

Dunkley, Graham. “Free Trade: Myths, Reality and Alternative.” London: Zed Books, 2004.

Garton Ash, Timothy. “Giving well is hard to do.” The Guardian London: The Guardian, 2005.

Giddens, Antony. “Runaway World: How Globalisation is Shaping Our Lives.” London: Profile Books, 2002.

Guardian, The. “Consumer attitudes and perceptions on sustainability.” The Guardian Sustainable Business (2010):

Harris, Margaret. and Rochester, Colin. “Voluntary organisations and social policy in Britain: perspectives on change and choice.” London: Palgrave Macmillan, 2001.

Klein, Naomi. “No Logo.” London: Fourth Estate, 2010.

Stiglitz, Joseph. “Globalisation and its Discontents.” London: Penguin, 2002.

Stiglitz, Joseph. “Making Globalisation Work.” London: Penguin, 2007.

Tomlinson, John. “Globalisation and Culture.” Cambridge: Blackwell, 1999.

An assessment of the social implications of business ethics for the Cooperative Group

This discussion examines the social implications of business ethics within the Cooperative Group. It focuses on both the Cooperative Group bank, but also the Cooperative Group grocery stores in order to argue that the social implications of the Cooperative business ethics model are particularly positive. The discussion focuses predominantly on the social implications of the Groups policies on the eradication of global poverty as it is this subject area which creates a particularly useful crossover between the Bank and the Grocery side of the Group. The discussion begins with a look at the banks and how the Groups bank is different to mainstream banks. It then moves on to reflect on the Cooperative grocery stores before bringing the two strands together in a wider analysis.

The Cooperative Bank is an institution which pledges very strongly its ethical commitment to fair finance. In an age in which issues such as globalisation are having more and more of an effect on the way people live their lives, it is no longer possible to ignore global poverty and global climate change. However, the majority of Western commercial banks have grossly compounded many of the problems by attempting to make short term profits from developing nations. Many such banks should be seen as significantly responsible for the major debt crisis which hit Sub Saharan Africa in the 1980s and they should be held to account as being motivated purely by greed. Such institutions lent money at extortionate rates to nations which they were well aware were unable to repay such loans as they thought that they would ultimately be bailed out by huge IMF loans and therefore still make a profit . Such behaviour was also the hallmark of the banks which created the most recent financial crisis in the developed world. Investment banks which were being operated essentially as casinos in which gambles were rewarded and losses were covered have had dire social implications for the majority of the Western world.

One of the biggest problems now facing the UK economy in particular is how it is going to be possible to get credit to small businesses in order to stimulate growth whilst at the same time making public sector cuts which will amount to half a million redundancies. Major banks have more or less refused to lend to small businesses and households and therefore many people are beginning to turn to more ethical alternatives led by the Cooperative Group bank, but also other institutions such as the Triodos bank. The Cooperative Bank is committed to funding small businesses which it sees as being solidly enough set up to succeed and yet it is also committed to supporting projects in developing nations which have been properly set up and costed. In these two moves it has immediately made itself significantly more ethical than the vast majority of its competitors and has also had a significantly beneficial social impact. The availability of credit at reasonable rates is perhaps one of the most important single moves which a bank could have made in order to attempt to improve the situation in the UK and the wider Western world. However at the same time the bank has retained its commitment to developing real solutions for global poverty. Stiglitz has argued strongly that we should never underestimate the power of ethical banking to create and empower in the world. Well placed and secured investments can reap considerable social rewards. The bank itself sums this approach up when it says that it is “committed to making an impact by creating social, economic and environmental change”

If we then move on to examine the role of the Cooperative Group grocery store we can see that the social implications of the ethical approach which the Group has taken has been positive. The lead which the Group took on the issue of Fair Trade has benefited a significant number of farmers and by extension their families in some of the most deprived regions of the planet. Further to this it must be acknowledged that the wider impact of such policies can have on stimulating economies through the knock on effects which capital can have. Keynes highlighted the multiplier effect by which one business opening can lead to other businesses opening as they seek to provide services for aspects of the original business, be it sandwiches for the workers, parts for machinery, or any number of other services. Where there is a steady supply of capital through fair trade this can then be used to create reliable and consistent growth. The social implications of this policy should therefore be highly commended.

Within the broader sphere of the fight against global poverty we can therefore see that the Cooperative Group and its ethical policies are having an important beneficial effect. The vast majority of development writers who debate key issues within the subject frequently tend to agree that the central problems of development is creating sustained economic growth. This point is made by Stiglitz, Collier and Dunkley. Whilst it is important to note that there are other important factors in this problem, the United Nations Human Development Index (a statistical index based on a number of development factors such as life expectancy, GDP per capita, deaths from preventable disease and literacy rates) strongly correlates with the GDP per capita index . Therefore, where it is possible to create sustained economic growth it is possible to lift people out of poverty and empower them to develop their own solutions to their problems.

Within this more developed context it can therefore be argued that the social implications of the Cooperative Groups policies are hugely socially beneficial. The importance of the initial loans which the Bank offers to setting up projects such as schools or roads or water infrastructures are crucial to the steady development of these areas. However, perhaps even more important than this is the guarantee of a good and fair price for commodities which have previously been at the mercy of the international markets. Commodities such as coffee have suffered notorious drops in prices, particularly during the 1980s and early 1990s. This meant that often what had started out as a promising spell of growth developed into a slump and further poverty. The importance of a steady market at a fair price cannot be underestimated. The social implications of this are huge.

It can therefore be argued that the social implications of the ethical approach taken by the Cooperative Group are hugely important. Without such ethical considerations it would not be possible for developing world farmers to sell their commodities at a price which guaranteed them a profit and instead they would be left to the mercy of international markets and buyers who are particularly ruthless. The simple commitment to pay a fair price for good quality commodities sows the seeds of economic growth in many of these regions and provides a stability which was previously not there and the social impact of which cannot be underestimated. In a similar manner the ethical commitments of the Cooperative Group bank should be seen as being a key part of this process. We have seen from our basic analysis of development literature how the majority of current development theorists believe that finance is a vital part of the move away from poverty, but only where it is used responsibly and without an immediate desire for profits. The Cooperative Bank’s commitment to these principles means that they are likely to be one of the most important institutions in helping the developing world move away from poverty.

We can therefore conclude that the ethical considerations and principles of the Cooperative Banks provide vital financial support for key projects which have enormous social benefit. The provision of clean water, infrastructure projects and key buildings cannot be undertaken without responsible financial support. In addition to this the commitment of the Cooperative Group to pay a fair price for major developing world exports sows the seeds of stable growth and means that such areas are able to begin building and planning for the future where they were previously unable to think beyond the next week.

References/Bibliography

Bevins, Vincent. “Guardian survey reveals shoppers’ green concerns.” The Guardian London: The Guardian, 2010.

Collier, Paul. “The Bottom Billion.” Oxford: Oxford University Press, 2008.

Cooperative Group. “Ethical Trading and Fairtrade.” Manchester: Cooperative Group, 2010.

Dunkley, Graham. “Free Trade: Myths, Reality and Alternative.” London: Zed Books, 2004.

Garton Ash, Timothy. “Giving well is hard to do.” The Guardian London: The Guardian, 2005.

Giddens, Antony. “Runaway World: How Globalisation is Shaping Our Lives.” London: Profile Books, 2002.

Guardian, The. “Consumer attitudes and perceptions on sustainability.” The Guardian Sustainable Business (2010):

Klein, Naomi. “No Logo.” London: Fourth Estate, 2010.

Stiglitz, Joseph. “Globalisation and its Discontents.” London: Penguin, 2002.

Stiglitz, Joseph. “Making Globalisation Work.” London: Penguin, 2007.

United Nations. “Human Development Report 2009.” New York: United Nations, 2009.

An Assessment of the ethical concerns facing the communities in which the Cooperative Group operates and measures that could be taken to improve corporate responsibility

This discussion brings together the two strands of domestic ethical concerns and the wider ability of the Cooperative Group to respond to corporate social responsibility issues. The discussion begins with an outline of the major ethical concerns facing the communities in which the Group operates. This takes in both the communities in which the Group predominantly sells its products, but also on some of the areas in which the group sources its products. The major ethical policies of the organisation are then questioned in order to determine areas in which the Group could improve. Central to these criticisms are the failure of the Group to develop a coherent ethical policy in the manner of other retailers such as SUMA.

The major areas in which the Cooperative Group operates are predominantly the UK but to an extent worldwide. It is certainly true that the majority of the Groups business comes from within the UK with all of the Grocery outlets being in the UK. Therefore the major ethical concerns of the Groups customers are likely to come from these areas.

The majority of evidence suggests that the major ethical concerns of the UK population as a whole are the best ways to deal with global climate change, but also other problems such as global poverty and the problems which surround this. A recent report commissioned for the Guardian concluded that the vast majority of UK consumers are now heavily concerned about the impact that their day to day shopping and choices has on these issues. The notion of green marketing and the green consumer are two things which have gained considerable currency in recent years and have made consumers feel much more responsible but also empowered as to how they go about their business. It can therefore be argued that the central ethical concern of the Coop’s customers relates to how best to reduce their own personal carbon footprint. They see the selection of products which they buy as a way of reducing such problems and ultimately aiding in the fight against global warming.

However, if we look at the major areas in which the Cooperative Group sources its products we can see a slightly different story. The major area which is worth examining in relation to ethical considerations has been the region of Sub Saharan Africa and the impact of the Cooperative Group’s policies on commodities such as tea and coffee, as well as chocolate. The primary ethical concern in this area is the reduction of global poverty. This concern focuses on developing solutions which enable people to work their own way out of poverty through sustainable farming solutions and the development of markets within these areas. Central to this problem has been the issue of fair trade and the ability of farmers to gain a fair price for their commodities. Previously to the fair trade movement it was often the case that farmers would end up selling their products at a significant loss as a result of a huge world market and a collapse in global demand due to a financial recession in one area (for example in the late 1980s and early 1990s) . This problem led to significant calls for a commitment to pay a price which would guarantee a profit to those farmers who produced the aforementioned commodities.

We can therefore see that between these two areas of operations the Cooperative Group has two major ethical concerns, both of which are duly highlighted by the organisation itself. These are firstly the commitment to reduce the carbon footprint of the business, through sourcing more locally grown foods, reducing the levels of packaging which are used and also reducing the amount of transportation which is required to distribute products through greater logistical support. Secondly is the issue of assisting in the reduction of global poverty through a variety of policies from both the Cooperative Bank but also the Cooperative Grocery aspect of the business.

In terms of analysing the success of the Corporate Social Responsibility of the Cooperative Group one has to conclude that the organisation is one of the best performing of all businesses in the world today. Its commitment to the two issues outlined above should be taken seriously and is proved by real action and it has a reputation as a more open and approachable organisation responding to local customers’ needs in a much more approachable way than many of its competitors.

However, one of the major criticisms of the group which has been highlighted previously is the slight inconsistencies which arise particularly among the Grocery division of the business. These inconsistencies mean that the group which has a very commendable commitment to ethical issues such as the fair trade movement, can also be seen to be selling products which directly contravene these principles. The fact that such products are sold by the Cooperative Group means that such products are being profited from by the Group itself and that there is therefore a strong argument to suggest that the Group is itself contributing to the inequality which such principles create. If the group were to improve its service to its communities even further then it would be important for it to develop a strategy which was much more water tight and which served as a much more cohesive and inclusive model.

Whilst such a model would no doubt have logistical and technical problems it is important to note that there are companies and businesses which have been set up and run on very similar lines. One notable example is the food wholesaler SUMA, based in Leeds, West Yorkshire. This wholesaler is able to source a significant number of its own products directly but also works with other suppliers to develop a catalogue of supplies which it is able to provide to customers. This process involves significant research into the origins of certain products and a constant commitment to maintaining the high standards which are set but it is something which can be achieved. If the Cooperative Group were to seek to develop its own Corporate Social Responsibility policies even further then the SUMA model would be a particularly useful model to examine. It is also worthy of note that SUMA itself supplies several of the Cooperative Grocery Stores, in particular in the areas around Leeds where local demand for such products is high.

It is therefore possible to say that the ethical issues which are felt by the majority of the Cooperative Group’s customers centre on two major areas of interest. Firstly there is the area of global climate change and how consumers and people can reduce their carbon footprint as part of their everyday lives. Secondly there is the issue of how best to attempt to tackle climate change. As we have seen these two issues frequently overlap and in many ways can be strongly linked. However, we must also acknowledge that there are few groups better equipped than the Cooperative Group at developing strong policies in these areas. The diversity of the Group means that it is able to respond to crises in a much broader way than many of its competitors are able to. For example, on the issue of tackling global poverty, the Group is able to provide Fair Trade agreements with farmers for the supply of certain products, but is also able to use the Cooperative Bank to help develop key infrastructures and services within such areas. This dual pronged approach make the Corporate Social Responsibility Programmes of the Cooperative Group particularly impressive. However, if the Group were to seek to develop these valuable points further then there is considerable room for growth in the central principles of product choice which the Group makes. A more developed and ethically accountable set of principles here (in the manner of SUMA) would make the organisation significantly ethically stronger and would have massive social benefits for the areas of operation of the business.

We can therefore conclude that the Cooperative faces the two major ethical considerations of climate change and global poverty. Its commitment to combating these issues is noteworthy and certainly deserving of praise. However, with a more calculated and ethically sound approach the Group could perform even better in this very important area.

References/Bibliography

Bevins, Vincent. “Guardian survey reveals shoppers’ green concerns.” The Guardian London: The Guardian, 2010.

Collier, Paul. “The Bottom Billion.” Oxford: Oxford University Press, 2008.

Cooperative Group. “Ethical Trading and Fairtrade.” Manchester: Cooperative Group, 2010.

Dunkley, Graham. “Free Trade: Myths, Reality and Alternative.” London: Zed Books, 2004.

Garton Ash, Timothy. “Giving well is hard to do.” The Guardian London: The Guardian, 2005.

Giddens, Antony. “Runaway World: How Globalisation is Shaping Our Lives.” London: Profile Books, 2002.

Guardian, The. “Consumer attitudes and perceptions on sustainability.” The Guardian Sustainable Business (2010):

Klein, Naomi. “No Logo.” London: Fourth Estate, 2010.

Stiglitz, Joseph. “Globalisation and its Discontents.” London: Penguin, 2002.

Stiglitz, Joseph. “Making Globalisation Work.” London: Penguin, 2007.

SUMA. “SUMA nominated again!.” Leeds: SUMA, 2010.

An assessment of how the Cooperative Group could improve its operations ethically

This discussion examines the manner in which the Cooperative Group could improve its operations ethically. It begins by commending the Group on its stance on ethical issues such as Fair Trade, with all of the Cooperative Group’s own brand coffee and chocolate now being exclusively Fair Trade certified. It does however argue that there is a certain double standard in the way in which the shops will frequently sell other brand products which do not meet such requirements. The central argument is that, if the Cooperative Group is to develop its ethical stance further, it would need to create a set of absolute principles or standards by which it would judge all of its stock, in a similar way to food wholesalers such as SUMA. The discussion argues that, whilst such a view may be seen as slightly extreme or impractical by some people it is nonetheless the major direction down which the Group should aim to go. It is worth noting that some of the evidence discussed here relating to specific in store advertising is primary evidence taken from local Cooperative outlets and should be treated as such. Where possible this is highlighted.

The Cooperative Group deserves strong praise for its stance on key ethical issues such as fair trade, global climate change and global poverty. Its decision to develop all of its chocolate and coffee products from Sub Saharan Africa and South America into fair trade products was a decision which they took ahead of all of their major competitors and one which has been followed for the most part. A brief glance at the Cooperative Group website reveals a relatively prominent section entitled “ethics in action” in which the Group outline their major commitments to develop schemes in local areas such as walk to school schemes to assist the environment and community cohesion, but also their wider ethical commitment to reduce poverty through low interest finance, fair trade products and overseas projects. It is therefore worth making absolutely clear how commendable such actions are and how much they should be applauded by the Groups customers.

