Mock Publishing Proposal for Intercultural Analysis

7/28/2019 Mock Publishing Proposal for Intercultural Analysis

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Running head: FINAL PROJECT 1

Final Project: International Expansion Proposal

Winston Crutchfield

Indiana Wesleyan University

ADM549 Intercultural and Global IssuesGBO1304DWS6

Facilitator: Bonnie J. Straight, Ph.D

May 13, 2013


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Abstract

Acme Publishing group has decided to expand into the international market by locating a

subsidiary publishing house in Australia. The cultural similarity, presence of an existing market,

and access to local markets will allow Acme to establish an immediately competitive business

using local resources. The Australian market encourages foreign direct investment and allows

Acme to localize operations while still maintaining a high level of control that will enable the

company to maintain a consistent brand identity and product quality. The similarity of the

Australian culture to the home culture will ease the transition of expatriate managers. Expatriate

managers will be selected with a strong preference for managers who are actively interested in

the assignment and test well for overseas adaptability. Existing competitors in this market space

are using similar strategic operations, and the opportunity exists for Acme to enter this market as

a leader. The interest of the Australian government in bring foreign direct investment to their

shores and the intention of Acme to use predominantly local resources means that Acme will

enjoy the protection and resources of the local government while interacting with local

businesses and Near East export opportunities.


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FINAL PROJECT 3

Final Project: International Expansion Proposal

Market analysis and decision to expand

Acme Consolidated Book Publishing Group has experienced steady growth in the

domestic market over the previous ten years. Each of our publishing imprints has shown

consistent sales and garnered a measurable market share; our strongest imprint is the BlowedUp

line of action-adventure novels, followed by our Angst young adult line, and the Fair Maiden

fantasy romance line. Our sales volume and the size of our staff allow us to compete in the

middle market, comparable to the market share enjoyed by Harlequin, Baen, and Hyperion in the

same market space. Our core competency lies in growing a dedicated customer base through

consistent development of author recognition and IP participation.

The decision to expand into Australia with a local printing and distribution hub has

grown out of the volume of ebook sales to that country, and the escalation of interest in physical

copies of our products. Australian publishing trends in recent years have shown a preference for

genre fiction characterized by an increase of 10 to 20 percent during the 1990s and 2000s (Bode,

2010). The purpose of the expansion is to provide a local printing and distribution hub that can

supply physical copies of our products to local retailers at a lower cost than importing products

printed elsewhere. Local production will enable us to distribute to the Australian mass market

and reach a larger consumer base. We have chosen to expand into Australian markets based on

the consumption of our ebook titles in that demographic, and based on the reduction of activity

in that country by large publishers such as Random House and HarperCollins (Matthews, 2005).

Environmental factors

The Australian Trade Commission describes the country as a safe destination for

investment. The country's political and regulatory environment is stable, open and progressive,


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providing investors with a high degree of confidence and certainty (Democratic and Politically

Stable, 2013,p. 1). The legal system and technological infrastructure of Australia resembles

the common law structure of other developed Western nations (Democratic and Politically

Stable, 2013). The economic structure of Australia has been ranked second only to the United

States, promotes strong growth opportunities, and possesses a banking system that has not

required direct financial support (Strong Economic Credentials, 2013).

Cultural norms in Australia are similar to other developed Western cultures. Acme will

conduct business overseas using the same value system we have developed for our domestic

office, with sensitivity to changes in cultural preferences. Acme values communication that is

timely and clearly understood, transparency of business practices, production of high-quality

content, and a commitment to support the fiction series within our imprints. Consumer reaction

to our core values has been largely positive, and continues to drive demand for our products.

The work of Arjoon & Rambocas (2011) suggests that positive consumer reaction to our

reliable and interactive online presence will translate into a perception of ethical reliability and

trust. This perception should ease transition into the local market and provide us with a solid

foundation for local marketing. Singh, Iglesias, & Batista-Foguet (2012) draw a positive

correlation between perceived ethicality, consumer trust, and brand success. With the success of

Acme as a publishing house tied closely to the success of our branded imprints, a successful

transition into the Australian market will likely depend heavily on our ability to maintain our

current level of customer trust.

Cultural profile

Australians enjoy a structure society with many rules governing business conduct and

formal rules dealing with unpredictable situations (Singh, Svensson, Wood, & Callaghan, 2011).

