BUSINESS DISCUSSION QUESTIONS 1
Discussion 1:Given the advantages that come with international diversification,reasons why some firms choose not to expand internationally isbecause of the extra costs likely to be incurred while setting up thebusiness and assumptions created by the nature of the internationalmarkets. Many of these firms have since become aware of it, and thusmost of them have decided not to expand internationally (Griffin &Pustay, 2013). For example, Walmart opting out of German market sinceits domestic success was built on high-volumes sales and streamlinedchannels of distribution, which did not fit the German culture. Also,the costs incurred were estimated to be over $1billion.
Advantages offirms are going international, position, where business regulationlaws are lax, include low-cost markets thus develop competitiveadvantage and better access to the raw market (Griffin & Pustay,2013). Potential risks include changes in government regulations,international conflicts, changes in policies, and governmentinstability.
Discussion 2:From an ethical perspective, the amount of information a particularfirm is likely to share with a potential strategic alliance partneris based on the potential risks when knowledge is exchanged, whichcould be used opportunistically by competitor partner (Griffin &Pustay, 2013). For example, when the largest consumer firm, MistTechnologies, entered China through a partnership venture withTechno-web Ventures, it was discovered the other partner had alreadycome up with a venture to produce similar products using the sametechnology its partner had shared.
Based one-Activity, both firms, Mist Technologies, and Techno-web Venturesshould use strategic alliances as a strategy towards meeting theiragreed-upon objectives while remaining independent organizations. Forexample, Mist Technologies, while entering China, should only provideresources for the distribution channels, but should remain with itsknowledge of the kind of products to produce.
Discussion 3:Ownership concentration is one of the internal governance mechanismemphasizes on individual investors owned stock and a larger blockshareholding with equity ownership of the firm in question. Boards ofdirectors are individuals elected to overrun the firm while executivecompensation is important when considering the evaluation of aninvestment made a firm(s) (Griffin & Pustay, 2013). The possiblefourth mechanism includes management oversight. For example, a firmmay be entangled in the firms` corporate governance conflicts, whichthe firms will have to combine controls, guidelines, and policies,which will aim at convincing the stakeholders and board of directorsover solving existing wrangles.
U.S-basedcorporations could apply these elements of corporate governancepractices by using them to identify and ensuring rights distributionsand responsibilities within the corporation by ensuring proceduresand rules are applied and making decisions for the corporates andfirms (Griffin & Pustay, 2013). Specific examples in the U.Sinclude MCI Inc. and Enron firms whose regulation of corporategovernance ensured they maintained political and public intereststhrough the restoration of their confidence.
Discussion 4:Best Buy is likely to face challenges due to its rapid growth rate.These challenges include financial crisis and failure for Best Buy toimplement regulatory reforms for governance (Griffin & Pustay,2013). These two challenges are considered corporate governanceissues because other challenges are likely to be felt through thesame governance.
I would recommendsolutions for Best Buy as a way to solve these challenges. First,Best Buy`s board of directors should provide oversight over thefirm`s financial situation should come up with a long-term financialsustainability. Management oversight should increase visibility overcorporate governance of the range of issues.
Discussion 5:The current Dominos` organizational structure is a perfect fit forits corporate strategies. It is because the firm`s organizationalstructure includes new faces that have helped turn around decliningsales. The structure now comprises of marketing guru, salesexecutives, and shareholders more focused on organizational growthand long-term aspects of the main business.
Alternativestructures most appropriate for the Dominos include the need fororganizational audit before coming up with a proper strategic plan.Since Dominos is within a segment that undergoes changes more often,the structure will thus help while entering the new market, forexample, Europe, which is very different, and thus the strategic planwill have to be reviewed more often (Griffin & Pustay, 2013). For example, Dominos` strategic plan while entering a completely newmarket, the business could become more aggressive in the currentmarket towards the impact on the stakeholders. Also, another example"Pizzas` turnaround" is a benefit following an adoptedstructure by many consumers in the market.
Discussion 6:Strategic controls refer to the use of strategically and long-termrelevant criteria by the corporate-level managers while financialcontrols are tools used by the managers to satisfy different aspectsof their roles (Griffin & Pustay, 2013). In comparison, the twocontrols show progress in specific areas within the corporation. Forexample, during strategic planning, measurable goals are defined bythe management, while financial controls dictate corporateoperations.
As a strategicleader, I would feel more ethically responsibility for establishingthe firm`s human capital. This is because the total of anindividual`s ethical feeling used to cover the firm`s goals andobjectives. The firm`s human capital established artificialintelligence, and my position as a strategic leader would beconsistent with it with other strategic leaders, today.
Griffin, R. W., & Pustay, M. W. (2013). Internationalbusiness. Upper Saddle River, N.J: Pearson.