However, it is also possible to identify certain ethical anomalies within the Group. The aforementioned commitment to own brand Fair Trade Coffee and Chocolates often sits next to a promotion for Galaxy chocolate or Nescafe Coffee neither of which have any ethical merits. It is also frequently the case that such products are advertised in store, perhaps largely as a result of promotional offers such as ‘Buy One Get One Free’ but also through other “contracted out” advertising space which is operated by a “third party advertising agency”. There is therefore an ethical double standard here, whereby the Group will publicly commit itself to its own ethical standards but will then continue to profit from other products which clearly fail to meet such standards. Not only this but such products are often advertised in store in order to generate further profit. The Group is therefore promoting one image on the one hand, and carrying out an entirely different act with the other.

It can therefore be argued strongly that, were the Group to be taken seriously and present a water tight and uniform ethical case, it would have to develop its own benchmark of ethical standards by which it would judge all of its products. These would not need to be hugely ground breaking, certainly not in the first instance, but could be based on the ethical standards by which the Group develops its own products. If products meet such standards, for example Cadbury’s chocolate has been certified fair trade in recent years then they can be sold and the consumers can then make their choice according to other criteria such as taste, price or the

This work was produced by one of our professional writers as a learning aid to help you with your studies

Executive summary

Spice Man aims to establish itself as a B2B focused company specialising in the distribution of premium organic specialty Asian cooking sauces in the UK. It aims to capitalize on the growing consumer demand for quality healthy food and the UK’s love of Asian food in particular. The company has secured funds and warehouse/office facilities and its founder has already negotiated the sale of 5,000 cases each, for the four leading specialty Asian supermarkets across the UK.

Contents

Executive summary p.1
Mission statement p.2
The product mix p.2
Productp.2
Pricing p.2
Place p.2
Promotionp.3
SWOT – market overview p.3
Strengthsp.3
Weaknessesp.4
Opportunitiesp.4
Threats p.5
Competitorsp.5
Operational channels p.6
Finance strategy p.6
Spice Man assets p.6
Budgeting sales p.7
Expenses/Overheads p.7
Human resources strategy p.7
Summaryp.8
Referencesp.8

Mission statement

Spice Man is a B2B distributor of premium quality organic Asian cooking sauces to the specialty supermarket sector, in four key areas across the UK. Spice Man aims to fill a clear gap in the market and cater for growing customer demand for high quality, healthy premium Asian sauces.

The product Mix
Product
The product concept:

• Premium quality specialty imported South East Asian cooking sauces
• The USP’s of the product: organic luxury ingredients and completely authentic recipes developed by top specialist chefs
The types of sauce include:
• Rendang sauce and fried rice sauce from Indonesia
• Curry noodle sauce from Thailand
• Curry sauce for fish and one for lamb from Malaysia

Pricing

• The average cost to Spice Man of a case of 12 jars of any of these sauces, including cost of shipping insurance and freight (CIF) for arrival at Southampton is estimated at ?6.80
• The RRP of ?2.49 would produce ?1.92 profit per jar and the hoped for 100% mark-up on products would mean that Spice Man would sell its products to an intermediary for ?1.25, producing 67.8p profit
• Of the initial stock of 35,000 cases, Spice Man needs to sell the vast majority – 84%, at the full retail price in order to break even

Place/distribution

• The distribution of Spice Man’s products will be to up-market speciality supermarkets in London, Bradford, Manchester and Birmingham (key Asian food hubs). This could be challenging as ‘dealing with new suppliers has unpredictable aspects’
• Spice Man will use its new warehouse in Southampton, to stock products. Delivery will be handled initially by a logistics firm. If things develop well, Spice Man hopes to invest in its own delivery vehicles, plus drivers.

Promotion

• The sauces will be branded with ‘Spice Man’ labels stressing the organic, authentic nature of the products
• Although the focus is B2B, Spice Man also aims to promote the launch of his new sauces in ethnic minority based newspapers. Research has shown that in relation to grocery shopping, the majority of ethnic consumers found this to be an important source of food information

SWOT – Market Overview
Strengths

• The UK’s diverse population and the growth of worldwide travel have developed the UK’s taste for Asian cooking sauces and this trend is set to continue
• Asian food has an image of being healthy and quick and easy to prepare, as a result the oriental grocery food market is worth ?146m with a growth of 4% year on year. Indonesian food has grown 82% in value since 2007.
• 8 out of 10 UK households buy a cooking sauce at least once every year, with the average shopper buying once every three weeks
• There are few equivalent products available

Weaknesses

• The retail price of Spice Man’s sauces is relatively high at ?2.49 per jar and in today’s difficult economic climate customers may prefer cheaper, trusted products
• There is strong competition from other ethnic food markets such as the Italian food sector in the UK, which has the largest market share and is worth ?324m and grows by 8.7% each year 3
• Consumer interest in health has encouraged some customers to stop using ready-made sauces 4

Opportunities

• The cooking sauce market will grow by 7% by 2011 4
• Key competitor markets are under pressure e.g. sales are static in the Indian food sector 3
• More shoppers with children are buying, as are up-market shoppers and customers under 28 years old. There is also growing consumer demand for higher quality, greater nutritional value and more convenient formats. This could offer communications opportunities for Spice Man to differentiate itself from its mass of competition.

Threats

• The competition is fierce in the Asian cooking sauce market and new, competitively priced products are being introduced all the time

Competitors

The competition is strong in this market and new, competitively priced products are continually being introduced.

Key brands in competition with Spice Man:

• Sharwood’s – quality brand, Red Thai sauce ?1.57
• Lloyd Grossman – premium brand at ?2.09 per jar
• Supermarket own brands – high quality yet reasonably priced products such as Tesco Finest Thai curry sauce (Red or Green Thai) at only ?1.65. New variants include Finest Yellow Thai and Finest Laksa at ?1.49
• Patak’s Karai – quality mainstream sauce at ?1.57
• Goldfish Curry sauce (specialty product) – ?1.49 per container
• The Real Organics Food Company – organic Thai cooking sauce at ?2.69 per jar (only currently available in the south of England)
• ‘Xotiq’ produces ambient South Eastern Asian meal kits which are distributed through independent grocer shops, butchers, delicatessens, farm shops and garden centers

Operational channels

Specialty supermarkets have been identified as the best retail outlets because:

• Such operations can be flexible in their terms and conditions, whereas mainstream supermarkets will want to impose conditions such as low promotional prices
• Specialty supermarkets already target the kind of customers that Spice Man sauces will appeal to

Suitable outlets include:

• London – Hoo Hing – leading independent supermarket network and delivery service
• Birmingham – Sing Fat Chinese supermarket and wholesalers
• Manchester – Win Yip and Woo Sang supermarkets
• Bradford – the Pride Asia supermarket chain

Sales agreements have been established with these stores with each taking an initial stock of 5,000 cases.

Finance strategy
Spice Man assets:

• ?100,000 in seed capital to invest in the initial stock
• Further ?350,000 loan secured from a high street bank

Budgeted sales:

• Spice Man hopes to make 67.8p profit per jar. If it sells all its initial stock, it will make an overall profit of ?284,760 (on 420,000 jars)

Initial Expenses/Overheads

The following cost must be deducted from any profit made:

• Initial stock of 35,000 cases, then future stock
• Premises – rental of small warehouse in Southampton with tiny onsite office
• Power (light, heat, electricity, gas)
• Telephone
• Insurance
• Transport cost of goods plus insurance (inbound and outbound)
• Postage
• B2B Marketing and advertising
• Interest and bank charges payable
• Office stationery
• Founder’s salary
• Equipment hire for example, a small fork lift truck to receive and send on, cases of sauce
• Training budget – specialist training in for example fork lift truck driving, health and safety etc.
• Petrol expenses – for sales visits to potential clients
• Expert fees including accountancy, lawyers etc.
• Depreciation – office and warehouse materials and eventually delivery fleet
• Tax

Human Resources Strategy

• The founder of the company is Indonesian and fluent in relevant Asian languages and English. He also has a track record in the food sales business as he was a successful Asian sauces salesman for Europe. He has the relevant skills to launch such a business and he will be the sole staff member in the short-term.
• As a distributer Spice Man will need to develop strong working relationships with three sets of key customers including suppliers of the sauces (based in Thailand, Malaysia and Indonesia), logistics partners and the eventual retailers of his product
• In the longer-term Spice Man hopes to employ staff including a sales force, warehouse packers, delivery drivers and a finance expert

Summary

Spice Man has already secured promising distribution deals in its key marketplaces across the UK. It has the human, financial and operational capacity to launch the business but will need to ensure that the quality of its products and service is top class, in order to cement the strong business relationships it needs to succeed as a B2B operator.

References:

Bainbridge, J., 2007. Sector insight: Cooking sauces – sauces gain from premium push. Marketing, 24th January, pp.102

Cripps, P. 2009. Morrisons debut for northeast curry maker Maysan. The Grocer. [Online]. Available at: http://www.thegrocer.co.uk/articles.aspx?page=articles&ID=198842. [Accessed 29th April 2009]

Ford, R., 2009. Kitted out for an Xotic evening. The Grocer. [Online]. Available at: http://www.thegrocer.co.uk/articles.aspx?page=articles&ID=198732. [Accessed: 30th April 2009]

Hutt, M., Speh, T., 2009. Business Marketing Management. 9th edition. Thomson South Western.

Mclleland, F., 2009. Ethnic foods offer convenience retailers variety. The Grocer. [Online]. Available at: http://www.thegrocer.co.uk/articles.aspx?page=articles&ID=198830. [Accessed 29th April 2009]

Omar, O. 2004. Food shopping behaviour among ethnic and non-ethnic communities in Britain. Journal of food products marketing, 10 (4), 39-57

This work was produced by one of our professional writers as a learning aid to help you with your studies

This assignment will critically discuss three approaches to Corporate Social Responsibility (CSR) which are as follows: CSR as value creation; CSR as risk management and CSR as corporate philanthropy. For the purposes of this assignment, the definition of CSR will be based on Carroll’s CSR Pyramid (1991) which states that the economic, legal, ethical and philanthropic responsibilities of the organisation are dependent upon their particular context (Crane and Matten 2010).

This first section of the assignment will critique CSR in terms of value creation. Value creation can be interpreted in two ways. Firstly, there are the values created by the organisation which influences its CSR practices such as their role, ethical stance and stakeholder management (Crane, Matten and Spence 2014). Secondly, there is the value created by the delivery of these CSR practices. This may include an economic value, such as the reduction in pollution costs, and a social value, in terms of a reduced negative impact on society (Griseri and Seppala 2010). The model of Carroll’s CSR pyramid (1991) argues that the economic and legal responsibilities of an organisation are expected by society, such as the payment of taxes and operating within the law. However the changing context of society also expects an organisation to undertake both ethical and philanthropic responsibilities, particularly in response to the increased power and influence of organisations within society (Crane and Matten 2010). An organisation undertaking these greater levels of responsibility can arguably create value both for themselves and the society in terms of responding to a wider societal need in terms of harm reduction and the creation of benefits and value. However, critics of CSR suggest that there is no tangible link between CSR and value creation, but this may be in part due to the difficulties in measuring these links (Crane, Matten and Spence 2014). In order to assist in an assessment of CSR, ISO26000 offers a pathway for organisations to improve and report their CSR activities but this is a voluntary scheme (International Standards Organisation 2013). Other CSR value creation methods include triple bottom line reporting which includes the measurement of value in terms of economy, society and environment. However it can be difficult to measure how these three merge together to contribute to value creation and often, each element is measured individually (Blowfield and Murray 2011).

The traditionally held viewpoint of an organisation is as a creator of economic value for its shareholders (Friedman 1970). However CSR as a value creation tool argues that both economic and social value must be considered and this needs to include a wider view of stakeholders (Haigh and Jones 2012). Organisational initiatives which may decrease harm in terms of pollution or natural resource usage could create value for the organisation in terms of lower economic costs, in addition to creating societal value in terms of a reduction in pollution. However, it may be the pursuit of lower economic costs which may be more of an incentive for organisations, particularly in the current economic climate.

The argument for a better understanding of CSR as value creation is through aligning economic and social value. Porter and Kramer (2011) suggest a concept of shared value as a route to, not only increase the connections between economy and society, but as a way of enhancing the organisation’s competitiveness and growth. This form of value creation focuses on the future of the organisation and its interdependencies on society as a provider of, and consumer of, its goods and services. However, this relationship may be affected by issues such as who the organisation views as its most important customers or stakeholders and what matters to them in terms of the value creation proposition of CSR (Basu and Palazzo 2008).

In conclusion, CSR as value creation has moved from a traditional economic based view to a more inclusive economic and social value one. Value can be created by providing different CSR approaches to an organisational role such as reducing pollution, which creates economic and social value, in terms of reduced costs and harm. Concepts such as Porter and Kramer’s shared value (2011) suggest that the connections between economic and social issues can create competitiveness. However issues with measuring social value have led to some criticism of CSR.

The second part of the assignment will consider CSR as risk management. Risk is defined as an uncertainty which has an impact which needs to be assessed and responded to through the process of risk management (Institute of Risk Management 2015). CSR as risk management will therefore need to consider external issues such as the changing societal context within which they operate and consider risks such as human rights, particularly if the organisation operates in different countries (Crane and Matten 2010). Changes in economic, legal, ethical and philanthropic responsibilities may create uncertainty, which the organisation will need to assess within their internal environment. Blowfield and Murray (2011) suggest that risk management may include areas such as brand value and reputation; working conditions and human rights. With an increasingly connected society, risk management and CSR will need to look at tangible risks, such as a business premises fire, and intangible risks, such as human rights in order to protect the reputation of the organisation. The tragedy of garment factory fires in Bangladesh have highlighted the need for greater worker protection but have also demonstrated the difficulties of implementing CSR as risk management in countries where regulations are weaker (Husock 2013). The process of CSR as risk management should therefore assess these factories in terms of the implementation and monitoring of health and safety issues in order to protect the human rights of the factory workers (Griseri and Seppala 2010). If CSR as risk management is designed to lessen an organisation’s negative impact on society, then this must include all stakeholders who are essential for the survival of the organisation (Griseri and Seppala 2010).

Blowfield and Murray (2011) cite Schafer (2005) who suggests that risk management tends to focus on the economic consequences and this forms the basis by which it approaches the risk management of social or environmental risks. However, most organisations are built around an economic model, so the tendency to view organisational issues may be through the economic viewpoint (Crane, Matten and Spence 2014). This viewpoint may reduce the understanding of risk management, in terms of reducing harms to society, as the emphasis will be on the economic impact, rather than the societal one (Margolis and Walsh 2003 cited by Blowfield and Murray 2011). This focus on the organisation and the impacts of risk upon them arguably narrows the CSR approach, however, without a broader, voluntary approach, governments may be forced to bring in regulations to change the behaviour of firms (Crane and Matten 2010).

The use of Carroll’s pyramid as a model for CSR highlights some of the areas of risk management. For instance, an organisation has legal and economic responsibilities to society such as paying tax and adhering to the law in the context within which they operate with the state providing a framework for risk management through legislation (Power 2004). Failure to do this may lead to consequences such as economic and legal sanctions such as fines. However, adhering to these economic and legal responsibilities also implies an ethical responsibility (Crane and Matten 2010). Tax avoidance by organisations arguably undermines the CSR approach of an organisation as it fails to consider the impact of this decision on the wider society, in terms of loss of income and the negative impact on the organisation’s reputation (Crane, Matten and Moon 2008). Here the risk management arguably needs to not only cover what might happen, but also to be undertaken in the context of the expected behaviour of CSR activities. Risk management may involve the reduction of harm to the organisation, but CSR outlines a wider approach, in terms of the lessening of harm to the wider society (Warhurst 2005).