Comment [bjs1]: When you use the place of the author, you need to put the ti

fragment of the title in quotation marks incitation - Also, you dont need to put the

in the citation, just the first few words, en

unique

Comment [bjs2]: When you have a

quote, you need either a page number o

number in the citation


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FINAL PROJECT 5

Australians are a highly individualistic society with low tolerance for power distance and

autocratic governance (Singh et al., 2011). Australias masculinity index is relatively high

compared to other countries that share its ethnic origins and language, suggesting prescriptive

codes of ethics and formal rules dominate the business environments (Singh et al., 2011). This

culture is similar to other business cultures in developed Western nations, and should ease

potential conflicts associated with establishing a printing and distribution hub.

Worker profile

Like many other developed countries, Australia relies on a highly diverse, relatively low-

skilled workforce for most of its manufacturing and labor-intensive occupations (Scott-Ladd,

Travaglione, Perryer, & Pick, 2010). This has led to increased social diversity and workforce

migration resulting in language problems, communication barriers, lack of community support,

and a potential increase in workforce discrimination (Scott-Ladd et al., 2010). Australias core

workforce of skilled and educated labor is supplemented and supported by a casual and transient

workforce that makes up fully 27% of its labor market (Scott-Ladd et al., 2010). Cultural conflict

and stress associated with the work place account for a large number of job complaints by the

workforce, and creates an environment with low worker confidence and job security (Scott-Ladd

et al., 2010).

Foreign development initiatives

Australian attitudes to foreign direct investment have undergone a paradigm shift in

recent years, as Australian corporations seek out Asian and European funds for use in-country

instead of focusing on growing the local economy as a source of generating Gross Domestic

Product (Australia FDI, 2012). Firms within the Australian market tend to focus on supplying

local demand rather than exporting to the Asian market, and have little experience with foreign

Comment [bjs3]: After the first citatiauthors listed, you can use et al. for the

(Singh et al., 2011)

Comment [bjs4]: (Scott-Ladd et al., 2


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markets (Massingham, 2013). The government is attempting to attract more foreign investment

and manage local anxiety over foreign capital replacing domestic capital (Australia FDI,

2012). The government desires to present a legally stable environment with a competitive

structure, but local resistance to market evolution is sending mixed signals (Australia FDI,

2012).

Cultural summary and communication barriers

Australian culture shares much in common with other developed Western nations, and

particularly to the English-speaking countries. Both the U.S. and Australia value individualism

and communicate within a low-context environment where explicit information exchange is seen

as normal and desirable. Both developed nations share similar workforce structures composed of

a low-skilled workforce that tends toward career migration. One critical difference is the influx

into Australia of a migratory workforce from a predominantly Asian background. Managers

transitioning into the international Australian market will need to be flexible in their human

resources management with a high tolerance for cultural ambiguity.

Many critical workforce values are common between the Australian and U.S. markets,

and managers transitioning to the new production and distribution facility will find common

ground regarding attitudes toward individual achievement and power structures. One critical

difference is the greater emphasis that Australians place on rules of conduct regarding business

practices and the low tolerance for autocratic governance.

Decision to go international

The decision to expand into the international market in Australia started as a reaction to

customer demand for our product. The Australian market for printed fiction is not restrictive, and

companies face no market pressure to localize production of printed material, but may achieve

Comment [bjs5]: Fine conclusion!


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economies of scale and significant shipping savings by localizing production. The major

influence in the decision to globalize is a proactive attempt to realize cost savings through

utilization of local resources. The production of printed publications uses no proprietary

technology and requires no specialized resources. With local production facilities servicing the

Australian market and the English-speaking near-East market such as Shanghai, Taiwan, and

Singapore, an overseas production facility presents significant growth opportunities in an export-

only strategy.

Global objectives

In developing an international production facility and developing the companys imprints

in the overseas market, Acme desires to grow a loyal customer base within the international

market and set precedent for the protection of our intellectual properties within the international

legal environment. Growing a loyal customer base in the Asian and near-Asian markets such as

Australia means building a degree of trust between the company and the market. A customer-

centric approach manages this relationship by focusing on the benefit to the customer, along with

shared values (Chang & Lewis, 2009). Over time, this relationship fosters an increasing degree

of customer loyalty which serves as the basis for mutually beneficial transactions that contribute

to a successful business (Chang & Lewis, 2009).

