Analyze that potential international market by considering the 4 aspects of the Diamond of National Advantage: industry rivalry, demand conditions, related and supporting industries, and factor endowments.
Analyze the forces (in the home market and international market) that will help the organization succeed with its expansion and the forces that may act as barriers to that expansion. Refer to your analysis of strengths and weaknesses completed in Wk 1, the Porter’s Five Forces worksheet from Wk 3, and your analysis of the Diamond of National Advantage.
Evaluate the 4 adjustments leaders must make when expanding internationally (Burkus, 2012). Recommend 1 specific leadership action for each adjustment, such as developing a global mindset, developing sensitivity to cultural differences, decentralizing, deciding on the level of involvement, etc.
Recommend whether the organization should expand into the chosen country. Explain your rationale.
Create a Microsoft® PowerPoint® presentation to present your analysis and recommendation. Include the following sections in your presentation:
A cover slide
An agenda
Identification of the country you have chosen (1 slide, with brief speaker’s notes)
1 slide for analysis of each of the elements of the Diamond of National Advantage (4 slides, with speaker’s notes)
A summary of analysis of the forces that will help the organization succeed in the new country (1 slide, with speaker’s notes)
A summary of analysis of the forces that will hinder the organization’s success in the new country (1 slide, with speaker’s notes)
Leadership actions required to make the 4 adjustments identified by Burkus (2012)
A recommendation and rationale (1 slide, with speaker’s notes)
A conclusion
References
Exam Content
Choose 1 country that the organization you’ve been working on in this course could consider expanding into.
Read the selected article from the University Library.
Analyze that potential international market by considering the 4 aspects of the Diamond of National Advantage: industry rivalry, demand conditions, related and supporting industries, and factor endowments.
Analyze the forces (in the home market and international market) that will help the organization succeed with its expansion and the forces that may act as barriers to that expansion. Refer to your analysis of strengths and weaknesses completed in Wk 1, the Porter’s Five Forces worksheet from Wk 3, and your analysis of the Diamond of National Advantage.
Evaluate the 4 adjustments leaders must make when expanding internationally (Burkus, 2012). Recommend 1 specific leadership action for each adjustment, such as developing a global mindset, developing sensitivity to cultural differences, decentralizing, deciding on the level of involvement, etc.
Recommend whether the organization should expand into the chosen country. Explain your rationale.
Create a Microsoft® PowerPoint® presentation to present your analysis and recommendation. Include the following sections in your presentation:
A cover slide
An agenda
Identification of the country you have chosen (1 slide, with brief speaker’s notes)
1 slide for analysis of each of the elements of the Diamond of National Advantage (4 slides, with speaker’s notes)
A summary of analysis of the forces that will help the organization succeed in the new country (1 slide, with speaker’s notes)
A summary of analysis of the forces that will hinder the organization’s success in the new country (1 slide, with speaker’s notes)
Leadership actions required to make the 4 adjustments identified by Burkus (2012)
A recommendation and rationale (1 slide, with speaker’s notes)
A conclusion
References
Part 1
Essay: Developing Global Leadership:
A review of barriers and adjustments for international expansion
David Burkus
Oral Roberts University, City and Country, USA
Global expansion brings with it many new challenges and opportunities for any organization. This article
outlines four barriers to global expansion (language, regulation, culture, and competition) and provides
leaders with organizational adjustments: organizations must develop executives with a global mindset and
cultural sensitivity; leaders must decide on the level of involvement and decentralize their structure to
empower local managers. These adjustments will better prepare an organization for going global.
It’s inevitable. Just as a growing hermit crab will eventually look for a new shell to grow into, as
organizations grow, many leaders will eventually look to other countries or continents to expand into.
However, often the method that brought success at home is not the same route that will ensure success
abroad. Fortunately, there’s help for leaders looking to help their organizations go global. This article will
outline common barriers to global expansion and suggest organizational adjustments leaders will need to
make. Leaders will need to develop an understanding of these barriers and adjustments in order to know
what to expect when they’re expanding.