In conclusion CSR as risk management needs to undertake a broader approach due to the connections between the organisation and society. Risk management addresses uncertainties and these are part of the changing context within which the organisation operates and therefore needs to include both economic and social issues. However, there may be difficulties with risk management in countries where regulations are weaker.

The third section will consider CSR from the approach of corporate philanthropy. Corporate philanthropy is defined as charitable donations made by organisations and is described as a desired responsibility of an organisation as per Carroll’s CSR pyramid (1991) (Crane, Matten and Spence 2014). Motivations for philanthropy may vary, but these charitable donations may be underpinned by economic motives such as increasing sales or to improve the public image (Crane, Matten and Spence 2014). Porter and Kramer (2002) argue that philanthropy is becoming more strategic for the organisation and in order to be effective for the organisation, in terms of achieving competitive advantage, needs to be assessed in terms of the economic and social impact of the philanthropic action. If an organisation’s CSR activities are strategic, this will support their competitive advantage (Husted 2003). For example, the organisation is part of the society within which it operates, so therefore its actions, positive or negative, impact on this society. If an organisation needs skilled workers in order to grow, philanthropy which improves the local education system could have both a societal and economic benefit (Porter and Kramer 2002).

An organisation may only have a limited knowledge of the society within which it operates in terms of the marketing and economic knowledge or it may be seeking to enter a new market. Here in order for philanthropic activities to have the greatest impact, it may be that partnerships with non-government organisations may be sought (Warhurst 2005). These partnerships may benefit organisations in terms of building relationships and trust within the local context and this may in turn provide access to a market for the organisation as well. Here the consideration of the internal and external context of philanthropy may increase its benefit to both the organisation and the society within which it operates.

There are a number of routes by which an organisation may choose to undertake philanthropic activities in order to gain the most benefit (Husted 2003). Three different options are suggested which include charitable contributions; an organisation-led project or a collaboration between the organisation and an NGO. Blowfield and Murray (2011:244) suggest a form of philanthropy called ‘venture philanthropy’. This focuses on the social impact of the philanthropic action by working in partnership with NGOs in order to alleviate a social issue (Blowfield and Murray 2011). Here the desired activity of the philanthropic activity considers the context within which it is operating in order to create benefits for the organisation and its community by reducing harms. This activity arguably creates a greater level of CSR for the organisation as it may be seen to be undertaking a role of corporate citizenship in the performance of its duties not only to itself, but to others (Crane, Matten and Moon 2008). Corporate citizenship, in terms of CSR, conceptualizes the role of the organisation in society in terms of their responsibility, such as philanthropic actions as per Carroll’s CSR pyramid (Crane, Matten and Spence 2014). However, it is the way in which the philanthropy is undertaken which seems to have the greatest impact on societal issues (Husted 2003). This includes whether the CSR as corporate philanthropy aligns with the organisation and the society which the philanthropy is aimed at. For example the donation of food by supermarkets to food banks has a number of CSR as corporate philanthropy elements such as a charitable donation, reduction of food waste and enhancing the reputation of the supermarket as helping the community within which it is based (Willsher 2015).

In conclusion, CSR as corporate philanthropy may undertake a number of forms including charitable donations and partnerships with NGOs. There are different motivations for corporate philanthropy and these may include increasing sales or improving the company image. The approach to philanthropy may depend upon the strategy of the organisation. If the organisation’s strategy and philanthropy are closely aligned, competitive advantage may be created.

Bibliography

Basu, K. and Palazzo, G. (2008) ‘Corporate Social Responsibility: A Process Model of Sensemaking’ Academy of Management Review Vol. 33 (1) pp122-136

Blowfield, M. and Murray, A. (2011) Corporate Responsibility 2nd ed. Oxford: Oxford University Press

Crane, A. and Matten, D. (2010) Business ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalisation 3rd ed. Oxford: Oxford University Press

Crane, A., Matten, D. and Moon, J. (2008) Corporations and Citizenship 1st ed. Cambridge: University Press

Crane, A., Matten, D. and Spence, L.J. (2014) Corporate Social Responsibility: Readings and Cases in a Global Context 2nd ed. Abingdon: Routledge

Friedman, M. (1970) The Social Responsibility of Business is to Increase Profits The New York Times Magazine 13 September 1970

Griseri, P and Seppala, N. (2010) Business Ethics and Corporate Social Responsibility 1st ed. Andover: Cengage Learning

Haigh, M. and Jones, M.T. (2005) ‘The Drivers of Corporate Social Responsibility: A Critical Review’ Economic Forum on Global Business and Economics Research, Istanbul, 2005. Ashridge, UK, Ashridge Business School 9pp.

Husock, H. (2013) ‘The Bangladesh Disaster and Corporate Social Responsibility’ Forbes.com. May 2, [online] Available at http://www.forbes.com/sites/howardhusock/2013/05/02/the-bangladesh-fire-and-corporate-social-responsibility/

Husted, B. (2003) ‘Governance Choices for Corporate Social Responsibility: to Contribute, Collaborate or Internalize?’ Long Range Planning Vol.36 (5), pp.481-498

Institute of Risk Management (2015) ‘Risk Management’ [online] Available at https://www.theirm.org/about/risk-management/

ISO (2013) ISO 26000 – Social responsibility [online] Available at http://www.iso.org/iso/home/standards/iso26000.htm

Porter, M.E. and Kramer, M.R. (2011) ‘Creating Shared Value’ Harvard Business Review Vol.January-February 2011, pp.2-17

Porter, M and Kramer, M.R. (2002) ‘The Competitive Advantage of Corporate Philanthropy’ Harvard Business Review Vol.80 (December), pp57-68

Power, M. (2004) The Risk Management of Everything 1st ed. London: Demos

Warhurst, A. (2005) ‘Future roles of business in society: the expanding boundaries of corporate responsibility and a compelling case for partnership’ Futures Vol.37 (2-3), pp.151-168

Willsher, K. (2015) ‘Man who forced French supermarkets to donate food wants to take law global’ The Guardian. May 25 [online] Available at http://www.theguardian.com/world/2015/may/25/french-supermarkets-donate-food-waste-global-law-campaign

This work was produced by one of our professional writers as a learning aid to help you with your studies

Mergers and acquisitions have long been an established form of corporate development to increase the strength of a business in an array of areas. The logic behind the Daimler and Chrysler merger was obvious, with Neubauer et al (2000) elaborating that it would potentially make the company an automobile powerhouse internationally and not just in mainland Europe. Furthermore, both companies felt that they were individually too small to challenge on a global scale in the long term. Chrysler were in agreement and believed the merger would generate enhanced prosperity. In 1998 Daimler paid $38 billion to takeover Chrysler in a horizontal merger (The Economist, 2000). The advantages of such a formidable merger are massive, with Gaughan (2007) believing that the primary benefits of a merger are synergy, value creation and competitive advantage. The merger of Disney and Pixar has symbolised these benefits with Barnes (2008) indicating that since 2006 Disney’s stock rose by 28% in 2008 and revenue streams have continued to increase substantially. The two firm’s adopted a united approach, utilizing their expertise to increase the quality of their products. With Daimler ranked 17th and Chrysler 25th globally in 1988, the amalgamation would undoubtedly boost the value of the combined company, whilst also exploiting economies of scale which would allow the company to maximise profits, increasing share value. The sum of the whole was anticipated to be greater than the two parts. The merger was claimed to be a ‘merger of equals’ where the expertise and knowledge of the two companies would be combined to forge high quality marketable products.

In reality this was not the case with Daimler thrusting their authority over Chrysler by installing German executives into senior positions within Chrysler. The scale of the failure of the DaimlerChrysler merger was illustrated when Daimler sold Chrysler to Cerberus for $7.8 billion in 2007, an astounding loss on what they had invested for Chrysler. Jensen and Ruback (1983. P.43) stated that “on average target shares increase in price from 16% to 30% around the date of the tender offer”. This does offer reasoning for why Daimler incurred such a loss. However, the issues are much more complex than this simple explanation. Jensen and Ruback (1983) believed such direct action was critical for corporate control. Sudarsanam and Mahate’s (2006) research would support this claim as they identified that hostile takeovers in nature tended to produce higher returns than a friendly takeover. From this aspect such a strong action was recommendable to achieve control. Johnson and Scholes (2000) believed a SWOT analysis was an effective method isolating the opportunities gained from a merger. Indeed such an analysis portrayed that the merger would allow massive market power growth, value creation and competitive advantage. A SWOT analysis in regards to the merger has been created below to illustrate the strengths, weaknesses, opportunities and threats of the merger.

Daimler and Chrysler Merger SWOT Analysis

Strengths

Savings through economies of scale
Large corporate brands
Increased capital strength
Competitive advantage through size

Weaknesses

Difficult to control and direct such a large organisation
Two diverse cultures (European & American) to infuse
Different customer bases

Opportunities

Entry into new markets (Particularly Asia) and market expansion
Innovation through combined expertise
Potential to become a dominant market leader

Threats

Such a large merger can be high risk to the existence of both companies
Newly formed DaimlerChrysler lacks any corporate identity, customers may not align with it
Cultural Differences

Matsumoto (1996, p.16) defined culture by stating that “culture is the set of attitudes, values, beliefs and behaviours shared by a group of people, but different for each individual, communicated from one generation to the next”. In contrast to the thought of Jensen and Ruback (1983) the ousting of management violated the long established culture within Chrysler, which in turn was the catalyst for the cataclysmic failure that was the DaimlerChrysler merger (Neubauer et al, 2000). Employees resisted the European style which caused great conflict and tension between the two organisations. Incidentally, this compromised the communication process, resulting in poor products and disappointing sales in relation to the size of the merger. Pritchett (1997, p.7) identified “a failure rate of 61% in acquisition programs, with failure defined as not earning a significant return”. This was very much the case for DaimlerChrysler, with the BBC (2000) reporting a record low share price of $42.79 from a high of $108 in 2000 for the company. Just two years into the merger performance was plummeting. The BBC (2000) also revealed that in contrast the ‘merger of equals’ the Daimler chairman, Jurgen Schrempp actually viewed Chrysler as a division of Daimler and not as a partnership. As eluded to above, Schrempp directed Chrysler as a European company by replacing Jim Holden, the Chrysler president with Dieter Zetsche. Forcing this European style programme of change was greatly contested and fuelled disengagement from staff at Chrysler. Through Schein’s (2010) theory of ‘The Organisational Iceberg’ it is clear to isolate culture as an area which can be one of the most challenging barriers to introducing change. Schein (2010) attributed culture as part of the informal organisation which influences values, beliefs and conflict. If this is not confronted then attempt to integrate change will become extremely difficult (Senior and Swailes, 2000). Gertsen et al (1998) proposed that this fierce resistance to change was due to the fact that employees emphasise cultural differences to demonstrate their distinctiveness and social identity.

Hofstede’s (2002) ‘Cultural Dimensions Theory’ found that culture within different organisations was influenced by which country they resided in. He developed the dimensions of national cultures which consisted of the power distance index, individualism versus collectivism, uncertainty avoidance index, masculinity vs femininity, long term orientation versus short term orientation and indulgence versus restraint. Hofstede (2002) found that these dimensions all varied in organisations depending on what their national identity was. From this it is clear to appreciate the huge problem of attempting to amalgamate a European and an American culture as there are so many variables. Daimler was very rigid and bureaucratic with Chrysler in contrast being much more informal. Daimler and Chrysler by their very cultures were incompatible, stressing the need for an effective change management programme. Haslam and Ellemers (2005) believed that there was positive correlation between the level of employee’s social identification towards the organisation and performance. It is apparent that a key reason for DaimlerChrysler’s drop in share price in 2000 was due to many of Chrysler’s employees seeing little association with themselves and their counterparts of Daimler. The companies in isolation varied in so many ways. For instance Daimler had a brand image of being a high end luxury brand while Chrysler was a low end cars and trucks manufacturer. These contrasts meant defining the very identity of the merger was plagued by paradox’s which meant both employees and customers failed to connect to DaimlerChrysler. Daimler had instilled a great emphasis on the operational and business synergies of the merger, seemingly ignoring the implications of culture.

Human Resource Management

The investment decision is one that is integral to any success of the allocation of capital by a company. Pike et al (2012) stated that the “investment decision is the decision to commit the firm’s financial and other resources to a particular course of action”. With culture being the predominant factor of the DaimlerChrysler merger’s demise, the HRM policies of the chairman at any given time were equally responsible. Daimler had envisioned lucrative rises in profit yet they failed to invest in a strategic human resource management process which would introduce the desired change in an effective manner (Gaughan, 2005). Schuler and Jackson (2001, p.239) attributed the importance of HRM to the interpretation that “companies today need to be fast growing, efficient, profitable, flexible, adaptable, future ready and have a dominant market position”. HRM is critical to implementing these factors which the DaimlerChrysler merger had lacked greatly, providing evidence as to why in the 21st century specifically that they crumbled. The transition of management and integration must be done in a systematic and people orientated approach (Schuler and Jackson, 2001). The HR issues associated with mergers can be categorised into two unique phases;

Pre-Merger: Involves an analysis of the cultural differences and other issues such as the impact on employee morale. This stage reinforces the need for human resource planning as such an analysis would demonstrate major challenge. Solutions to such difficulties would be to modify the recruitment and development process whilst introducing specific appraisal systems. The protracted difficulties would be allocated an effective change management plan by the HRM department. However, Daimler critically undervalued this crucial aspect of a potential merger, which would have long term effects as explained.

Post-Merger: The reality of the impact of the merger on HR related areas is revealed at this stage. The diverse HRM practices can unsettle staff, with Chrysler’s staff resenting the European style of management, resulting in high levels of intransigence. Such emotional reaction diverts staff focus away from productivity, contributing heavily to laboured performance. The workshops devised by Daimler were not extensive enough to combat the massive cultural gap.

It is imperative that strategic HRM is implemented to adjust a company’s HRM strategy to that of the business strategy. For example Cisco has a culture constructed around risk taking and ambition. If they find that a protracted merger does not embody these values then they will refuse to force their culture on to a company, abandoning the prospect of the merger, such is the scale of problems which culture can present. There was also serious contemplation of separate headquarters such was the dismal level of communication between the two firms. Directions need to be from a centralised power source who is respected with Handy (1993) suggesting that this was the ideal way to assume control and maintain effective decision making. Chrysler’s flat structure when compared to Daimler’s hierarchical structure made it extremely difficult to initiate any HRM directives as both companies had different ways of doing so. The post-merger stage caused unprecedented difficulties for the merger as a result of little pre-merger analysis being undertaken. The cross-cultural differences were allowed to manifest into a massive concern with both Schrempp and Zetsche underperforming in their roles as chairmen of the merger. They distinctly did not commit their resources to developing training programmes which would have aided the alignment of Chrysler’s staff to that of the overall vision of Daimler. Tannenbaum and Yukl (1992) firmly contested that staff training was an area which should be reviewed regularly to ensure staff are being trained in accordance with the strategy of this business. Daimler did initiate HRM policies, but there was a lacking in depth. Regular staff appraisals and cross cultural learning days would have been methods of narrowing the gap between culture (Tannenbaum and Yukl, 1992).