Developing countries harbor an enormous creative potential for translating intellectual

properties into other cultures, attaining a high rate of success while preserving the essential

elements of the property (Pager, 2013). Developed countries see a high degree of risk in

exporting their properties to developing nations, while the targeted nations chafe at restrictions

imposed by the country of origin, seeing them as nationalistic (Pager, 2013).


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FINAL PROJECT 8

To be sure, production of copyrighted content as a global commodity remains skewed in

favor of developed countries. Yet developing countries increasingly figure not just as

consumers of imported media (whether authorized or not) but also as producers and

exporters. The creative industries they harbor have become important drivers of

economic growth (Pager, 2013, p. 242).

Establishment of local production facilities not only provides the intellectual properties with

legal protection based in the local judicial system, but affords an authorized outlet for tapping

local creativity that can add value to the brand.

Environmental assessment

Scanning the projected business environment identifies global, regional, and national

factors that will affect the interests of the company (Deresky, 2011). Other companies in this

market space have already performed intensive analysis of the business environment, and Acme

can reduce its own risk by taking the role of follower and limiting our own investigation

(Deresky, 2011). The Australian government is a stable political environment with a growing

economy that is attracting foreign investors (Democratic, 2013). The publishing industry is an

unlikely target for nationalization of either facilities or technology, as it is not a vital industry.

The current market focuses on small publication runs consisting mainly of magazines and trade

publications; multinational players in this field are Houghton-Mifflin and MacMillan, who both

focus on academic publications in this market. Competition in the genre fiction market is limited

to a few publishing houses, all of which are currently using an export-only strategy to compete in

this market.

Entry strategy

Comment [bjs6]: With a block formayou do not use quotation marks

But you need the location of the quote


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Because Acme wishes to establish itself as a local player within the Australian market, it

has opted for an aggressive entry strategy requiring a large investment and affording a high

degree of control. Acquiring an existing publication facility will afford Acme easy access to

distribution networks and provide an immediate level of acceptability while allowing rapid

market entry with our established imprints (Deresky, 2011). The high control of management

afforded by establishing a fully owned subsidiary will allow Acme to ensure quality control,

intellectual property support, and to realize the largest profits from its investment (Dyhr-Ulrich,

Boyd, & Hollensen, 2012).

Establishing a subsidiary grants instant credibility to Acme and affords immediate access

to local markets utilizing local resources and labor. Having a local publishing house will give

Acme a competitive edge compared to other companies in this market space by affording access

to an extended exporting network. The high degree of control this strategy provides allows Acme

to establish consistent brand identity and improve the value and recognition of the label.

Organizational structure and reasoning

Acme Publishing is ready to move from a simple export model to establishing a local

production facility in Australia. The limited scope of this move means that the company will be

reorganizing into a domestic structure plus foreign subsidiary (Figure 1.0). This structure will

enable the parent company to retain control over the intellectual properties and ensure a

consistent level of quality in both development and production. Heading financial, production,

and human resources issues under a centralized vertical structure will enable the home office to

enact and enforce uniform policies in both the domestic and foreign offices, providing consumers

with uninterrupted service and no perceptible change in quality. The key deciding factor in favor

Comment [bjs7]: ?

Comment [bjs8]: Parallel structure:2 sets of parallel phrases:to ensure

quality of control and

intellectual property support, andto realize the

or 1 phrase and 3 parallel phrases:

to ensure

quality of control,

intellectual property support, andrealization of the

Comment [bjs9]: 666 words


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of this structure is the brand messaging power of a single marketing program executed

consistently in both foreign and domestic markets.

Control of global brand identity

Multiple foreign markets and global branding has traditionally been dealt with in a

decentralized manner that spread managerial decision making across their respective domestic

markets (Egelhoff, 1988). Egelhoff says, the increasing growth in global interdependency can

best be exploited by global strategies, where the appropriate unit of analysis for strategic

planning and management is the global market for a product instead of multiple domestic

markets (p. 2). In the past, this situation has been dealt with using a matrix structure, which was

expected to become a dominant multinational structural strategy, a trend which has failed to

emerge in favor of structures with a more dynamic ability to respond to environmental

fluctuation at the national level (Egelhoff, 1988).