Organizations expanding into new countries will likely find that “business as usual” will not operate
well in the new culture (McCall & Hollenbeck, 2002). The cultural differences among locals will create
several barriers that must be overcome for a successful expansion:
Language. McCall & Hollenbeck’s (2002) research on global executives found that learning the
language was often the largest barrier to working across cultures. Though English is the unofficial
language of international business, critical information can be lost in translation. Similarly,
negotiators who do not speak the local language can find themselves at a disadvantage.
Regulation. Differences in labor and consumer regulations can make doing business more difficult
in foreign countries (Black, Morrison, & Gregersen, 1999). For instance, emission regulations for
computer models are stricter in Europe than the United States; as a result, product lines may have to
be customized. Awareness of regulatory standards is vital in order to remain competitive with local
firms.
Culture. The cultural norms of interaction affect the way business transactions are made, even if all
parties interact in the same language. In the United States, many executives focus on doing business
first and letting personal relationships build as the business relationship does (Black, Morrison, &
Gregersen, 1999). In many cultures, this order is reversed. Knowledge of this and other cultural
differences can make interactions with local executives significantly less complicated.
Competitors. As companies enter new markets, they inevitably meet local competitors. These
competitors have knowledge of local markets that foreign companies may not. For example,
McDonald’s spent 13 months trying to sell beef hamburgers in India before an understanding of local
beliefs convinced them to use lamb (Rosen, Digh, Singer & Philips, 2000). Partnering with local
competitors or conducting extensive competitive analysis is vital for gaining this market knowledge.
These four barriers are not exhaustive, just common. When crossing cultures, organizational leaders
can expect to encounter barriers similar to the ones listed above and, in some cases, drastically
different ones.
Whatever barriers these leaders face, their first step is to prepare. Organizations increase their
chances of successful expansion by adjusting the way they operate. Several adjustments may need to be
made to prepare an executive or organization for going global:
Develop a global mindset. Executives preparing for expansion must develop a mindset that is open
and aware of cultural diversity yet can synthesize across this diversity (Gupta & Givindarajan, 2002).
Organizational leaders must be able to synthesize their companies global strategy with the needs of
the local organization and local market.
International Management Review Vol. 8 No. 2 2012
84
Develop sensitivity to cultural differences. Understanding how business is done within the local
culture is vital to getting business done. The ability to perceive and leverage the differences between
familiar and foreign cultures is called cultural literacy and is an important tool for competitive
advantage (Rosen, Digh, Singer, & Philips, 2000).
Decentralize. The executives with the best understanding of local cultures are the ones who are
native to that culture. Organizations may have to change their philosophy of management in order to
empower these executives to make decisions on the local level for the good of the global
organization (Rosen, Digh, Singer, & Philips, 2000).
Decide on the level of involvement. Before making any entry into a foreign market, organizational
leaders must first decide how involved they anticipate being. Galbraith (2000) outlines five levels of
entry companies can make into new markets: exportation, joint venture, foreign operation,
multidimensional network, and transnational operation. Exactly what level of involvement is desired
must be accounted for in a strategic plan.
These adjustments must be made during the process of preparing the organization and the selected
executives for expansion into the new culture. Global expansion brings with it many new challenges and
opportunities for any organization. Organizational leaders will likely encounter many barriers to entering
the new culture, including language, regulation, cultural differences, and new competitors. In order to
prepare for these new hurdles, leaders can prepare by making several adjustments to themselves and their
organization. Organizations should develop executives with a global mindset and cultural sensitivity.
Leaders need to decide on the level of involvement and decentralize their structure to empower local
managers. Regardless of how these adjustments are made, organizations will find they must be in order to
break from business as usual and successfully go global.
References
Black, J. S., Morrison, A., & Gregersen, H. (1999). Global explorers: The next generation of
leaders. New York: Routledge.
Galbraith, J. R. (2000). Designing the global corporation. San Francisco: Jossey –Bass.
Gupta, A.K., & Govindarajan, V. (2002). Cultivating a global mindset. Academy of Management
Executive, 16(1), 116-126.
McCall, M., & Hollenbeck, G. (2002). Developing global executives: The lessons of
international experience. Boston: Harvard Business School Press.
Rosen, R., Digh, P., Singer, M., & Philips, C. (2000). Global literacies: Lessons on business leadership
and national cultures. New York: Simon and Schuster.