Conclusion

From analysing the development and subsequent failure of the DaimlerChrysler merger it is abundantly clear that HRM’s involvement in the change management process is integral. To overcome cultural issues, a tailored strategic HRM policy must be implemented such is the formidability of cultural factors. Daimler failed to realise just how potent the resistance of change can be and that as explained, originates from the informal structure of a company. It is undeniable that the Daimler and Chrysler merger had the potential to dominate the automobile industry due to their individually established size and profit margins. However, it was a mammoth failing as the two companies in reality were never able to amalgamate into a single corporate identity. AOL and Time Warner was a similar failing with the $164 billion deal eventually resulting in Warner’s stock diving by 80% (Bewkes, 2010). AOL’s problem was that they did not anticipate that wireless internet and other relevant technology would revolutionise the broadband industry. They failed just like Daimler to analyse their threats and assess whether such a merger was of value. The Daimler and Chrysler merger was only a failure because Daimler underestimated the power that culture can forge. Strictly speaking, the merger for both companies was disastrous due to the stark culture gap, but equally so, this challenge was not managed effectively by the relevant departments. Perhaps the collapse of this huge merger can be embodied by Daimler’s chief of passenger cars, Juergen Hubbert who is quoted as saying “we have a clear understanding: one company, one vision, one chairman, two cultures” (The Economist, 2000).

Reference List

Barnes, B. (2008) Disney and Pixar: The power of the prenup. The New York Times. [Online] Available from: http://www.nytimes.com/2008/06/01/business/media/01pixar.html?pagewanted=all&_r=0

BBC. (2000) DaimlerChrysler shares hit new low. [Online] Available from: http://news.bbc.co.uk/1/hi/business/1090975.stm

Bewkes, J. (2010) ‘AOL merger was the biggest mistake in corporate history’, believes Time Warner chief Jeff Bewkes. Telegraph. [Online] Available from: http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/media/8031227/AOL-merger-was-the-biggest-mistake-in-corporate-history-believes-Time-Warner-chief-Jeff-Bewkes.html

Gaughan, P.A. (2005) Mergers: What can go wrong and how to prevent it. New Jersey: John Wiley & Sons, Inc.

Gaughan, P.A. (2007) Mergers, acquisitions and corporate restructurings. 4th ed. New Jersey: John Wiley & Sons, Inc.

Gertsen, M.C., Soderberg, A.M. and Torp, J.E. (1998) Cultural dimensions of international mergers and acquisitions. Berlin: De Gruyter.

Handy, C. (1993) Understanding organizations. 4th ed. England: Penguin Books.

Haslam, S.A. and Ellemers, N. (2005) Social identity in industrial and organizational psychology: Concepts, controversies and contributions. International review of industrial and organizational psychology, 20 (1), pp.39-118.

Hofstede, G. (2002) Cultures consequences: Company values, behaviours, institutions and organizations across nations. 2nd ed. Great Britain: SAGE Publications, Inc.

Jensen, M. and Ruback, R.S. (1983) The market for corporate control: The scientific evidence. Journal of Financial Economics, 11 (4), pp.5-50.

Johnson, G. and Scholes, K. (2000) Exploring corporate strategy. Harlow: Pearson education.

Matsumoto, D. (1996) Culture and psychology. CA: Brooke/Cole.

Neubauer, F., Steger, U. and Radler, G. (2000) The Daimler/Chrysler merger: The involvement of the boards. Corporate Governance: An International Review, 8 (4), pp.375-387.

Pike, R., Neale, B. and Linsley, P.M. (2012) Corporate finance and investment: decisions and strategies. 7th ed. Great Britain: Pearson Education

Pritchett, P. (1997) After the merger: The authoritative guide for integration success. Texas: Pritchett and Associates, Inc.

Schein, E.H. (2010) Organizational culture and leadership. 4th ed. San Francisco: Jossey-Bass.

Schuler, R and Jackson, S. (2001) HR issues and activities in mergers and acquisitions. European Management Journal, 19 (3), pp. 239-253.

Senior, B. and Swailes, S. (2000) Organizational Change. 4th ed. Edinburgh: Pearson Education Limited.

Sudarsanam, S. and Mahate, A.A. (2006) Are friendly acquisitions too bad for shareholders and managers? Long term value creation and top management turnover in hostile and friendly acquirers. British Journal of Management, 17 (1), pp.10-17.

Tannenbaum, S and Yukl, G. (1992) Training and development in work organizations. Annual Review of Psychology, 43 (2), pp.339-441.

The Economist. (2000) The DaimlerChrysler emulsion. [Online] Available from: http://www.economist.com/node/341352

This work was produced by one of our professional writers as a learning aid to help you with your studies

Introduction

The globalisation process that has been occurring and indeed accelerating in recent times has been due to various factors; changes in information technology have given the impression of reduced physical distance, and so have the advances in communication technology. Also, the (economic) rise of developing nations has added new actors to the global stage. All this has been greatly aided by the adoption of various forms of international trade agreements including the establishment of economic areas such as the European Union, just to mention the most prominent example.

Whatever the causes and nature of the globalisation process, in this context the internationalisation of an individual firm has gained more and more importance as firms now have the need, and at the same time the incentive, to enter new countries and markets quickly and effectively, in order to exploit the opportunities that the global stage offers, and to avoid being left behind by their rivals.

There are different motives that can lead to a firm’s internationalisation decision, and different choices that the firm’s management has to make as to the mode of entry into the international market. The aim of this essay is to outline and critique some of the various theories that have been presented by academics, which try to describe how and why the internationalisation process occurs.

The UPPSALA Model

The Uppsala model describes the internationalisation process by a firm as a gradual and incremental phenomenon whereby the expansion into a new country, and therefore into a new market, happens in subsequent progressive steps, starting from exports into the new markets and aiming to the establishment of operations in that country/market (Johanson and Vahlne, 1977). The key to this process is the experiential learning or knowledge gained by the individuals who work in the firm as they proceed with the expansion. Each step in the process is thus a platform for the next step, and the firm can then expand into other countries and markets. Also, this model postulates that the expanding firm will try to enter markets and countries to which it feels closer to, and with which the psychic distance is smaller, subsequently progressing to countries and markets which are further away (not merely geographically but from a psychic distance point of view) and more different. It is a stages-based approach which has a sequential take on the internationalisation process (Whitelock, 2002).

The model has been criticised for its simplicity and perhaps excessive generalisation. Forsgren (2001) for example, addresses the scope and nature of the organisational learning that the model assumes, which only really considers the experiential learning by the organisation’s management, while in practice there may be other ways in which the learning occurs. For instance, firms can learn through imitation of their competitors, by altogether taking a radically different approach from the existing one, or even by simply acquiring other firms that already operate in the new market and thus possess the relevant knowledge and/or skills.

Another criticism is the one-dimensioned approach of this model, whereby the internationalisation process occurs through exports via a third party middleman first, then via a sales subsidiary, and finally through the establishment of production facilities in the new market. This process may not be so straightforward in practice and firms may use other, even mixed approaches, depending on the individual markets they are considering. In this respect, Buckley et al (1987) analyse the case of European firms in Japan, which mostly favour the joint-venture route as a means of entry into the market.

Firms can even have a different goal from the establishment of production facilities abroad. For example, licensing may be the strategy of choice for high-technology companies (Root, 1998).

A similar model to the Uppsala model is the Innovation model as developed by Cavusgil in 1980 with its subsequent refinements, however, these “explicitly or implicitly build on Johanson and Vahlne’s contribution” (Andersen, 1993: p.212), and therefore they are not discussed in this essay.

The Eclectic Paradigm

The eclectic paradigm as formulated by Dunning (1988) seeks to explain the internationalisation process by underlining the importance of three main conditions that influence the firm’s decision to internationalise its operations. Firstly, the company has to enjoy ownership advantages relative to its indigenous rivals (for example trademark rights, returns to scale, certain entrepreneurial skills etc.). Secondly, the market to be entered must be attractive in terms of the resources and factor endowments it enjoys (e.g. lower wages, certain natural resources etc.). Thirdly, there must be an advantage for the firm in internalising its production, that is to say in producing the goods or providing the services itself rather than offering them through contractual arrangements with a third party. Thus, the internationalisation process is viewed as a rational one, based on the evaluation of its benefits as compared to its costs.

This approach may be too simplistic, particularly in the light of the risk diversification theory expressed by Rugman (1979). This author points out that the same set of circumstances in relation to a certain investment opportunity in a foreign country may be assessed differently by different firms, according to their perception of, and attitude towards risk, among other things. Firms will often seek to diversify their risk and distribute their portfolio of activities accordingly. Therefore, with reference to the eclectic paradigm, different firms may act differently in relation to the same set of ownership, locational, and internalisation advantages, and the model will be deficient to the extent that it cannot take into account the firm-specific circumstances and factors that ultimately influence the internationalisation decision.

Industrial Networks and the Interaction Approach

The above theories and models, while making some certainly valid if somewhat disputed points, run the risk of being uni-dimensional inasmuch as they only really consider the viewpoint of the individual organisation that takes the decision to internationalise. However, organisations do not exist in a time-space vacuum: they interact with the world around them, which is made up of a network of other agents, and this in turn influences their decisions as to whether, and how to internationalise their operations.

This is known as the Interaction Approach, developed by the International Marketing and Purchasing (IMP) Group, which departs from other theories on four levels. Firstly, it challenges the view and consideration of a “single discreet purchase”. Secondly it challenges the assumption of a “generalised and by implication passive market”. Thirdly, it challenges the “atomistic” and perfectly fluid view of the market “with ease and speed of change between different supplier for each buyer”, and very low or no barriers to entry and exit from the market for those suppliers. Fourthly, it challenges the separation in the analysis of the buying and selling processes as if they were totally distinct and not influenced by one another (Hakansson, 1982: 1).

This approach identifies four sets of factors or variables as being key to the establishment and maintenance of fruitful relationships between the various agents (most notably buyers and sellers), and therefore to the internationalisation decision: the interaction process itself and its structure, the atmosphere in which the interaction takes place, the parties involved in the interaction process, and the environment in which this occurs (Woo and Ennew, 2004).

A criticism that has been levelled to this approach is that, while it goes in the right direction, it perhaps does not go far enough in the analysis of the interaction network that the expanding firm is involved in, and other, more detailed and specific dimensions of the phenomenon should be considered (Fletcher, 2008).

Born Globals

The so-called ‘born global’ firm has been defined as “a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries” (Oviatt and McDougal, 1994: p.49). Thus, this view of the internationalisation phenomenon differs from the theories outlined above in that, while the latter adopt a sequential and progressive view of the firm’s expansion into new countries/markets whereby domestic success is considered an antecedent to international expansion, the born global definition implies that said expansion can even occur simultaneously to the domestic phase of the firm’s growth, or at least soon after, in an accelerated manner.

A review of the extant literature on the born global phenomenon was conducted by Sultan and Wong (2011), and this highlighted that various theoretical approaches have been used to explain and describe the born global phenomenon, spanning from studies emphasising the importance of foundational resources (particularly knowledge) within the firm, to models that focus on the importance of networks, or which stress in an evolutionary sense that some firms are simply better than others at exploiting their resources and creating new knowledge, thus achieving better performance.

These authors however, also highlight that the born global approach as it stands presents some gaps, more specifically with regards to the antecedents of the born global phenomenon in terms of managerial behaviour and preferences, and with regards to the outcomes in terms of the born global’s strategic (as opposed to purely financial) performance. This critique is corroborated by Zahra et al. (2005), who point towards the internationalising management’s motivations as well as cognitive abilities as key determinants of the internationalisation decisions and processes. As for the performance of the born global firm, Cavusgil and Zou (1994) argue that exporting firms have multiple goals in their sights, not just financial but also strategic (e.g. establishing a presence in a strategically important market, or simply ensuring their product is known outside of the existing markets). Thus the born global approach needs to address these gaps in order to become a more comprehensive framework that can explain the internationalisation phenomenon.

Business Strategy Approach

The business strategy approach to the process of firms’ internationalisation revolves around the concept of businesses making strategic choices as to whether to expand in new countries and markets, based on the practical reality of certain specific variables that they may face during the process itself . Reid (1983), as referenced by Whitelock (2002), states that these variables include the type of market the organisation faces and its opportunities, the attitudes, preferences and behaviour of the individuals who work for the company, and the firm’s endowment of resources.

ore specifically with regards to the market the firm is trying to enter, other authors identified three factors which are key to the choice of market the expanding firm might make. These are the new market’s “accessibility, attractiveness and psychic distance” (Turnbull and Ellwood, 1986: 188). On the other hand, these authors suggest that for the purposes of deciding upon the organisational structure to adopt, more internal variables and factors may play a key role, such as the management’s preferences, technological resources and the organisation’s history (Turnbull and Ellwood, 1986).

Although this approach tries to take a more empirical and practical view of the internationalisation phenomenon, its limitation may lie precisely in the fact that in practice too many factors or variables may be considered relevant or even key to the internationalisation process, depending on each specific instance of an internationalising firm, and therefore it may not be easy to draw universally valid conclusions.

Conclusion

The various theories on internationalisation expressed above address different aspects of the firm’s internationalisation decision, and they all have their merits. The Uppsala model is more concerned with experience and the knowledge derived from it as a key influential factor in the internationalisation decision. The eclectic paradigm focuses on the cost of the transaction leading to the firm’s presence in the new market. The born global approach departs from the stages-based, gradual and sequential approaches to address the simultaneous or at least accelerated expansion of certain firms, while the Interaction approach takes into account a number of different actors and the environment which the internationalising firm tries to enter as being key to the decision. Finally, the business strategy theory states that the firm’s decision will depend on the managerial philosophy as well as the kind of opportunity the market is presenting and the resources available to the firm. None of these theories and models can be said to be comprehensive or exhaustive, so perhaps a different approach is needed, one that manages to select and condense the key components and factors of each, so as to cover most if not all of the relevant angles

References

Andersen, O., (1993) On the Internationalisation Process of Firms: A Critical Analysis. Journal of International Business Studies, 24(2), pp.209-231

Buckley, P.J., Mirza, H., Sparkes, J.R., (1987) Direct Foreign Investment in Japan as a Means of Market Entry: The Case of European Firms. Journal of Marketing Management, 2(3), pp.241-258

Cavusgil, S.T. and Zou, S. (1994) Marketing Strategy-Performance Relationship: An Investigation of the Empirical Link in Export Market Ventures, Journal of Marketing, 58(1), pp.1-21

Dunning, J.H., (1988) The Eclectic Paradigm of International Production: a Restatement and Some Possible Extensions. Journal of International Business Studies, Spring, pp.1-31

Fletcher, R., (2008) The internationalisation from a network perspective: A longitudinal study. Industrial Marketing Management, 37, pp.953-964

Forsgren, M., (2001) The Concept of Learning in the Uppsala Internationalization Process

Model: A Critical Review, Occasional Paper Series. Uppsala University: Eva Wallerstedt.

Hakansson, H. (Ed.) (1982) International Marketing and Purchasing of Industrial Goods: An Interaction approach. Chichester: John Wiley

Johanson, J., Vahlne, J-E., (1977) The Internationalization Process of the Firm-A Model of Knowledge Development and Increasing Foreign Market Commitments. Journal of International Business Studies Vol. 8, (1), pp. 23-32

Oviatt, B.M. and McDougal, P. (1994) Toward a Theory of International New Ventures. Journal of International Business Studies, 25(1), pp.45-64

Reid, S., (1983) Firm Internationalization, Transaction Costs and Strategic Choice. International Marketing Review, Winter, pp.44-56

Root, F.R., (1998) Entry Strategies for International Markets. 2nd Edition. San Francisco: Jossey-Bass Publishers

Rugman, A.M., (1979) International Diversification and the Multinational Enterprise. Farnborough: Lexington

Sultan, P and Wong, H.Y., (2011) The Success of Born Global Firms: A Conceptual Model. Journal for Global Business Advancement, 4(3), pp.224-241

Turnbull, P.W. and Ellwood, S., (1986) Internationalisation in the Information Technology Industry, in Turnbull, P.W. and Paliwoda, S.J. (Eds.) (2013) Research in International Marketing. London: Croom Helm.

