Management in a Global Business Environment- myassignmenthelp

Question: Discuss about theManagement in a Global Business Environment for Ford. Answer: Introduction While opening a new business in any country, it is very important for the management level authorities to consider all the factors related to the business and operations. The proper and accurate analysis of the Ground conditions of any new country gives a clear view of the opportunities and scopes that can be availed by that company in that particular country. Firstly, the following study is all about the challenges that are likely to be faced by an American Automobile Giant named Ford while initiating a business in India. Secondly, this study describes the different factors like political, economic and Technological factors that have the potential to influence the operations of operations of Ford Company in India. Thirdly it has also included the Socio Economic factors that has discussed about the lifestyle of Indian people in rural as well as urban areas. Finally, the thesis statement of this study is to analyze and discuss the impacts of different factors including Political, Technological, Socio-cultural and Economic of Indian society and market on the operations of Ford. Body Business Expansion in India The Ford Automobile recognizes that India is a very ideal market for opening a new business because of many favorable factors. According to Collings (2014), the fastest growing economy in the world, which is India, is likely to provide a great platform for the organizations from outside to stay and install their business. The influential factors like Political and Economic conditions are in favor of foreign investors in the current scenario as compared to the circumstances that were present earlier. Hill, Cronk Wickramasekera (2013) have stated that the new government in India has increased the Foreign Direct Investment for Automobile sectors in India have been increased to 89% under the reign of current government. In addition, the growth in urbanization and increasing trend of using private cars by people can provide a good market for Ford in Indian Markets. Political factors Ford has decided to expand their business on a global arena and India is among the many international markets that Ford is planning to enter. Mainela, Puhakka, Servais, (2014) opined that, in India, political factors comprise a crucial risk for a big brand like Ford that operates internationally. Political environment in India is volatile since changes in the Government are more often. This volatile environment can result in a massive disruption in the supply chain management system of Ford as well as their distribution network. This is a severe bad influence for a business that is entering a new market. As per CPI (Corruption Perception Index) in 2015, among 178 countries India has ranked 87th rank in transparency, facing a demotion from rank 84. Ford can get an idea about the degree of corruption prevalent in India from this perception and business analyst of Ford can recommend the formulating of an appropriate business strategy that is needed to be followed by Ford to survive in such turbulent and corruptive political environment (blog.euromonitor.com, 2017). It has been acknowledged that a comprehensive and convenient system of taxation prevalent in a country promotes exponential growth in local, emerging as well as international business. As supported by OECD (2017), effective and on time implementation of Goods and Services Tax (GST) in India, have assisted the investments, competitiveness as well as significant growth in economy. However, as mentioned by Sarasvathy et al. (2014), rate of corporate income tax are being reduced by the Government that can hamper the infrastructural requirements. All these factors related to tax system prevalent in India can are considered by Ford prior to enter the Indian market to modify their business policies as per the taxation rules. Government of India has recently focused on eco friendly as well as fuel efficient cars to be operated in the country. In this perspective, entry of Ford in the Indian market can be profitable for the organisation as they produce cars that require less fuel. Thus the company has a great opportunity in gaining support from the prevailing Government that would greatly impact on profitability as well as revenue of the entity. However legislations in India have a great impact on the international business that is operating in India. Cheng et al. (2014) mentioned that Companies Act, 2013, subjects to provisions that are related to acquisitions and mergers, CSR and shareholding of the international business operating in India with the local and national business entities. Ford needs to be prepared to face such consequences on entering the Indian market as they operated as an independent organisation in US. In addition to this, fiscal policies that are prolonged by the Indian government results in improvement of macroeconomic framework, sustainability, opening up of economy, overall improved health outcome in terms of business (Amritt, Inc., 2017). Ford will be able to acknowledge the outcomes of their business operations on analyzing the effect of these policies. Economic Factors As far the economic conditions of India is concerned, the country is growing at a tremendous rate of 7.8% which is even greater than the Republic of China that used to be at the top position (Wild, Wild Han, 2014). It can be said that the Automobile market of India has also been growing significantly. The Make in India campaign that was started by the Indian Prime Minister in 2015 accompanied by raising the barrier of Foreign Direct Investment in Automobile sector of the nation has paved ways for many companies to start their business in India. However, Ambos Hkanson (2014) have argued that the tremendous economic growth of Indian Society has also resulted in the growth and inception of new Car Companies in India that have managed to make a strong hold in the Automobile Sector. This includes Tata Automobiles as well as Mahindra Auto. It can also be said that the inflation rates and Interest rates provided by Indian Banks to the people is of significantly economic value. As per Glavas Mathews (2014), the current inflation rate and interest rates for car loans provided in India is 1.91% and approximately 9.35% respectively. Therefore, Ford can introduce its new versions of family car at cheaper rates to attract the customers. Moreover, the labor and energy costs are comparatively low in India than in other countries. The actual figures keep fluctuating, but it is always less than other countries. As mentioned by Munyon et al. (2015), the average unemployment rate in India is about 4%. This includes a number of Engineering Graduates that are unable to get jobs due to lack of opportunities. Hence, it can be said that there can be number of candidates that will compete among each other for the opportunities