Control of production

Herbert (1984) states that the decision to engage in international business hinges on

operational issues such as production, financing, and selling that have already been decided

within the organizational structure of the business. With the impact of foreign sales and product

diversity already having been accounted for by the design structure of the company, Acme will

be free to deal with the interorganizational differences and system boundaries that are the natural

result of doing business over great distances (Herbert, 1984). Using a subsidiary to deal with

local logistical issues allows the company to operate at the local level while bringing to bear the0

greater resources of the parent company to deal with additional foreign market opportunities and

challenges (Herbert, 1984).

Case study: Carrefour


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In the macro scale, Carrefour is a global retailer that has successfully penetrated the

Asian market by adapting its methodology to the local environment while presenting a strong

global brand identity (Chinomona and Sibanda, 2013). Carrefours case study is relevant to the

Acme expansion project because of the environmental similarity of circumstance except for the

difference in scale between the retailer and Acme. Entering the Asian market, Carrefour faced

intense competition from local retailers, government regulations that limited available business

opportunities, and an entry strategy that relied on an alliance with access to extensive distribution

networks (Chinomona and Sibanda 2013). Carrefour leveraged their existing economies of scale

and brand recognition against these challenges to create a profitable business venture.

Carrefours glocal strategy pertained to the idea of approaching each market differently,

understanding and responding to local needs, which include the needs of final and intermediate

customers, competitors and the macro environment (Chinomona and Sibanda, 2013, p. 52).

Determining need for international management

Acme is facing a limited need for international management to oversee operations in the

Australia facility. When the need for managers with international competencies is limited in

scope or volume, the position is best filled by personnel who have expressed an interest in

intercultural management and can be trained in the necessary technical skills (Harvey,

Novicevic, and Speier, 2000). Corporations with global operations embedded into their

organizational processes and overall strategy have a greater need for managers with intercultural

experience and competencies (Harvey et al.). Companies with a predominantly domestic focus to

their operations have a small domestic focus that is suited to ethnocentric human resource

management practices (Harvey et al.). Filling management positions with personnel that are

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actively engaged with host-country culture will provide country-specific contextual adaptations

along the necessary business paradigms (Harvey et al.).

Management selection process

Potential managers will be specifically evaluated with a variety of techniques designed to

test suitability for international management. Assessment prediction techniques have been shown

to be reliable as indicators of future success in international management when correctly applied

(Moses, 1973). The assessment process can be intensive and expensive, and limits the candidate

pool due to the logistical problems of applying the screening; a screening process is most suited

to small companies drawing from a limited pool of potential managers with a highly specialized

degree of required knowledge (Moses). Early application studies suggest that a limited screening

process provides a significant indicator of the effectiveness of further training procedures

pertaining to selection of international management (Moses).

Companies that use tests to determine the suitability for conducting business abroad are

undecided on the specific qualities that make up the key indicators for the test, but once key

indicators are chosen, candidates who score high do well with their international assignments

(Multinational, 1971). Some parameters for the testing include the candidates personality,

intelligence, aptitude, interest, and achievements (Multinational). Companies that have used

testing in the past give the results varying degrees of weight in determining candidate suitability,

and sometimes do not follow up with scientific validation of the results (Multinational).

Selection criteria for international management

Acme intends to use standardized testing procedures to evaluate suitability of candidates

for international management positions. We will test the ability of candidates to adapt to foreign

cultural norms, the technical ability and knowledge of the candidates, and the familiarity of the


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candidates with the policies and procedures of the company. Only candidates that show an

intense interest in operating as international managers will be considered for the position. The

expatriate compensation package will include a 15% increase in compensation benefits designed

to allow the manager to maintain a consistent standard of living with his peers and deal with the

additional expense of living and working overseas. The company will pay foreign income taxes

for the expatriate employee, and the employee will accrue benefits as if employed in the home

country. A standard allowance will be given to expatriates to pay for family expenses related to

relocating as if the expatriate were married with two children. The assignment will be for an

undetermined period of time until local management can be found and trained, and time served

overseas will be equated to time served at home for purposes of advancement and seniority.

The purpose of the compensation package is to ensure that expatriate employees have

access to the same level of resources as they have at home. It the companys position that time

served overseas will not only fill a necessary function but increase the employees skill set and

value to the company.

