Examine the countries where your company does business according to where they r

Question

Examine the countries where your company does business according to where they rank on the Hofstede cultural dimensions. Think of some examples of how a U.S. manager would need to modify his or her behavior when communicating with associates from one or more of these foreign countries. 2.Does your company operate in any countries that are considered very politically or economically risky? 3.Does your company primarily operate in civil law or common law countries? What are some of the implications of this? 4.Has your company purchased any insurance from the U.S. Overseas Private Investment Corporation (OPIC)? 5.What are some key intellectual property protections, if any, that your company possesses? When do these protections (e.g., patents) expire? How does your company intend to recoup lost revenues due to any patent or other intellectual property protection expirations? 6.Find the Corruption Perceptions Index (CPI) score for two countries where your selected company does business, one country with a relatively high score and one country with a relatively low score. Search for news stories about corporate financial scandals in these two countries. Prepare a short summary of news stories about financial scandals in these countries. Briefly describe what you perceive are the risks of corruption, such as paying bribes, that your selected company might face in these countries. 7.Determine your company’s mode of entry into foreign markets. This should be based upon a serious analysis of your company’s risk-return tradeoff. In your opinion, has your company taken the right approach? 8.Does your company have an exit strategy? Recall that exit strategies are to be determined before entry into the foreign market, rather than after entry. 9.Critically and objectively evaluate how ethical your company’s global operations are and determine if they are good corporate citizens (i.e., do they have a well thought-out corporate social responsibility program for the long term?). 10.What is the corporate mission statement of your target company, assuming it has one? How well do the company’s actions adhere to its stated mission? 11.With respect to its strategy formulation, would you categorize your company as a shareholder model or a stakeholder orientation? Why? 12.Is the company a stateless corporation? If not, is the company on its way to becoming a stateless corporation? 13.What type of organizational structure is the company currently using? 14.Do you think the company may benefit from a hybrid or matrix structure? Why or why not?

Explanation / Answer

Starbucks is an American coffee company and coffeehouse chain based in Washington. It’s the largest coffeehouse company in the world. It distinguishes itself from others by its taste, quality, customer experience and its popular darkly roasted coffee. Hofstede's cultural dimension theory describes the effects of a society culture on the value of its members and how they relate to behavior from a factor analysis point of view. In light of this statement, Starbucks operates in 66 countries and territories. This being so much of a number, a manager in U.S which serves it’s headquarter should verse equipped with the knowledge of the different cultures of these countries. This will be beneficial in making a decision on the success of the chain. Different members will require different approaches to solving their issue.

With the saturation of the U.S markets, they couldn’t be dependent for growth anymore. Therefore, Starbucks decided to enter international markets. Before entering, they focused on the market conditions for its products in the country. A few test stores were opened in trendy places. This helped not fall prey of entering in countries considered very politically or economically risky. Though in some scenario the situation changed when the Starbucks were established. Thus, formulation of ways to cope up with the situation as well as closing down as was the case with Israel.

Civil law countries have a legal system have principles codified into a referable system that acts as a primary source of law. On the other hand common law countries, principles are from a judge through a court system. This has different implications for dealing with the cases they face. In common law, the cases are settled in a court system whereas, in civil law, the issue may be solved arbitrarily where there is a consensus at the end of it all.

Insurance is a tool that reduces the cost of loss caused by various risks. Starbuck is well informed about the various advantages associated with insurance. Insurance provides safety against the loss on a particular event. Insurance also reduces business risk, and loss, as such managers are at peace with a promise of compensation in case, loses arise. Also, insurance accelerates the economic growth of the country since there is protection against loss of property and capital to produce more wealth. With this in mind as well as the many risk Starbucks are exposed to, their managers have resulted to purchasing an insurance plan from the U.S Overseas Private Investment Corporation.

With the success they enjoy Starbucks have a lot of competitors who are ready to do anything to ensure their downfall and after that takeover. Starbucks has been a target of imitation of their logo. To have control, Starbucks has patent their logo and has used legal action against those perceived to be infringing on its intellectual property. For example in 2000, Kieron Dwyer, the cartoonist, was sued for trademark and copyright infringement after he created an imitation of the logo and used it on the cover of his cosmetics. Starbuck has also devised another strategy where they have an anti-Starbucks website. This encourages people to deface the Starbucks logo. The patent policies expire after a given lifespan. Therefore, Starbucks have measures in place to timely renew the policy one’s they expire to avoid penalties.

The Corruption Perceptions Index ranks countries and territories based on how corrupt their public sector is perceived to be. In light of our question, we shall consider Mexico, which has a score of 35 out of the possible 100.The other will be U.S with a score of 74 out of the possible 100.The corporate financial analysis scandals in Mexico involved Walmart. It explains how the company tried to achieve the market dominance through the campaign of bribery. It also referred that$ the company exercised bribery to obtain the permission to build new stores throughout the everywhere of the country. In U.S, the focus is on Enron Bankruptcy. Much of its revenue was as a result of planned accounting fraud. This was through the creation of limited liability special purpose entities in which the company hid its liabilities. From the cases sighted it’s clear that the risk of corruption to the business discourages shareholders and investors due to fear of failure. It also results in a damaged business image and as if that isn’t enough it may result from inefficiency as large losses are experienced through embezzlement and graft.

In facts the modes of foreign market entry differ in the control and commitment of resources they require and the return on investment they guarantee as well as a degree of risk they present. There exist majorly two entry modes: Equity that is about joint ventures as well as wholly owned subsidiaries. On the other hand Non-equity, mode involves exports and contractual agreements. Starbucks uses equity model that has just worked wonders for them. They have been able to dominate most countries.

It’s always important to carry out a proper market survey before entry into any market environment. This is simply because it becomes more expensive when one opts out through unnecessary cost that should have been avoided. In light of Starbucks, they have the strategy of staying and making things work. This is a good strategy when there is a going concern. Though Starbucks should be rigid on it. If worse goes to worst, then they shouldn’t hesitate to exit as soon as possible before the consequences are dire.

In the recent past corporate social responsibility is a necessity to have a competitive advantage. On their part, Starbucks embrace these policies. They aim to work ethically with all of its suppliers, offering the providers of their produce fair value for their work. The company also practices environmental friendliness, choosing eco-friendly options whenever possible. This as in the use of recycled paper in its beverage cups. To ensure quality for its customers it partnered with conservation international to draft plans ad audit its coffee and farmer equity program.

Each and every business should have a mission. This is what the business wants to achieve shortly. It give the business the direction, and all the stakeholders are focused toward the same. The mission statement of Starbucks is “to inspire and nurture the human spirit one person, one cup and one neighborhood at a time. “This has played a big role in what they are today.

For any organization to enjoy its success, it must have a strategy. This is a broad plan to take the organization from its current place to its dream place. Strategy formulation that is the process helps an organization reach its maximum level of effectiveness. In this case, Starbuck is seen to be stakeholder oriented. Concentration is on the satisfaction of all those on board. It’s not about shareholders wealth maximization. This strategy has enabled Starbuck in a big deal to be where it is.

With the idea that stateless corporation is national firms with international operations than it would be appropriate to classify Starbucks as such. As if not enough with the already widespread operations, Starbuck is determined to expand its territory further.

It’s the organizational structure that influences, leadership, and management, communication as well as change. Starbucks has a unique organization structure that meets the business need and grows with it. It has enabled the company to optimize processes as well as the quality of its services and products. It has a matrix organizational structure. It has been very crucial since it focuses on the customer. And as such, enable it to provide effective and efficient services to them.

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