will certainly allow the Fords Human Resources Management Department to choose the best and most potential people for the Jobs. It is to be noted that the World Bank made a statement in 2014 regarding Fiscal Policies where it has been mentioned that the weakening economies of major markets in the world can be the reason for business failure if a new investment is done in any country (World Bank, 2017). However, as per the Annual reports of Ford Automobiles, the Ford has managed to maintain a significant Operating Margin of 6.7% in its Automotive Segment (Corporate.ford.com, 2017). In addition, the Operating Cash flow has been quite considerable with nominal rate of growth despite having very strict fiscal policies in China. However, in case of Indian Societies, the Income Distribution does not exist in some specific pattern that will help Ford grow in India (Jr, 2017). Social Factors Social factors like the lifestyle of the community of the country influence the buying decision of the customers and affect the sales volume of the company like Ford Motor Company. In order to expand business in India, Ford Motor Company has analysed cultural trends and lifestyle of people in India. In India lifestyle of people is improving with an increase into GDP, people are tending to purchase four-wheeler. This ensures a large customer base in the Indian market for the automobile sector. Ford can grab this market opportunities in India by making a market entry in Indian automobile sector. In India, family size is maximum 4 which determine the suitability for selecting four wheelers. As argued by Monga, Chaudhary Tripathi (2012), According to PPP index India has 4th largest urbanisation that refers large potential customer base in India for Ford. In Indian society, the household income level is experiencing an upward migration that ensures a possible opportunity for Ford making a market entry in Indian automobile sector. It can be counter argued that among these high population most of the people are middle-class people who have less affordability of cars (Thestatesman.com, 2017). Another social perspective that Ford has to consider while expanding its business in Indian market is that in India the car price under USD 12000 is present in 80% (approx) of Indian market (Autocarpro.in, 2017). Thus, for this reason, Ford has to reconsider its pricing strategy, as social and cultural set-up the USA is different from India. People in India are highly qualified and discerning. Even they are much price sensitive and require the product to be value for money. It can be counter argued that Ford has to invest more funds to ensure both sustainability and cost efficiency for Indian customers (Thestatesman.com, 2017). As India is a developing country, economic complications are present that lead the customer to prefer company and small cars. The culture among Indian people is much environment sensitive thus, they require environment sustainability. Due to price sensitivity, people in India requires cars to be less fuel consuming that takes less cost for running. Instead of potential opportunities, the Ford can face two major hindrances due to social and cultural perspectives (Autocarpro.in, 2017). Technological factors India has made an exponential growth in the past few years in the field of technology. As per NASSCOM, the second most connected nation in the world after China is India (Techinasia.com, 2017). Consumer expenditure has been extended a lot and by 2020 it is expected that the country will obtain higher income, high unemployment, high convenience and optimum accessibility. Technology has also supported the enhancement in income of the people. Government has also initiated tax free zones, Special Economic Zones and Software Technology Parks in the country that will provide much assistance and a high technological environment to Ford, which is planning to enter the Indian market (Techinasia.com, 2017). However, Ford, being a US based organisation, is subjected to the most advanced technological activities. Soria Troisi (2014) informed that Ford will be facing a huge opportunity on entering Indian market from the technological perspective as they are coming from a developed country and operating in a developing country. Consequently technological maturity will be high. A possible challenge will be faced in the legislation, where IT Act, 2000 focuses on the e-commerce, e-business and new economy in India. Ford will be subjected to several compliances of the legislation. Among Indian automobile companies, the activities of R D lay more emphasis to ensure more technological advancement in terms of safety in four wheelers. In Indian automobile industry, the technological solutions have thorough integration in supply chain management. As argued by Monga, Chaudhary Tripathi (2012), the government of India is undertaking technological development projects like National Automotive Testing and RD Infrastructure Project in order to promote zero emission. As counter argued by Shende (2014), though with National Automotive Testing and RD Infrastructure Project government promotes automobile industry growth in India, it also sets the international standard for making a market entry in India. The advancement in technology also has ensured the use of hybrid cars and alternative fuels. Ford, in order to satisfy Indian customer needs, has to design hybrid car concept with technological advancements. As argued by Monga, Chaudhary, Tripathi (2012), cyber security also plays a significant role in analysing customers requirements and providing information about the cars to the customers. Hyundai, BMW and Maruti have already used the cyber technology for attaining maximum market shares in India (Thestatesman.com, 2017). Thus, it can act as a potential challenge for Ford to match the customer demand of technologically advanced fuel efficient, low cost and compact cars in Indian market. Conclusion After going through all the factors of business initiation in India, it can be said that the Indian Economy is likely to provide a very Good Market for the Ford Automobile. However, the company needs to make some advancement in its designs to provide some cheaper and family cars for Indian people. In addition, as the trend of using hybrid cars in increasing in India, the company can use this as a scope to expand its market further. However, maintenance of all the factors is important for the organization to establish their base in the new country. It should be the purview of the management to make sure that the policies and procedures that exist in the company should be in accordance with the laws of the new country. Ford may face challenges to deliver affordable sustainable vehicles to the Indian customer as demand by them. It will increase the manufacturing cost of sustainable vehicles. Ford has to invest large funding for establishing the sustainable industry in India. 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