Whitelock, J., (2002) Theories of Internationalisation and Impact on Market Entry. International Marketing Review, 19(4), pp.342-347

Woo, K., Ennew, C.T., (2004) Business-to-Business Relationship Quality. An IMP Interaction-Based Conceptualisation and Measurement. European Journal of Marketing, 38(9/10), pp.1252-1271

Zahra, S., Korri, J. and Yu, J. (2005) Cognition and International Entrepreneurship: Implications for Research on International Opportunity Recognition and Exploitation. International Business Review, 14, pp.129-146

This work was produced by one of our professional writers as a learning aid to help you with your studies

Executive Summary

The executive summary of the business plan should summarise in such a way that the sections hang together all that has been included in the ensuing chapters. It should be a distillation of the plan itself – following the same order and pattern of the plan itself so that the reader may easily refer to a chapter for more detail if need be (Jenkin 2014). Depending on where the business currently stands – perhaps a start up or an established business looking to expand, the executive summary should highlight where the business is, where it needs to go, why it needs to go there, what it needs to get there and what can be expected to happen when the business does achieve its startup goals or expansion goals (SBA, 2015).

The Business

If the business is an established business, this section should detail the current position of the business. This should include the product mix offering, the customer segments or groups to which it is offered, the current financial position of the business, the current goals and objectives of the business (which should be Specific, Measurable, Attainable, Relevant and Time-limited), the current strategy of the business (i.e. the competitive advantage of the business) and finally how it currently utilises its resources (Evans, 2010).

Where the business plan is for a start up – this section should set out what the goals and objectives of the business would be again making sure that they are specific, measurable, attainable, relevant and time-limited. Furthermore this chapter should summarise the proposed product mix to be offered and the proposed customer segment or groups to whom it would be offered. The product mix must be presented in terms of its benefit to the proposed customer segments (Evans, 2010).

Market Demand

This chapter essentially details the results of the market audit or market research that should be carried out. The result of the market research presents the platform in which the markets can be defined; that is divided into segments, the target market is identified and the product offering is positioned (Barnett, 1988).

The first step thus is researching the market and business environment (Barnett, 1988). One way of determining market size is by adding the turnover of potential competitors (Evans, 2010). This can be done using a PESTLE analysis. A PESTLE analysis gives an overview of how key drivers such as the population, economic, socio-economic, technological, legal and environmental factors affect the market size and capability (Kotler and Keller, 2012)).

For example, if a start-up plans to begin the manufacturing and sales of a new smart phone in the UK, the population and the percentage of the population that uses a smart phone gives an estimate of the market size of smartphones. The population can be further broken down into age and sex segments to further narrow down the target in terms of the age brackets and sex of the market – this will inform the positioning of the product and the identification of the target market (Hooley et al, 2012). As can be expected a larger market size would be preferred (Kotler and Keller, 2012). The economic and socio-economic factors of the business environment or the market gives insight into the purchasing power of the market – again this should inform the target market and the positioning of the product. For example, if the economy is generally bad, consumers may not be willing to make high end purchases. Similarly, if the gross domestic product of a country is low, high-end products may not be suitable for the market. The technological, legal and environmental factors also affect the capability of the market to make a purchase or how the market now makes a purchase. In the smartphone example, perhaps it has become a trend that consumers now prefer “greener” phones, or the government has passed a law limiting the number of mobile phones one person can have or technological advancements now influence the kind of smartphones consumers want or the methods in which they purchase these smartphones – perhaps they now make more purchases online than they do in brick and mortar shops.

The information required to carry out this analysis can be found via the internet on sites such as Office for National Statistics UK which provides statistics on the population, the ratio of men to women across different ages and how much per household is earned in the UK amongst other relevant information. Alternatively or in addition, a customer survey using questionnaires may prove quite useful in determining the preferences of the market.

Having identified the market size, the next step would be to segment the market and identify the market in order to shape the product and value offering. The market can be segmented by geography, demography and behavior (Kotler and Keller, 2012). Having segmented the market thus, one of these segments or all of the segments could be identified as the target market. It is however worthy to note that a larger market segment with an equally attractive purchasing power may be the obvious preference but a niche may sometimes be found in a smaller or sometimes larger market with a low purchasing power. An example of this is insurance companies India, selling policies for as low as a pound because the population of India is quite large making it’s a large market albeit one with a low purchasing power (Kotler and Keller, 2012). It is recommended that a diagrammatic representation of the relevant information sourced for this section is included in this chapter of the business plan to make for easy reference of facts and figures.

Competition and Strategy

This chapter of the business plan should detail the industry attractiveness and the business strategy for competing in that industry. The attractiveness of an industry may be analysed and discovered by carrying out a Porter’s 5 forces analysis which essentially determines the profitability of the industry as determined by the 5 sources of competitive pressure (Grant, 2015), Porters’ 5 forces is diagrammatically represented below in Fig 1.

Threat of substitute products or services – The price customers are willing to pay for a product depends in part on the availability of substitute products (Gran, 2015). In other words, if there are no substitutes of the product or service one offer, customers may be inclined to pay a little more e.g cigarettes and gasoline. In addition the extent to which substitutes depress prices and profits depends on the likelihood of the buyer to switch between alternative products or services (Grant, 2015). For example, if customers are likely to switch from sugar to honey, then the prices and profits of sugar will fall in order to attract more customers.

Threat of Entry – If an industry earns a capital in excess of its cost of capital, it will act as a magnet to firms outside the business (Grant 2015). Put simply, if there are no restrictions on new entrants into the industry the rate of profit will fall towards the competitive level (Grant, 2015). In other words the more competitive the industry, the less profitable it is. Thus it will be worthy to check if there are barriers to entry in that industry such as high capital requirements, product differentiation, economies of scale, governmental and legal barriers etc. The more of these there are the less competitive and the more profitable the industry would be.

Bargaining powers of suppliers and buyers – This refers to whether the buyers are price sensitive or not and these would depend on a number of factors (Grant, 2015). For example in the car manufacturing and sales industry, it importance of a car usually outweighs its cost. Some cars are differentiated as luxury cars thus they are sold at a premium e.g Jaguar Land Rover’s Land Rover. Car manufacturers may have to be insensitive to price in a bid to get the important car parts they require in the manufacturing process, finally car manufacturers today are in intense competition with each other thus they put pressure on their suppliers to reduce prices. The same is the case for supplier bargaining power, except the roles are reversed and the firms in the industry are the buyers and the producers of their inputs are the suppliers.

Rivalry between firms would depend on the number and size of the rivals and whether they are relatively similar (Grant, 2015). If they are similar they may avoid price wars in favor of collusive pricing strategies. Also the extent to which the products are differentiated determines the intensity of competition – more differentiation means less competition and price cuts whilst the opposite is the case (Grant, 2015).

Fig.1 (Porter, 2008)

Having identified the intensity of competition in the industry and the target, the next step would be to identify a suitable strategy of value offering to the customers. In simple terms this could be either through product differentiation or price differentiation (Grant, 2015). Product differentiation strategy offers the consumers a product which benefits the consumer in a way no other product does whilst differentiation or cost leadership offers a price value which is below that offered by other suppliers or producers in the market (Grant, 2015). An example of a company with a cost leadership strategy is Primark.

Financials and Forecasts

There are a number of financial forecasts that could be created for the purposes of a business plan however the most suitable financial forecast for a start-up is a market driven sales forecast as it does not require the detail that a full financial forecast would require. A full financial forecast is more suitable for an already established business as historical financials of that business would be readily available.

It is worthy to note that a market driven sales forecast for a start-up will involve some general estimates which must be justifiable and realistic. A market driven forecast can be presented as shown below

Business Segment or Customer SegmentMarket SizeMarket Demand Growth %/yearForecast Market size(?000) in 3 yearsCompany competitive position on a scale of 0-5Likely market share Likely revenues
ANote 1Note 2Note 3Note 4Note 5Note 6
B
C
Total

Notes
Note 1 – Assuming that the business has chosen segments that already exist in the market – the market size would be readily available by adding the turnover of potential competitors with the same segment. Otherwise a simple multiplication of the proposed price of the product by the size of the market (number of customers in the market) would suffice in estimating a market size.
Note 2 – If it is an existing market, the information as to the growth trends of the market would be available on the internet (it is important to use a reliable source such Financial Times or Bloomberg). The average rate growth rate can then be used to predict the market growth rate for the next 3 years for each segment. Assuming that the growth rate remains constant makes it easier.
Note 3 – To determine the forecast market size in the next three years, the, the growth rate of the market size over the last three years could be examined to arrive at an average figure which can then be used to forecast the market size in the next three years.
Note 4 – The competitive position of the company in the next three years on a scale of 0 -5 (5 being the highest) may be determined by figuring out how much market share the company can realistically acquire in each year. For example if the company is starting up the fourth mobile phone network in a country that already has three, it is unlikely that the company would have a 25% market share in three years, rather it may have between 8-10% following an intensive marketing campaign (Evans, 2010).
Note 5 – as explained in note 4.
Note 6 Likely revenue should be informed by the market size divided by the market share and then multiplied by the price per unit of the product. The revenue forecast in 3 years’ time should be determined by the growth rate of the market and the market share of the company.
Control

Control involves a system of controlling an organisation’s expenditure over a period of time such as budgeting, variance analysis, and internal and external auditing (Evans 2010). However where a start-up is concerned, budgeting may be more suitable for controlling the expenditure of the company after its first year in business.

Funding

The following are the most popular and relevant sources of funding for a startup; self-funding, friends and family, small business grants, loans or line of credit, start-up incubator, angel investor, venture capital and partnership (Zwilling, 2010).

References

Barnett, W. (1988). Four Steps to Forecast Total Market Demand. Harvard Business Review. Retrieved 9 June 2015, from https://hbr.org/1988/07/four-steps-to-forecast-total-market-demand

Evans, V. (2011). The Financial times essential guide to writing a business plan. Harlow, England: Financial Times/Prentice Hall.

Grant, R. (2015). Contemporary Strategy Analysis (8th ed.). West Sussexx: Wiley and Sons.

Hooley, G., Piercy, N., & Nicoulaud, B. (2012). Marketing strategy & competitive positioning. Harlow: Financial Times Prentice Hall.

Jenkin, M. (2014). Small business tips: how to write a business plan executive summary. the Guardian. Retrieved 9 June 2015, from http://www.theguardian.com/small-business-network/2013/aug/22/small-business-tips-write-business-plan-executive-summary

Kotler, P., & Keller, K. (2012). Marketing management. Upper Saddle River, N.J.: Prentice Hall.

Porter, M. (2008). The Five Competitive Forces That Shape Strategy. Havard Business Review, 86(1), 78-93.

Sba.gov,. (2015). Business Plan Executive Summary | The U.S. Small Business Administration | SBA.gov. Retrieved 9 June 2015, from https://www.sba.gov/content/business-plan-executive-summary

Zwilling, M. (2010). Top 10 Sources Of Funding For Start-ups. Forbes. Retrieved 9 June 2015, from http://www.forbes.com/2010/02/12/funding-for-startups-entrepreneurs-finance-zwilling.html

This work was produced by one of our professional writers as a learning aid to help you with your studies

Critically discuss Corporate Social Responsibility (CSR), what are the implications for a firm that does not conduct CSR

Corporate Social Responsibility (CSR) is often mistaken for a 21st century buzz phrase when in fact it has been part of the business lexicon for decades. While some argue that the concept dates back to the Industrial Revolution, the first substantive work was written by Peter Drucker in his 1954 book The Practice of Management. Despite the passage of time, there is still no universal definition of CSR. Corporate Social Responsibility, what it is and how it is implemented, is different depending upon the country a business operates within, the regulatory system they are answerable to and even the industry within which they work. These complications aside, it is necessary to fix on well-rounded definition of CSR in order to critically discuss the concept in this paper. The definition offered by the International Organization for Standardization will be used, as it is general in nature and applicable to most businesses, regardless their country of operation:

“Social responsibility is the responsibility of an organisation for the impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour that:

contributes to sustainable development, including the health and the welfare of society

takes into account the expectations of stakeholders

is in compliance with applicable law and consistent with international norms of behaviour; and

Is integrated throughout the organization and practised in its relationships.” (International Organization for Standardization, 2010)

The one weakness in this definition is the proposition that CSR is about compliance with applicable law. In Dahlsrud’s (2008) analysis of 37 CSR definitions, he identified five critical dimensions. The first dimension is the environment and its consideration in business operations and the second is the social dimension which covers businesses taking into account their impact on society. Both of these dimensions are central to our working definition. The third dimension identified is the economic dimension which looks for a commitment to integrating CSR into business operations is also present as is the fourth dimension which related to how businesses should manage all stakeholder groups in a socially responsible manner (Dahlsrud, 2008). The final dimension, voluntariness, is what is missing from the ISO definition. Dahlsrud (2008) defines voluntariness as businesses making decisions and undertaking activities that are above what is legally required whereas the ISO definition (International Organization for Standardization, 2010) states that mere compliance is acceptable. It is argued that merely complying with the law is better described as good corporate governance and not of itself an act of corporate social responsibility (Ashley and Crowther, 2012; Benabou and Tirole, 2010).

Central to the CSR debate is the notion of how society defines the role of business, and the resulting responsibilities. The classic roles and responsibilities assigned to business are to harness capital and other resources in production, to provide employment and meaningful jobs, to conduct research, development and innovation, to provide goods and services for sale, to create wealth for shareholders, employees, customers and society at large. (Fitzgerald and Cormack, 2011) These core, growth and profit motivated responsibilities do touch on some dimensions of CSR, but comparing these to the responsibilities endowed by CSR shows the amount of change necessary to move towards a socially responsible business model.

One extreme of the CSR debate, often referred to as the neo-classical or traditional conflict approach (Redman, 2005), argues that the only social responsibility of business is to increase profits (Friedman, 1970). The other end of the spectrum is what Redman terms the “true believers” (2005, 78) approach to CSR. This is where a firm has environmental and social commitments in place that are not profit motivated. However, true corporate altruism is rare with evidence suggesting that organisations are more likely to adopt an ‘enlightened self-interest’ approach to CSR (Porter and Kramer, 2006). This is an approach that ties socially responsible activities to profit making activities (Redman, 2005).

Enlightened self-interest has been one of the driving forces behind corporate responsibility in relation to the environment and utilization of scare resources. Inputs to production, from raw products to fossil fuels, are becoming scare and businesses have needed to adapt to these changes or risk extinction (Ashley and Crowther, 2012). So while environmental impacts are now of greater concern to business, it could be argued that this is more the survival of the business than a deliberately socially responsible endeavor (Ashley and Crowther, 2012).

At the same time, society now holds greater expectations of the business community (Scherer and Palazzo, 2011). With higher levels of education (for the most part) and thus knowledge, there is less of a tendency to believe the rhetoric of business. Ashley and Crowther argue that customers are not looking for perfection of business practices, but “the do expect honesty and transparency” (2012, pg.3).

The rise and rise of social media has also created a fast and ubiquitous means for people to call businesses to account for (perceived) socially irresponsible acts (Fitzgerald and Cormack, 2011). The media also has the ability to provide focus and extensive coverage on businesses who have engaged in dubious practices (Fitzgerald and Cormack, 2011). Companies who use third world (often slave) labour are being named and shamed, and forced to reassess their supply chain practices (Ashley and Crowther, 2012).

