Mahindra and Mahindra (B): An Emerging Global Giant
Unique Strategies for Emerging-Market Companies
The strategies that are commonly applied by emerging market companies include low cost partner strategy, low-optimizer strategy, global consolidator strategy, merger and acquisition strategy and global first mover strategy. In the strategy of low optimizer, companies place more emphasis on processes and products that suit emerging markets through development of niches in developed nations. The strategy also involves focusing on products not common to countries with diverse characteristics like income levels and tastes. In the strategy of low-cost partner, emerging market companies enter partnerships with companies where their process have been optimized already. Therefore, they are not required to carry out an upgrade of any system.
Emerging market companies are known to use the strategy of global consolidator to standardize operations across different countries. After consolidating domestic markets, emerging market companies use the strategy in order to consolidate at global level. Emerging market companies apply the strategy of global first mover as it makes it possible for them to attain efficiencies of scale, solid financial support and great knowledge base. In addition, these companies will also use the strategy of Merger and Acquisition as it offers them an opportunity to growth and also makes it possible for the company to acquire tangible and intangible assets.
Strategies for M&M in the United States Market
In order to market SUV in the United States, M&M had to follow the low optimizer strategy which focuses on products consumers demand. The company is supposed to curve a niche for itself. In a market that is developed like the U.S consumers are interested in environmental safety and fuel efficiency aspects of vehicles. In order for the company to move into the U.S market, the products are supposed to be fuel efficient. What is more, the company also needs to place emphasis on customer centric approach and innovation as the means of conducting business activities. Companies that are in emerging markets do not need to focus on innovation as they are more interested in a cost-related advantage.
Alternatives for M&M Brand in the Global Market
For M&M to build its brand in the global scope, it ventured into partnerships that were strategic with other international automakers. Additionally, the company is also supposed to adopt the strategy of acquisition in order to pursue globalization. This will make it possible for the company to effectively manage cross border acquisitions and integrate some new distribution networks and supply chains. What is more, M&M can also source talent on a global scope since it guarantees quality personnel presence in all locations of operation. For M&M brand to become a success, a company needs to make sure that between all the companies, there is harmony. M&M also needs to experiment on domestic market and bring requisite improvisations about. This will make it possible for the company to meet the expectations of customers overseas and it will also aid in building the brand at a level that is global.
Cultural Profile and Historical Background
Mahindra and Mahindra Limited, an automobile Manufacturing Corporation from India has its headquarters in Mumbai, India. It was founded in 1945. The founders were Mahindra brothers; J.C Mahindra and K.C Mahindra and Ghulum Mohammad. It began as a steel trading company. In 1947, it ventured into the automobile manufacturing business. To meet customer needs, the company made the decision to diversify into varying business ventures.
From the beginning, the company nurtured ambition of being a global player in the auto industry. Once it established itself in the utility vehicle domestic market, M&M expanded to the global scene. Currently, it operates in eighteen key industries that comprise up the foundation of every modern economy. These include aerospace, aftermarket, farm equipment, agribusiness, logistics, construction equipment, consulting services, automobile, information technology, energy, real estate, hospitality, finance, two wheelers, insurance and industrial equipment. The company also embraces merged structure which makes it possible for business entities to chart their future. It also makes it possible for the company to leverage synergies in the group competencies. The diversity of expertise by the company is what attracts customers in different fields.
Businesses are dependent on communication as they move into emerging markets. One of the greatest challenge emerging companies’ face as they venture into the U.S market is the time zones difference. The time zone difference between the U.S and India is so great. This means if the employee is living in the U.S and requests for information from India, they can receive the response anticipated past the expected time due to time difference. What is more, there is also the aspect of language barrier which can lead to miscommunication and which jeopardizes trust, team identity and cohesion. These aspects can be changed. Additionally, it is easy for the time zones to get misinterpreted.
Staffing Policies and HR Challenges
Staffing policies are concerned with employees’ recruitment for specific jobs. It involves the selection of individuals with specific skills in completing certain jobs. It also acts as the tool for development of corporate culture. Staffing policies are dependent on expatriate managers. In cases of international businesses, there are 3 forms of staffing policies which include ethnocentric approach, geocentric approach and polycentric approach. In ethnocentric approach, the major positions of management are filled by parent company. Firms will pursue this policy when they feel the host country lacks individuals who are qualified to fill the senior positions. Additionally, there are firms that feel the policy is ideal for maintenance of a corporate culture that is more integrated. Additionally, ethnocentric policy is of great use for firms that work to create value via transfer of core competencies. Nevertheless, ethnocentric policy limits opportunities for growth for host countries. This leads to resentment, high turnover and low productivity. Ethnocentric policy can also lead to myopia where the host countries do not understand the host country culture. Expatriate managers might take a long duration to adapt and several mistakes can be made as well in between (Paik & Ando 2011).
Polycentric staffing policy also makes it possible for host countries to recruit managers for subsidiaries. Under the policy, firms never experience cultural myopia. What is more, the local managers cannot afford to make mistakes that might arise from cultural misunderstanding. However, polycentric approach limits opportunities for the host countries to acquire experience from outside their home country. Lack of management transfers limit integration between corporate headquarters and foreign subsidiaries. Geocentric staffing policy also employs best performing employees in an organization to positions of senior management despite their nationality. This policy has faced numerous challenges like high costs of implementation and training. Furthermore, there is also high cases of resentment as some managers enjoy higher pay (Collings, Scullion & Dowling, 2009).
Culture are very different. This is dependent on location. Human resource poses numerous challenges if they are not conversant with the cultural differences since they are not able to adjust to hiring procedures and management in the manner they are supposed to. HR managers face numerous staffing issues. At times, striking a balance between laws of their own country and the host is a major issue for managers. Language barrier also influences HR manager decisions (Morris, et al., 2009).
Leadership and Motivation
Every organization needs leaders since the business environment has become increasingly turbulent and sensitive to impulsive technological change and competition. Leaders should encourage employees to be more creative so as to allow the company survive global competition forces. Leaders in any organization are also in a suitable position to influence employee motivation. When employees feel highly motivated, they are more likely to offer their best for purposes of the organization (Zhang & Bartol, 2010, p. 107).
Issues of Concern
Issues of concern for international corporations are known to affect both the host and home country. The home country suffers loss of jobs. Additionally, it also losses revenues as a result of taxation. In host country, there are many issues as well. The corporations can interfere with business activities of host country. What is more, it erodes traditions and cultures since the people are globalized. In a couple of cases, the profits made by the corporations are often returned to home country. The host country therefore is left poor. International companies can fail to retain or attract staff which jeopardizes the company’s activities.
Organizational Structure and Changes Necessary to Facilitate Expansion
To expand globally, an organization requires global teams, expanded coordinating roles as well as headquarters training. Global teams come with integration benefits by standardizing designs and operations in various countries. What is more, they contribute to continued organizational learning, knowledge transfers and adaptation at a global level. Headquarters planning plays the active role of planning and scheduling in order to ensure global organizations work together and move in same direction. Expanded coordination roles aid in implementation of structural solutions and helps to obtain stronger coordination and collaboration (Collings et al. 2010, p. 580)
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