Conclusion

Acme has identified multiple overseas markets in which the company could be extremely

competitive or establish a leading market share. These markets require the investment of

additional capital and the establishing of an international market presence. The use of a

subsidiary has been identified as the most efficient and competitive means of market entry.

Australia has been selected as the host country because of its significant presence in our market

and the similarity of the culture. Expatriate employees will be used for the initial establishment

of the business in order to ensure consistency of product with the home company. Acme believes

these actions will lead to a viable presence in the overseas publishing market.

Comment [bjs11]: This discussion coexpanded further -- accounting for taxes

differential, family issues, time back in th


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References

Arjoon, S., & Rambocas, M. (2011). Ethics and customer loyalty: Some insights into online

retailing services.International JournalOof Business & Social Science, 2(14), 135-142.

Australia FDI regime must change for Asia success. (2012).International Financial Law

Review, 31(11), 7.

Bode, K. (2010). Publishing and Australian literature: Crisis, decline, or transformation?.

Cultural Studies Review, 16(2), 24-48. Retrieved from

http://epress.lib.uts.edu.au/journals/index.php/csrj/index

Chang, J., & Lewis, C. (2009). Loyalty in Media Sharing Websites: The Case of Universal

Music Group.Journal of Internet Business, (7), 21-41.

Chinomona, R., & Sibanda, D. (2013). When global expansion meets local realities in retailing:

Carrefour's glocal strategies in Taiwan.International Journal Of Business &

Management, 8(1), 44-59. doi:10.5539/ijbm.v8n1p44

Democratic and Politically Stable. (2013). Australian Trade Commission. Retrieved from

http://austrade.gov.au

Deresky, H. (2011).International management: Managing across borders and cultures (7th ed.).

Upper Saddle River, NJ: Prentice Hall.

Dyhr-Ulrich, A., Boyd, B., & Hollensen, S. (2012). Financial performance of entry

modedecisions: Effects of control in an internationalization context.International

Journal of Business & Management, 7(24), 12-28. doi:10.5539/ijbm.v7n24p12

Egelhoff, W. G. (1988). Strategy and structure in multinational corporations: A revision of the

Stopford and Wells model. Strategic Management Journal, 9(1), 1-14.

Comment [bjs12]: In APA format, first word of a title or subtitle, plus name

acronyms, are capitalized

Check all titles

Comment [bjs13]: In APA format, first word of a title or subtitle, plus nameacronyms, are capitalized


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Harvey, M. G., Novicevic, M. M., & Speier, C. (2000). An innovative global management

staffing system: A competency-based perspective.Human Resource Management, 39(4),

381.

Herbert, T. T. (1984). Strategy and Multinational organization structure: An interorganizational

relationships perspective.Academy Of Management Review, 9(2), 259-270.

doi:10.5465/AMR.1984.4277651

Massingham, P. (2013). Cognitive complexity in global mindsets.International Journal Of

Management, 30(2), 232-248.

Matthews, S. (2005, January). Trends in books and reading. APPREB. Retrieved from

http://www.accu.or.jp/appreb/

Moses, J. L. (1973). The development of an assessment center for the early identification of

supervisory potential.Personnel Psychology, 26(4), 569-580.

Multinational management staffing with American expatriates. (1971).International Executive,

13(2), 15-16.

Pager, S. A. (2013). Accentuating the positive: Building capacity for creative industries into the

development agenda for global intellectual property law.American University

International Law Review, 28(1), 223-294.

Scott-Ladd, B., Travaglione, A., Perryer, C., & Pick, D. (2010). Attracting and retaining talent:

social organisational support as an emergent concept.Research & Practice In Human

Resource Management, 18(2), 1-14.

Singh, J., Svensson, G., Wood, G., & Callaghan, M. (2011). A longitudinal and cross-cultural

study of the contents of codes of ethics of Australian, Canadian and Swedish

Comment [bjs14]: The first word in should be capitalized


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corporations.Business Ethics: A European Review, 20(1), 103-119. doi:10.1111/j.1467-

8608.2010.01612.x

Singh, J., Iglesias, O., & Batista-Foguet, J. (2012). Does having an ethical brand matter? The

influence of consumer perceived ethicality on trust, affect and loyalty.JournalOof

Business Ethics, 111(4), 541-549. doi:10.1007/s10551-012-1216-7

Strong Economic Credentials. (2013). Australian Trade Commission. Retrieved from

http://austrade.gov.au

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