Despite these inroads, the last decade has seen examples where self-regulation and responsible corporate behaviour have failed spectacularly (Lynch-Wood et al, 2009), causing such events as the Global Financial Crisis. Few, if any, parts of society remain unaffected by these events. The response by policy makers and legislators has been swift and punitive. The net result being greater compliance and reporting requirements across most organisations and industries. Now there exists little distinction between what would have been considered a CSR organisation and one that practices good corporate governance (Money and Scheper, 2007; Mason and Simmonds, 2014).

It would be disingenuous to deny that the CSR movement has not had a positive impact on the business community. However, the overwhelming amount of progress in socially responsible action has been sparked by the depletion of natural resources and the need for businesses to diversify operations, changes in society and societal expectations of business and government legislative response to corporate failings. Being socially responsible is now just good business, an essential component of operational and strategic decision making (Porter and Kramer, 2006). Whichever way it is has been achieved, there are consequences that still exist for organisation that do not conduct CSR.

Both the perception and reality of company performance can be enhanced by adopting CSR. Some pundits argue the payoff is long term, others argue that there is no payoff at all (McWilliams et al, 2006). Above profitability, there are a number of risks organisations face if they do not engage in CSR behaviour. It should be noted that the following is not an exhaustive list, merely the ones with the greatest potential impact.

Reputational damage has always been a key outcome of socially irresponsible business activities (Walker and Dyck, 2014). Reputation can be defined as the aggregate perception of an organisations internal and external stakeholders (Walker and Dyck, 2014) and represents a firm’s single greatest intangible asset. Once reputation is lost, or at least impacted significantly, it is difficult to get back. Changes to the speed with which reputation damaging information can spread is also of concern to socially irresponsible organisations as it is much more difficult to hide or deny wrong doing (Ashley and Crowther, 2012).Further to this, Walker and Dyck’s (2014) research showed a positive correlation between a firm’s reputation and those with corporate social responsibility.

Employee engagement and attracting talent appears to go hand in hand with socially responsible corporate practices (Bhattacharya et al., 2008). The global economy has been described as a ‘knowledge economy’ (Fitzgerald and Cormack, 2011), with the greatest corporate assets residing in the intellectual endeavor of staff. Bhattacharya et al. (2008) also argue that CSR is a way for a firm to show their values in practice and thereby emotionally engaging employees to achieve all of the organisation’s goals.

Engaged staff, at all levels of the business, are crucial to complete in a market place that is increasingly saturated by products and services. Differentiating the offering of one business from another (Servaes and Tamayo 2013) is becoming more difficult to achieve, but CSR related activities provide a point of product differentiation. Environmentally sounds goods (such as recyclable plastics) and Fairtrade food stuffs (such as coffee) are two examples of familiar products that have been differentiated by organisations acting in a more socially responsible manner. Firms who fail to innovate in this way will become followers instead of leaders, and potentially impact their profitability (Blowfield and Murray, 2008).

Smarter product and service development needs to start with managers and leaders thinking outside their traditional product and service offerings (Blowfield and Murray, 2008). The move to a more socially responsible business imperative has opened up new markets and opportunities within which an organisation can expand and prosper (Porter and Kramer, 2006). Those organisations closed to CSR will miss these opportunities and run the risk of being left behind. Even if opportunities are identified, access to capital may become increasingly difficult for non-CSR firms.

With the rise of Socially Responsible Investment, organisations that do not engage in CSR can limit their access to capital and hence, their growth potential (Porter and Kramer, 2006). Furthermore, organisations run the risk of greater regulatory intervention if they do not change to more socially responsible ways.

The recent trend towards regulation of business activities has highlighted the fact that if governments and policy makers identify failures in self-regulation, they are more than willing to step in and regulate business behaviour (Lynch-Wood et al, 2009). Legislation changes and compliance requirements are both restrictive and costly to organisations. If organisations fail to go above and beyond the current compliance requirements, they risk more being imposed on their activities (Benabou and Tirole, 2010).

These risks all have the potential to significantly impact an organisations profitability and in extreme cases, long-term survival. These considerations also should be cause enough for businesses to reconsider their default position on CSR initiatives. Whatever the short-comings of the CSR movement, and the ideologically motivated debates about definition, society and the global economy are radically changed. Being socially responsible is now the only way to do business.

Corporate Social Responsibility is a sound business concept, but long fought debates around its definition have reduced the impact that it may have had on the business community. The fact remains that even if organisations conduct themselves in a socially responsible manner, there is some level of profit-motivated self-interest underpinning these decisions. The greatest headway in moving (forcing?) organisations to be more socially responsible has been societal and environmental changes external to the firm. Global industry and populations have led to the degradation of raw materials and fossil fuels which has made it necessary for many industries to reconsider how they do business. Sustainable development has become core to business operations in most sectors and is now more a case of good business practice than falling under the CSR banner. Society has also seen the impact that business has on their natural environment and communities in general, and is now willing and capable of calling organisations into account for irresponsible, unethical behaviour. In summary, forces external to the organisation have had a greater influence in moving organisations towards the CSR ideal than the CSR movement itself. Regardless of how more socially responsible business practices are achieved, the change is positive and widespread. Substantial risk still remains for those businesses who do not adopt CSR practices. The implications include reputational risk, the inability to attract and retain staff and the possibility of increased regulation. Failing to embrace CSR also has the potential to impact the long-term suitability of an organisation, reducing access to capital, missing opportunities for growth and the failure to differentiate your brand from the rest of the pack. The conclusion being that being socially responsible is no longer optional, it is simply the way good business is done.

References

Ashley, P. and Crowther, D. (2012), Territories of social responsibility. 1st ed. Farnham, Surrey, England: Gower.

Benabou, R. and Tirole, J. (2010), Individual and Corporate Social Responsibility. Economica, 77: 1–19.

Bhattacharya, C.B., Sankar, S., Korschun, D., (2008), “Using Corporate Social Responsibility to Win the War for Talent”, MIT Sloan Management Review, (http://sloanreview.mit.edu/article/using-corporate-social-responsibility-to-win-the-war-for-talent/)

Blowfield, M. and Murray, A. (2008), Corporate Responsibility: a critical introduction, OUP.

Dahlsrud, A. (2008), “How Corporate Social Responsibility is Defined: an Analysis of 37 Definitions”, Corporate Social Responsibility and Environmental Management, 15 (1), pp 1-13.

Drucker, P. (1954), The Practice of Management, Allied Partners, New York.

Fitzgerald, N. and Cormack, M. (2011), The Role of Business in Society. An Agenda for Action, Joint Initiative by the Conference Board, Harvard University CSR Initiative and the International Business Leaders Forum on behalf of the Clinton Initiative. ( http://www.hks.harvard.edu/m-rcbg/CSRI/publications/report_12_CGI%20Role%20of%20Business%20in%20Society%20Report%20FINAL%2010-03-06.pdf )

Friedman, M. (1970), “The Social Responsibility of Business is to Increase its Profits”, The New York Times Magazine, September 13, 1970, pp 122-126.

International Organisation for Standardization 2010, Guidance Standard on Social Responsibility (ISO 26000).

Lynch-Wood, G., Williamson, D. and Jenkins, W. (2009), “The over-reliance on self-regulation in CSR policy”, Business Ethics: A European Review, 18 (1), pp 52-65.

Mason, C., and Simmons, J. (2014), “Embedding Corporate Social Responsibility in Corporate Governance: A Stakeholder Systems Approach”, Journal of Business Ethics, 119, pp 77-86.

McWilliams, A., Siegel, D.S., and Wright, P.M. (2006), “Corporate Social Responsibility: Strategic Implications”, Journal of Management Studies, 43 (1), pp 1-18.

Money, K. and Schepers, H. (2007), “Are CSR and Corporate Governance Converging?” Journal of General Management, 33 (2).

Porter, M.E., and Kramer, M.R.(2006), “Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility”, Harvard Business Review, December 2006, pp 78-93.

Servaes, H. and Tamayo, A. (2013), “The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Awareness”, Management Science,59,(5), pp. 1045–1061.

Redman, E., (2005), “Understanding the Corporate Social Responsibility Continuum”,

LBJ Journal of Public Affairs , 18, pp 72-84.

Walker, K. and Dyck, B. (2014), “The Primary Importance of Corporate Social Responsibility and Ethicality in Corporate Reputation: An Empirical Study”, Business and Society Review,119 (1), pp 147–174.

This work was produced by one of our professional writers as a learning aid to help you with your studies

Introduction

This report outlines some of the key concerns of the Cooperative Groups employees regarding the overall ethical direction of the Group. The Group prides itself on its commitment to ethical business, be it in the fairtrade, environmental or locally sourced areas, and yet it is employees concerns that such standards are inconsistent throughout the Group and are therefore undermining the good reputation of the organisation. This report is particularly critical of the ongoing decision of the group to sell non fairtrade products alongside the groups own fairtrade products, specifically the promotion of these on a national level. In addition, the report emphasises the need to create much stronger links with local communities both as a means of engaging more with the communities in which the group operates, but also to create a more flexible supply structure based on the availability of local products.

Fair trade and non-fair trade

It is the employees considered opinion that the issue of fair trade and non-fairtrade is a key problem within the group’s grocery stores at present. The ethical stance taken by the group in sourcing all of its own brand products from sustainable farms and fair trade networks is certainly to be commended, however, the wider decision which has been taken to still stock products such as Nescafe and Galaxy and Mars chocolate continues to undermine this decision. The ethics of this situation are clear – either one is for fair trade and the wider benefits which this brings, or one is against it and believes that the free market will provide for all. By stocking and thereby profiting from products which do not take this stance the group undermines its commitment to these causes , particularly given the fact that the groups own products in this area are high sellers and are particularly competitive. A stronger commitment here would do much to boost the ethical background of the group.

It is also the employee’s belief that this could be tied in strongly with the Cooperative Banks commitment to development projects in developing nations. It seems ridiculous to be giving with one hand and taking with the other and therefore the employees would like to see a more explicit and concrete commitment on this level which could be taken across the Group as a whole. Much of the key development literature on the problem of poverty in Sub Saharan Africa focuses on the problem of creating sustained investment and providing important markets for export for products. The Cooperative Group is in a unique position as the owner of a large bank and a grocery outlet to provide this support and could be a real leader in this field. The public relations benefits of such an approach do not need to be laboured but more importantly there is a real opportunity to use the organisation for good in the world. With the growth of ethical consumerism and the notion of green marketing there is a real opportunity to make a difference in this sector.

Becoming truly local

It is the experience of many of the Group’s employees that many customers who come to the Groups grocery stores feel somewhat let down by the failure to push forward with stocking local produce. Many of these have highlighted the fact that larger retailers such as Morrison’s and Tesco have made strong headway on dealing with this issue. This issue is a key one in the sense that it engages with several of the key ethical considerations of the Group, as laid out on the Group’s website. These include the environmental considerations of moving products great distances. There is an important issue here with central distribution centres and the way in which these operate. It is often the case that products will be produced in one area of the country, moved to another hundreds of miles away and then returned via a wagon to a point two villages away. This undermines the credibility of the organisation on an environmental level but also on a local level.

Whilst employees appreciate the fact that such operations are often cheaper and are part of keeping the cost down, it is important to acknowledge the good public relations which could be created through enhancing the Group’s commitment to local job creation. A more dynamic supply network would certainly create this as it would require a significant step up in administration for it to be successful. However, the employees of the Group believe that this would be a significant PR coup and would therefore win the Group significant support, particularly in more rural areas. It would combine to create jobs, reduce the carbon footprint of the Group and also help the Group provide a real service to local people. Most people agree that the fresher the produce, the better.

Moving the organisation forward

Whilst this report is critical of the Group on several levels it must be acknowledged that the Group is to be significantly commended, particularly when one considers the current situation with many of its major competitors in the Grocery market. However, in a constantly changing world it is vital for such organisations as the Cooperative Group to continue to show the lead on issues such as local produce, carbon reduction programmes and ethical consumerism. To that end the organisation needs to examine fully what it believes the next level to be. This report embodies some of the views which should be seen as coming from the ‘shop floor’. They are based on the direct experience and views of the man on the street and from those who work in the Group’s outlets. Doubtless there are greater ethical considerations to be made and doubtless there are significant economic and financial aspects to be taken into account. However, for the Group to continue to pride itself on its ethical commitment it does need to take the next step forward.

This report suggests that looking to make radical changes in the sourcing of produce could provide a significant amount of jobs in the country (through the necessary management and administration structures which would be created), could reduce the organisations carbon footprint and would provide fresher and therefore better produce to all of its customers. This would represents a public relations coup and would fall directly in line with the Groups ethical commitments.

A further step which the organisation would like to see is through the role of the Bank. Once again, this is certainly deserving of significant support and plaudits for the work which it has done but the employees once again feel that a more concrete set of explicit principles could further improve both the reputation of the Bank as well as its ethical standing. These principles would also include a commitment to employees of the organisation but would also include the promise of support to small businesses which would be set up in support of the wider Cooperative Group operations. One example here would be of a small firm of delivery drivers which would be operating in support of rural farms in Northern Scotland. These would directly support the work of the Group in the sense of attempting to make the Group more local through sourcing food more locally and would therefore be supported by the Group knowing that there would be strong business there as the structure of the organisation changed.

The current economic climate and the Group

In making these critical comments of the Cooperative Group the employees would like to stress their knowledge and acceptance of the problems currently associated with the economic crisis within Europe and the wider world. However, it remains their belief that the Cooperative Group can become a beacon of what ethical business operations can do for the communities in which they operate. The employees believe that much of the current economic crisis was caused fundamentally by greed, be it the greed of investment bankers who made investments that they knew would not pay off, or invested in projects which they knew were unethical and which would result in damaged livelihoods. The Cooperative Group can stand opposed to these problems by creating a clear charter that it will not pay Directors hundreds of thousands of pounds in bonuses but will reinvest this money in local communities, supporting local farmers and local transport networks, supporting developing nations and the farmers who work there, helping to build links between the nations. It is the belief of the employees that if the Cooperative Group were to move forward and take on this more advanced ethical stance that it would be financially costly in the first instance as infrastructures would need implementing and there would doubtless be problems associated with this. However, it is also the belief of the employees that many people would support such businesses, particularly where they knew that it was directly affecting local business. It is certainly true that for many consumers the major consideration would remain price. However, the employees firmly belief that with hard work and the commitment of the wider Group, these ethical changes can be implemented in a successful manner.

Conclusion and Recommendations

• A stronger more direct commitment to moving the organisation forward in a sustainable and truly ethical manner.
• The Groups stance on issues such as Fair Trade is commendable and has been an important step in raising the profile of products such as chocolate and coffee and the issues surrounding the sourcing of the key commodities which these require.
• However, the Group must now acknowledge that the stance which it is taking on this issue is hypocritical – on the one hand advertising its own advocation of ethical sourcing and the importance of a fair price for growers whilst on the other hand continuing to directly profit from products which do not meet these standards.
• The Group would therefore benefit from a much more clear cut and well defined ethical approach in which its Grocery stores were operated on principles similar if not identical to those of the Food Wholesaler SUMA.
• The Group should oppose the sale of non-fair trade products under any circumstances and should work to source as many products as it can locally in order to support local industries, provide fresher produce to its customers and to provide greater local involvement.
• This process will encourage a greater involvement with local communities and will help the Group in becoming a dynamic and ethical supplier to local communities which becomes a part of these communities rather than being another huge chain which rips the soul out of local values and towns.
• To create an ethical pledge and commitment which will encompass all aspects of the Groups current ethical policies in a much more explicit and coherent way. One key example of this which the employees would particularly like to see is the following – The Group will not only commit itself to sourcing its own brand chocolate from fair trade farms it will actively support such farms with financial assistance from the bank and will undermine the market for non-fair trade products by refusing outright to stock such products.

References and Bibliography

Bevins, Vincent. “Guardian survey reveals shoppers’ green concerns.” The Guardian London: The Guardian, 2010.

Cooperative Group. “Ethical Trading and Fairtrade.” Manchester: Cooperative Group, 2010.

Cooperative Group. “Food Ethics.” Manchester: Cooperative Group, 2010.

Cooperative Group. “Food and Drink.” Manchester: Cooperative Group, 2010.

Klein, Naomi. “No Logo.” London: Fourth Estate, 2010.

Lang et al. “Food wars: the global battle for mouths, minds and markets.” London: Earthscan, 2003.

Moshirian, Fariborz. “Globalisation, growth and institutions.” Journal of Banking and Finance 32.4 (2008): 472-479.

Sachs, Jeffrey. “The End of Poverty: How We Can Make It Happen in Our Lifetime.” London: Penguin, 2005.

Stiglitz, Joseph. “Globalisation and its Discontents.” London: Penguin, 2002.

Stiglitz, Joseph. Sen, Amartya and Fitoussi, Jean-Paul. “Report by the Commission on the Measurement of Economic Performance and Social Progress.” 2009.

Weis, Tony. “The global food economy: the battle for the future of farming.” London: Zed Books, 2007.

This work was produced by one of our professional writers as a learning aid to help you with your studies

Introduction

Changing business needs and industry trends affect all businesses. Some businesses prosper, whiles others barely survive, and many still, close their doors forever. Competitive and adaptive advantages are tools that organisation teams must master to increase their chances of survival. Comprehensive needs analysis increases both competitive and adaptive advantages. Strategic planning is a complex process, especially, when data collection is necessary for success. External data collection adds another layer of complexity to the planning process. There are no guarantees that the data will yield positive results for the decision making process. However, taking precautionary measures, organisations can increase the potential for collecting valuable data. Comprehensive data collection and analysis provides a tool whereby the information collection adds value for the organisation. Surveys, interviews, group discussions, task analysis, performance appraisals, observations, incidental procedures, performance analysis, and external scans each tell a story of the information collected via those mediums. Hence, it is imperative for the experts conducting data collection and comprehensive needs analysis be well versed in their craft if they are to improve existing business conditions. The research conducted herein presents a comprehensive needs analysis for the The-Second-Greatest-Company Corporation.

Comprehensive Needs Assessment (CNA)

Education and employee development is imperative to any organisation. The planning of education and training does not apply to new hires alone, managers and supervisors are equally valued within the organisation. Organisations must ensure that the training and development process is not just a matter of training, but rather to enhance productivity, improve interactive communications, and increase overall return on investments for stakeholders. Hence, all education and training plans must begin with the goals and objectives of the organisation at the forefront of employee development initiatives.

Company Background

This document represents a comprehensive needs analysis conducted on behalf of The-Second-Greatest-Company Inc. (a fictional organisation modeled after a real one; additionally, relevant industry information is factual). The-Second-Greatest-Company is a women owned interior design business started by three college students. The students became friends after taking an art course together. They envisioned an online interior design business that suggested design layouts for college dorms.

The-Second-Greatest-Company Inc. receives orders for interior designs via the internet, as well as, their artwork. Interior designs are reasonably priced beginning at ninety-nine dollars for a single dorm. Prices increase with the space size. The business blossomed enough to catch the attention of venture capitalists (this information from the real company, 2015).

Current Literature

Cekada (2010) discusses an example of an employee who accidentally trips over a bucket. The management team immediately suggests more training. But Cekada (2010) questions that motion. Is it actually necessary to conduct training or could other precautions have been taken to avoid slips and trips? Cekada (2010) suggests that not all issues are training related and cautions against using training where none is necessary.

Rothwell and Kazanas (2003) discuss the different levels of CNA. The first level is conducted for strategic planning purposes. The second relates to coordinative purposes. The third concerns operational needs. Hence, they stress importance in identifying where the needs exist at the different levels.

According to Bresciani (2010), data informs the planning process. The information can be converged with environmental information and forecasts for resource planning and policy creations. Bresciani (2010) asserts that the data collection process is not a decision replacement process. It is the data that drives the decision making processes (Bresciani, 2010).

Karkkainen, Piippo, Puumalainen, and Tuominen (2001) recommend that companies maintain a vision to the future to meet client demands. They believe that companies should continuously plan to exceed client’s expectations with better services and life enhancing products. They posit further that companies must remain proactive in seeking hidden opportunities early in business initiatives. Karkkainen, Piippo, Puumalainen, and Tuominen (2001) suggest that CNA processes must include assessment tools and strategies that highlight unrecognized customer needs.

Karkkainen, Piippo, Puumalainen, and Tuominen (2001) conducted their study with the “new customer” (p. 393) in mind. They wanted to demonstrate that contrary to popular belief, customers do not have the foresight to know what their future needs are. Karkkainen, Piippo, Puumalainen, and Tuominen (2001) found that the clarification experience for determining new customer needs benefitted the participants (various organisation, different industries) by approximately eighty-five percent. As a result, Karkkainen, Piippo, Puumalainen, and Tuominen (2001) also found that the companies felt the needs assessment tools helped them increase new customer awareness by forty percent.

Purpose of CNA

The purpose of this comprehensive needs analysis (CNA) was to collect relevant information with the intent of providing recommendations for business improvement. Included herein is an environmental scan (ES) that serves a dual purpose. The first purpose intends to provide interior design industry awareness. The second purpose is to gather information on business competencies. Finally, training and development recommendations are provided.

Rothwell and Kazanas (2003) discuss CNA as an investigative process necessary to determine where business deficiencies and competency weaknesses exist, and thereafter, devise a plan for corrective action. Cekada (2011) discusses training assessments from a capital and resource return on investments perspective. He considers that properly allocated resources will yield returns and vice versa. Shipley and Golden (2013) recommend using the CNA’s to identify gaps and resolve them with appropriate training initiatives. Muller and Roberts (2010) recommend looking at impending issues and deficiencies from multiple perspectives with the intent to identify problems which can be resolved without training and development initiatives.

Data Collection

Data collection is about information value that translates into desired changes (Rothwell & Kazanas, 2003). The information value comes from evaluating ways to apply different methodologies for desired changes. The collection process should bring to light the knowledge or skills necessary to implement changes. Rothwell and Kazanas (2003) recommend using multiple data collection methodologies.

Lundberg, Elderman, Ferrell, and Harper (2010) advise caution when collecting data because no process can be one hundred percent correct. They argue that people respond with assumptions when they do not have an appropriate answer. Lundberg, Elderman, Ferrell, and Harper (2010) emphasize further that the potential for data redundancy remains ever-present. Bresciani (2010) advises discretion to ensure the process enhances strategic planning process not eliminate activities in it.

Data collection methods used:

Interviews provided insight into the client base, services offered, sales process lifecycle, design process, and what the ownership team expected from freelance designs, as well as, what they offered potential freelancers to join their team.
Interviews with the management team identified management relevant requests concerning their learning and talent development needs.
Surveys from clients identified service gaps, client levels of satisfaction with the services rendered, client opinions on the quality of service provided, and other services clients would like to have in the future.
Surveys taken from college students (major clientele) provided their opinions on the future of the interior design industry, number of times they used interior design services in a full year, their thoughts on carefree interior design services.
Surveys were taken to identify demographic information that will further advance the growth of the company.
Observations provided information on the status of the interior design industry.
Task analysis identified the actual interior design and sales process lifecycle, as well as the actions required to complete a sale.
Task analysis was conducted to examine the freelance design process.
Advisory Committee formed includes four employees, one senior manager, and consultants to gather ongoing talent development information.
Performance documents assessed individual and team production.
Industry Scan provided information on competitors. Two competitors have inferior websites (Decorator, 2015; Homeblue, 2015), hence, giving The-Second-Greatest-Company a higher ranking website. Ibisworld (2015) suggests that the industry is expected to grow at approximately four percent within the coming year. Ibisworld (2015) also predicts positive upward growth for the industry.
Analysis

During the year 2014, the interior design industry experienced downtime as a result of the recession, economy anomalies, and financial instabilities (Ibisworld, 2015). Current business trends indicate that business will blossom in the next five years. Data analysis indicates that the company is interested in expansion opportunities. Survey analysis indicates that clients are satisfied with the services provided, however, they are interested in follow-up services.

Data collection indicates that the ownership team will benefit from leadership development. The team lacks extensive industry and business expansion knowledge. Task analysis shows that freelancers will benefit from sales development skills. The-Second-Greatest-Company team (owners & freelancers) could benefit from networking skills to grow their businesses and take advantage of the predicted industry boom.

Data collection also indicated that confusion existed with current freelancers who were not sure that sales were something they needed to engage in. The freelancers feel that they are artists and designers. As a result, they cannot see how gaining sales training will benefit them. It is suggested that business development workshops are conducted to help the freelance designers understand how they can see themselves as sales people who enhance the lives of their clients.

Summary of Results
The-Second-Greatest-Company Corporation desires to become an industry leader within ten years. Crossley, Cooper, and Wernsing (2013) suggest becoming and remaining proactive in the achievement of leadership goals. Crossley, Cooper, and Wernsing (2013) affirm the complexity of remaining in leadership positions for long. They recommend devising plans that coordinate and direct activities towards achieving leadership goals.
The The-Second-Greatest-Company organisation could benefit from interpersonal communication skills. Perry and Losman (2012) stress the importance of effective communication skills for information exchange. As this company continues to evolve the communication process will greatly enhance their understanding of the industry, their customers, and amongst themselves. Perry and Losman (2012) assert there is great value in improving communication skills because the potential for miscommunication decreases and productivity increases.
The ownership team will benefit from team and leadership development. Grenny, Patterson, Maxfield, McMillan, and Switzler (2013) discuss the inevitably of relying upon others to transact business. They assert that no one can work alone and that opportunities must be present to allow for the development of abilities in working as a team. Grenny, Patterson, Maxfield, McMillan, and Switzler (2013) posit further the organisation success depends upon experts working in concert with one another to complete projects.
Industry is following a positive upward growth at approximately four percent per year. Silber and Kearny (2010) use the recession of 2009 to demonstrate that organisations cannot operate in a vacuum. They posit that economic crisis are not the only reason to remain industry aware, but also because competitors will always look for ways to put you out of business. Silber and Kearny (2010) state that the only industry that appears to do well at the worst recessions, “is the alcohol industry, where year-to-date-sales in 2009 were almost double those of previous years” (p. 41).
The freelance team shows a gap in sales skills. They lack the ability to close sales faster. The lack of sales knowledge interferes with freelancer ability increase sales quotas. Stein (2011) suggest that sales alone will not get the sale, but the ability to use a combination of interpersonal and communicative skills for success. He suggests that clients are high tech and navigate the internet to compare products, services, and prices. Thereby, making the sales process significantly complex.
The Advisory Committee is expected to meet once weekly to develop the training plans and continue scanning the environment for changes. Rothwell and Kazanas (2003) advise that advisory committees work similar to strategic committees because they serve the same purpose of identifying weaknesses and strengths in the education and development plans. Advisory committees can compare current plans to future expectations and set relevant priorities. The advisory committee role in the development process can never be overstated (Rothwell and Kazanas, 2003).
Implications for The-Second-Greatest-Company Management Action

The Above Examples Might Suggest the Following Implications:

The-Second-Greatest-Company management’s team must meet to discuss budget factors that influence the training process further.
The-Second-Greatest-Company management’s team, Advisory Committee, and Consultants must agree upon the talent development specifics and a time line of delivery.
References

Bresciani, M. J. (2010). Data-driven planning: Using assessment in strategic planning. New Directions for Student Services, (132), pp.39-50.

Cekada, T. L. (2010). Training needs assessments: Understanding what employees need to know. Professional Safety. pp. 28-33.

Cekada, T. L. (2011). Need training?: Conducting an effective needs assessment. Professional Safety, pp. 28-34.

Crossley, C. D., Cooper, C. D., & Wernsing, T. S. (2013). Making things happen through challenging goals: Leader proactivity, trust, and business-unit performance. Journal Of Applied Psychology, 98(3), 540-549. doi:10.1037/a0031807

Decorator (2015). Decorator designer guide. Retrieved from http://www.decoratordesignerguide.com/interview40089

Grenny, J., Patterson, K., Maxfield, D., McMillan, R., & Switzler, A. (2013). Influencer: The new science of leading change. McGraw Hill, NYC, NY.

Homeblue (2015). Get matched. Retrieved from http://interior-decorators.homeblue.com/pros/interior-decorators.aspx?gclid=CJXF-t2n9ccCFQoRHwod_1MGyw.

Ibisworld (2015). Interior designers in the U.S.: Market research report. Retrieved from http://www.ibisworld.com/industry/default.aspx?indid=1410

Karkkainen, H., Piippo, P., Puumalainen, K., & Tuominen, M. (2001). Assessment of hidden and future customer needs in Finnish business-to-business companies. R&D Management, 31(4), 391.

Lundberg, C., Elderman, J. L., Ferrell, P., & Harper, L. (2010). Data gathering and analysis for needs assessment: A case study. Performance Improvement, 49(8), pp.27-34.

Muller, N. & Roberts, V. (2010). Seven cures to skipping the needs assessment. Training and Development, pp. 32-34.

Perry, M., & Losman, E. (2012). Themed monthly evaluations: a focus on individual competencies. Medical Education, 46(5), 517. doi:10.1111/j.1365-2923.2012.04247.x

Rothwell, W. & Kazanas H. (2003). The Strategic Development of Talent. MA:HRD Press.

Shipley, F. & Golden, P. (2013). How to analyze and address your organization’s learning needs. Training & Development, pp. 29-31.

Silber, K. H. & Kearny, L. (2010). Organizational intelligence: A guide to understanding the business of your organization for HR, training, and performance consulting. Pfeiffer, San Franscisco, CA.

Stein, D. (2011). Developing Winning Sales Teams. T+D, 65(6), 62.

This work was produced by one of our professional writers as a learning aid to help you with your studies

1. Introduction

The globalization of the economy, internationalization of businesses and emergence of new markets are all key themes in contemporary business. Whereas international business may once have been the province of organisations with sufficient scale and reach, these types of companies – typically multi-national corporations – no longer have a monopoly on this kind of business. Increasing numbers of firms, of varying scale, are confronted with compelling reasons for expanding their activities across multiple national boundaries. In some cases, such motivation includes the knowledge that success in international markets is a pre-requisite for survival; if competitor organisations succeed in international markets, they may achieve the scale and liquidity which affords them sustainable competitive advantage. However, scrutiny of the empirical experience of international expansion suggests that the apparent potential is by no means straightforward to achieve in practice. This raises questions about whether or not it is realistic to envisage a ‘best practice’ in terms of international expansion strategy. Can the latter be conceived of as a specific and transferable management skill, or is it instead reliant upon expertise in a particular sector of business, a market, or a national culture? After all, if proven strategists are found wanting, where can the organisation go in terms of its future practice?

Large, successful and sophisticated businesses have often found that international ventures do not fulfil their promise. Moreover, these failures do not feature in only one sector of the economy; retailers, manufacturers, transport and energy companies have all found that expansion in contemporary markets is easier to plan than to achieve. The relevant strategies were often developed by otherwise successful managers and executives, appointed because of proven track records in similar or parallel enterprises. The retail sector alone furnishes numerous examples of this problem. The previously ascendant US Wal – Mart group eventually abandoned its expansion into the buoyant German consumer market, selling up to domestic rivals Metro (Felsted and Jopson 2011). Sir Terry Leahy of the UK’s Tesco PLC saw his flagship Fresh n’ Easy store venture in the United States rapidly turn into a loss making enterprise (Felsted 2011). The point here is that these large, well-resourced businesses have been in the vanguard of market research techniques which employ benchmark digital data capture to measure consumer behaviour – yet they still failed. It may be that, as the statistics obtained by as Guler and Guillen show, (Appendix Three), firms prefer to target what they perceive as legally secure, politically stable hosts (2005, p.2) A number of empirical questions are raised by these developments. For example, how best can organisations secure and maintain the right kind of strategy formation capacity within their capabilities? Should strategic planning ever be thought of as a continuing capability, or should it instead be seen as a reflexive capacity, more likely to be brought into being by the specific conjunction of factors, i.e. a one-off development?

2. Purpose

The purpose of the proposed study will be to ascertain answers to the following types of question, i.e.

Is there a ‘best practice’ of international business strategy formation which is transferable between business sectors?

Are some elements of strategy formation indispensable?

If so, what are the indispensable elements of strategy formation?

Do the business models of particular sectors render them more or less scaleable in terms of international expansion?

What constitutes the best practice in the development of business strategy for international markets? Such a question will obviously be subject to enormous variables across different sectors of the economy, or types and sizes of business. However, it may be argued that there will be a continued demand for this kind of business expertise, both in terms of strategy development and knowledge management.

3. Conceptual and Theoretical Foundations.

As Czinkota et al indicate, strategy formation should not be conceived as a generic activity or process, since it will to a certain extent be informed by the specific stimulus for the expansion itself, i.e. whether the perceived competitive advantage is based on technological or other kind of advantage (2009, p.228) This is an important consideration, since each organisation has its own motivation for wanting to expand into international markets, as well as varying levels of capability, resources, and preparedness. De Burca, Fletcher and Brown argue, there are numerous reasons for pursuing international expansion, the first of which lays in orthodox competitive strategy, i.e. ‘…in many industries, competitors can access customers almost anywhere…many customers that are going global want their key suppliers to be there to service them. Secondly, technology evolves at different speeds in different countries…if a business is located close to leading-edge technology development, it is likely to be closer to the early adopters phase of new markets…Third, economies of doing business are changing in terms of cost of funds, cost of labour, availability of specialised skills and opportunities for specialisation.’ (2004: p.560).

Some strategic factors are generic, in as much as no firm can realistically overlook them in international expansion. These consist of considerations such as control of the value chain, control of personnel resources, the securing of the necessary financial resources, and a realistic assessment of the associated risks (Muhlbacher et al 2006, p.405). Other factors will arise from the nature of the target markets themselves: emerging economies, for example, will not necessarily feature the ’embeddedness’ of mature Western markets (Doole and Lowe 2008, p.4). As Muhlbacher et al point out, ‘…many international marketing efforts fail not because research was not conducted, but because the issue of comparability was not adequately addressed in defining the marketing research problem…’ (2006, p.123). It is also important to consider the ‘…unconscious reference to our own cultural values when defining the problem we are attempting to research in international markets…’ (2006, p.123). For example, many studies of global expansion have as their focus the strategies of Western multinationals; however, given the flow of globalization, there is no logical reason why they should be restricted to this area. If anything, the strategies of Chinese, Middle Eastern and other corporations may become even more relevant. As Berger argues, globalization may be deemed the single greatest factor in contemporary business, and yet virtually all the assumptions made about it come ‘…either from opinions…or…general economic theories. Analyses based on hard evidence from the experience of societies dealing with these pressures are few and far between.’ (Berger 2006: p.7).

4. Methodology
i. Research Design and Research Strategy.

As Marshall and Rossman argue, a research design should be able to ‘….generate data appropriate and adequate for responding to the research questions and will conform to ethical standards.’ (2011, p.56). In this instance there are several levels of design options to be acknowledged in the overall form of the research. In paradigmatic terms, this is a predominantly qualitative study, which nevertheless acknowledges the points made by Collis and Hussey regarding the relationship between the phenomenological and the positivist positions. As they point out, the distinction between them can rarely be maintained in the context of practical research processes (Collis and Hussey 2003, p.48). This is a point also made by Jupp, who concedes that research paradigms may need to be reconsidered during the process itself (2006, p.213).

At the preparatory stage, it is obviously important to demonstrate that there is a justification for this research, i.e. a ‘gap’ in the relevant knowledge as presented in the relevant secondary literature (Longnecker 2009, p.134). An exhaustive survey of all the relevant secondary literature may be an ambitious objective given the resources available to this study; however, this must be pursued until it becomes clear that the same or similar points are constantly being re-discovered. As Winkler and Metherell point out, the cautious researcher should see a ‘…consensus of opinion among experts that can be used to judge the reputation of an author or source.’ (2011, p.62). By this means, as Patzer points out, a viable context for the study may be established (1995, p.6). It is anticipated that the gaps in the literature will mostly be those arising from new developments in the dynamic of globalization; as Stevens et al argue, ‘old’ information ‘…is not necessarily bad information; however, in many dynamic markets, up-to-date information is an absolute necessity.’ (2006, p.98). As Saunders et al (2009) acknowledge, any generalization based on secondary data should acknowledge that it has been influenced by the culture, predisposition and ideals of those who originally compiled it (p.272).

The study will take account of the major theorists in the relevant areas of scholarship, such as Porter on competitive advantage and national competitive advantage, and Mintzberg et al on strategy. Work such as that of Jones in Multinationals and Global Capitalism: From the Nineteenth to the Twenty-first Century (2005) will be consulted in order to orientate the study empirically. Detailed studies of niche areas such as De Burca et al’s work on SME strategy (2004), and Phan et al (2008) on entrepreneurship in emerging economies will also be important. It will also acknowledge anti-globalisation theorists such as Lynn, through the arguments he presented in his End of the Line, the Rise and Coming Fall of the Global Corporation, (2005).

Conducted on a qualitative basis, this will be an inductive rather than deductive study, since it cannot realistically proceed on highly defined questions or areas of enquiry. Rather, its purpose is to make the initial foray into a new and under-research area which will inform a more deductive approach in the future. Consequently, the questioning will be exploratory rather than descriptive in nature, allowing participants the maximum scope to relay their reflections. As Rubin et al (2010) point out, when engaged in descriptive research, ‘…we try to identify or describe events or conditions…When doing explanatory research, we look for underlying causes and explanations of events. Exploratory research encompasses what is referred to as interpretative research, as a way of making sense of events.’ (198).

Strategy formation, whatever its focus, represents an important aspect of competitive practice in commercial markets. For this reason, there may be finite limits to the extent to which contemporary practice will be meaningfully discussed or shared for the purposes of an academic study. However, participants may be more likely to share worthwhile observations where past practice is concerned, or where they are no longer involved with the business or organisation in question. Participation will be sought from twenty individuals in relevant organisations, and the interviews will be conducted by e-communication as far as is possible due to the budgetary limit of ?1500 (excluding labour). The survey(s) themselves will be conducted within a two week period as far as is possible, to retain the cross-sectional format. It is anticipated that some of this budget will be absorbed by travel and associated expenses where online research is not possible.

ii. Sampling

The representative nature of any research depends to a significant degree on the sampling methods on which it was based. As McGivern points out, the most representative samples are those based on random or probability sampling, in which all elements of a particular population have an equal or proportionate chance of being included (2006, p.277). However, this approach has obvious implications in terms of both resources and outcomes. A genuinely random sample would involve a wide initial recruitment process and a lengthy period of filtering, during which the most relevant participants could be identified. This in itself would require significant resources and time, and would not necessarily produce the most suitable cohort for a specialist research project. The value of focused business research must be linked to the insights provided by the participants, and only those with the requisite experience and knowledge can provide this. Consequently, a non-probability or purposive sampling approach was deemed most appropriate, with practitioners from both past and present international businesses invited to participate.

The responses obtained will most likely involve insights from past as well as present strategy, so that the study may be said to have a wide chronological focus. However, this study should be seen as a cross-sectional rather than a longitudinal one, since its resources do not permit a longer research process. It may be, however, that further study is possible later, is the research objectives and questions are refined. As Yin cautions, despite the care taken to ensure that a sample is representative of some larger group, the number in a qualitative study ‘….will likely be too small to warrant any statistical generalisation….’. However, the findings may be sufficiently replicated in similar situations, allowing them to be ‘…generalized to other similar situations.’ (2010, 226).

The questions will be ordered into three sections, i.e. a binary or closed question Yes/No section, a Likert-scale multiple choice section, and an ‘open’ section of discursive enquiries. Each section in the sequence will be developmental and complimentary, allowing the juxtaposition of positivist and phenomenological findings, as in Appendices One and Two.

iii. Data Analysis

As Wolcott (2001) has argued, ‘…good qualitative research ought to confound issues, revealing them in their complexity rather than reducing them to simple explanation.’ (p.36). Whilst it is not envisaged that this limited research will uncover any conceptually original points, it is planned that a balance of positivist and phenomenological data will reveal contextual clues in the contemporary environment which may contribute to further investigation. This will be pursued according to the schema of analysis set out in Appendices One and Two.

5. Ethical Considerations

There are two levels of ethical responsibility involved in this proposal, i.e. that owed to the respondents, and that inherent in the conduct and evaluation of the work itself.
This research will be conducted on the basis that the participants themselves should have the maximum control over the conduct and outcome of the research process. This implies that they should be informed, prior to participation, of the possible uses and availability of the published research results (Tracy and Millar 2009, p.102).

This proposal also acknowledges the ethical responsibilities which arise from the interpretation of the research results themselves. As Gill et al point out, the researcher, ‘…through developing his/her research design, is usually trying to test hypotheses generated from a theory, through data collection, in order to see whether or not the theory survives those attempts at falsifying or disproving it.’ (2010, p.72) As an inductive study, this research will not be aiming to prove or disprove a particular idea. It will, however, rely for its value upon the originality or otherwise of the information uncovered. Responsible assessment of this should avoid inflating its significance or originality when drawing up the conclusions; where similar findings have appeared earlier or elsewhere, this will be drawn to the attention of the reader. The research findings should be closely linked to the evidence which supports them, and where some of this does not support the argument, this should also be acknowledged (Gray 2009, p.192).

6. Conclusion

Overall, the background issue may be said to fall into two areas; firstly, what kinds of expertise are necessary to assure the development of successful international strategy, and secondly, how may this be effectively researched? As Gravetter and Forzano have cautioned, it is all but impossible for a single research study to eliminate all threats to validity, therefore, ‘…each researcher must decide which threats are most important for the specific study.’ (2011, p.171). The single greatest problem in this research is the choice between a study which looks at the issue as it occurs across all sectors, or one which concentrates on a single business sector. As will be discussed further, this dilemma also has to be solved in a manner which takes account of the resources available for the work itself. As Patton advises, ‘…deductive hypothesis testing or outcome measurement aimed at confirming and/or generalizing exploratory findings, then back again to inductive analysis to look for rival hypotheses and unanticipated or unmeasured factors.’ (2002, p.57).

References

Berger, S., (2006), How We Compete, What Companies around the World are doing to make it in today’s global economy, Doubleday, New York.

Czinkota, M., Ronkainen, I., and Moffett, M. (2009), Fundamentals of International Business, Wessex, NY.

De Burca, S., Fletcher, R., and Brown, L., (2004), International Marketing: An SME perspective, FT Prentice Hall, Harlow.

Doole, I., and Lowe, R., (2008), International marketing strategy; analysis, development and implementation, 5th Edn., Cengage, London.

Felsted, A., ‘New Tesco chief faces world of tough challenges’, Financial Times, 25th February 2011, [online], (last updated 25.2.11), available at http://www.ft.com/cms/s/0/4024ff4a-4115-11e0-bf62-00144feabdc0.html#axzz1HyxsG9Nc [Accessed 17th March 2012].

Felsted, A., and Jopson, B., ‘Bridging the pond is a stern test for retailers’, Financial Times, 5th September 2011, [online], (last updated 5.9.11), available at http://www.ft.com/cms/s/0/fae9dba2-cf45-11e0-b6d4-00144feabdc0.html#axzz1pZpjylMt [Accessed 17th March 2012].

Gill, J., Johnson, P., and Clark, M., (2010), Research methods for managers, 4th Edition, Sage, London.

Gravetter, F. J., and Forzano, L. B., (2011), Research methods for the behavioural sciences, Wadsworth, Bellment CA.

Gray, D. E., (2009), Doing research in the real world, Sage, London.

Guler, I., and Guillen, M. F., ‘Knowledge Institutions and Foreign Entry: the internationalisation of U.S. venture capital firms’, [online], available at http://www-management.wharton.upenn.edu/guillen/NewFolder/IntVC18.pdf, [Accessed 17th March 2012].

Jansson, H., (2007), International business strategy in emerging country markets: the institutional market approach, Edward Elgar. Cheltenham.

Jones, G., (2005), Multinationals and Global Capitalism: From the Nineteenth to the Twenty-first Century, Oxford University Press, Oxford.

Jupp, V., (2006), The Sage dictionary of social research methods, Sage, London.

Li, J., (1995), ‘Foreign entry and survival: effects of strategic choices on performance in international markets’, Strategic Management Journal, Vol.16, pp.333-351.

Longnecker, J. L., (2009), Small business management,: launching and managing new ventures, Cengage, US.

Lynn, B.C., (2005), End of the Line, the Rise and Coming Fall of the Global Corporation, Doubleday, New York.

McGivern, Y., (2006), The Practice of Market and Social Research, An Introduction, 2nd Edition, FT Prentice Hall, Harlow.

Marshall, C., and Rossman, G. B., (2011), Designing qualitative research, Sage, Thousand Oaks, CA.

Muhlbacher, H., Leihs, H., Dahringer, L., (2006), International marketing: a global perspective, 3rd Edition, Thomson, Cengage, London.

Patton, M. Q., (2002), Qualitative research methods, Sage, Thousand Oaks, CA.

Patzer, G. M., (1995), Using secondary data in marketing research; United States and Worldwide, Quorum, Westport.

Rubin, R. B., and Rubin, A. M., Haridakis, P. M., and Piele, L. M., (2010), Communication research: strategies and sources, Cengage/Wadsworth, Boston.

Stevens, R. E., Wrenn, B., Sherwood, P. K., and Rudd, M. E., (2006), The marketing research guide, Haworth, New York.

Tracey, A., and Millar, R., ‘The interview approach’, in Hargie, O., and Tourish, D., (eds), (2009), Auditing Organisational Communication; A Handbook of Research Theory and Practice, Routledge, New York, pp.78-102.

Winkler, A. C., Metherell, J. R., (2011), Writing the research paper: a handbook, Cengage, New York.

Wolcott, H. F., (2001), Writing up qualitative research, Sage, Thousand Oaks, London.

Yin, R. K., (2010), Qualitative research from start to finish, Guildford Press, New York.

Appendix One: Questioning Sequence.

Section One: Binary/Closed Question.

It is possible to identify a ‘best practice’ model of international business strategy formation, which is transferable between business sectors. Yes/No/Neutral.

Section Two: Likert Scale Question.

It is possible to identify a ‘best practice’ model of international business strategy formation, which is transferable between business sectors. Strongly Agree/Agree/Neutral/

Section Three: ‘Open’ Question.

How would you identify a generic ‘best practice’ model of international business strategy formation, i.e. one which is transferable between business sectors? Please explain in your own words.

Appendix Two: Data Integration in sequence.
Appendix Three: Foreign Capital Investments by U.S. Firms by Host Country, 1991-2002.
CountryNumber of Ventures

United Kingdom

183

Canada

135

Israel

109

Japan

91

France

55

Germany

54

China

43

India

35

Ireland

31

Netherlands

30

Singapore

25

Source: Guler, I., and Guillen, M. F., ‘Knowledge Institutions and Foreign Entry: the internationalisation of U.S. venture capital firms’, [online], available at http://www-management.wharton.upenn.edu/guillen/NewFolder/IntVC18.pdf , [Accessed 17th March 2012]., p.46.