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Case Study Analysis

Chiba International Incorporated

Introduction

Globalisation is a term frequently used by many but is vaguely defined. One finds trouble in even finding two authors who defines globalisation in the same, exact way. But even that being the case, there is no denying that global markets, in particular emerging ones, offer attractive potential. For many organisations it is the only approach for growth as existing markets mature with few chances for profitable opportunities. As global markets open through the increasing use of the Internet and with improved supply chains, it is likely that there are many untapped segments around the world that would open to a multinational company, regardless of the industry. More and more, the world is becoming an available global market place. To stop marketing activities at ones home-base borders is not only arbitrary, but also short-sighted. International marketing is often defined largely in terms of the level of involvement of the company in the global marketplace, and export, multinational and global marketing are most widely considered. Multinational enterprises (MNEs) develop international marketing strategies in order to improve corporate performance though growth and strengthening their competitive advantage. However, MNEs differ in their approach to international marketing strategy development and the speed and the progress they make in achieving an international presence.

Due to the move on globalization, many countries adapted management styles that are unique to their setting and also unique in bringing effectivity and efficiency to the company. This paper shall tackle the management models adapted

by the Japanese entrepreneurs and its difference and similarities to the business models used in the United States of America.

The different strategies in different markets helped the company have an initial feel of the different markets. The different strategies also helped the company have a better understanding of how the market works. The different markets help in introducing to the company the cultures and characteristics of the markets thus it became educated with how to adjust in the different setting. Lastly the different strategies helped in making sure that the company encounters lesser problems while starting up a new market. By using different strategies the company has not committed anything that will give it more problems. In developed countries it is somewhat easier to enter because they usually have fully developed

communications, distribution and transportation systems, to name but a few facilitating factors. In contrast, developing countries require a more flexible approach, since they tend to be more jealous of their national prerogatives and less advanced in their infrastructure. But their sales potential is, nevertheless, quite substantial. It can be tapped successfully, if the MNE is willing to adapt.

Differences Between the American and Japanese Cultures

Basically, the Japanese and the Americans have differences in how the company is run. One basic difference is that Japanese practically prioritizes the company above all else. For example, in the case study, it was mentioned that Japanese employees spend more time at work rather than come home at an earlier time. However, Americans leave work at work. Furthermore, Japanese have the tendency to give too much for their employees, rather than their own personal gain.

General Differences

According to (2006), the most successful global businesses are aggressively building their global strategies around these themes: (1) increased market access because of the opening up of markets in China, Central and Eastern Europe; (2) increased market opportunities because of the deregulation of many markets, such as the financial market and privatization of state-owed utilities; (3) greater uniformity pf industry standards, encouraged, for example, by the European Union; (4) sourcing of products and components initially, but more recently services, too, from a wider range of countries, particularly those emerging markets with a high ratio of skills to cost; (5) more globally standardized products and services, particularly in areas of new technology, but increasingly in more culturally sensitive product areas, such as food; (6) common technology used in many more markets, particularly in areas of information technology, when there is a high cost of research and development that must be recovered through sales in many countries; (7) similar customer requirements leading to transnational customer segments, resulting from increased communication and travel; (8) competition from the same organisations in each major market and thus interdependence of markets; (9) global organisation strategies that increasingly treat the world as one market, among several other themes.

Marketing is a universal activity that is widely applicable, regardless of the political, social and economic systems of a country. However does it nor mean that consumers in all parts of the world must or should be satisfied in exactly the same way (). This is largely the effect of globalisation to the formulation of international

marketing strategies, the insertion of the adaptation of such strategies to the particular country in which the MNE operates. Consumers from various countries are significantly different due to varying culture, income, level of economic development, and so on. Therefore, consumers may use the same product without having the same need or motive, and in turn may use different products to satisfy the same need. The quality of management processes explains why some global marketing strategies fail while others succeed, contrary to conventional wisdom that management processes for global marketing should not be highly centralised and standardised since not enough attention is paid to the inputs of local management and the learning process across the different markets. Some studies investigate the linkages between standardisation of marketing and other functions such as sourcing, manufacturing, research and development, and find such linkages to be important. The ability to carry out global marketing strategies also depends upon comparative management attributes.

Successful operations and resolution of company- and industry-specific problems depends on forging good relations with the government with which the airline is operating under, using joint ventures and large sized investments and on long-term presence in the country. This is one legal responsibility of Boeing, to follow country or area soecific impositions on the airline industry by different governments. Foreign firms had to conduct normal business operations in a politicized and bureaucratic environment. The safety of their passengers is also a legal responsibility since this would reflect on the capability of the aircraft used. When a plane crashes by accident without any outside manipulation, for example, it is almost always to be taken as a legal responsibility of the airline. Most often, the airline involved would have to pay whatever compensatory damages arise.

The government can influence companys strategy by imposing laws and legal restrictions. Business has never been fond of government's having an activist role in establishing the ground rules under which it operates, but then organizations have no choice. Government regulatory actions can often force significant changes in industry practices and strategic approaches. And it is a companys legal responsibility to follow government regulations. In some instances deregulation has proved to be a potent pre-competitive force in many industries including the airline industry (2003).

Asian business models are usually centered on traditions and family ties. Though Asia has long moved out of its traditional and feudal history, it is still quite evident in their business practices that they have not quite overcome these experiences. This paper aims to discuss these practices and their relation to modern business practice.

Communicational Differences

Japanese

The organizations will be responsible for the flow of knowledge and its management in relation to its organizational context. It argues that knowledge management is not just computer and information systems; it embodies organizational processes that seek to augment the creative, innovative capacity of human beings as the process is essential for activating a knowledge base culture in

modern organizations on how to transform knowledge creating cultures by means of designing the right structure in which information sharing, learning, and knowledge formation should be parts of the organizational norm. (1997) The state of the world of business is not only characterized by high level of uncertainty and an inability to predict the future, it has considerably changed in two important ways. First: knowledge work has become fundamentally different in character from physical labor, where intellectual capital counts highly and knowledge workers the people who have the knowledge are critical assets. Second: knowledge work is almost completely immersed in a computing environment (1997). These realities coupled with globalization, rapid technological changes and the need to constantly innovate and adapt the structure to create a knowledge base culture, have forced organizations to recognize the challenges affecting their future survival and strategic positioning.

However, while the issue of knowledge management is more easily applicable in developed countries that possess the required technical know-how and managerial capabilities, it is difficult to apply in third world countries because of different managerial and organizational problems. (1991;1993). As such, at a time when the development prospects of the developing Arab countries are increasingly linked to their managerial and organizational capabilities and the quality of their intellectual capital and work forces, addressing the issue of knowledge management becomes a critical challenge for organizations to enhance their competitive advantage in the global economy. Yet, it is still difficult to address the issue of knowledge management in Arab organizations because of several predominant managerial and organizational problems embedded in a bureaucratic organizational structure and corporate power culture (1980; 1991; 1993).

American

The extent to which an organization secures a "goodness of fit" between situational factors and structural characteristics will determine the level of organizational performance. For this reason, (1994) cautions that the surplus of technological choices, all of them costly and none of which provides certain solutions, requires careful analysis. The technologies must not be allowed to drive the development of the cultural shifts, but rather human needs must be at the center of such transformation. Knowledge management literature is not precise about how to handle cultural factors. (1994) Yet, management scholars have long associated a strong corporate culture with superior long-term performance. The theory is that culture can help create high levels of employees' loyalty and motivation and provide the company with structure and control without the need for an oppressive bureaucracy. (1999) argues also that before an organization adopts a knowledge management strategy, it must develop a knowledge creating culture, he constructs culture as consisting of beliefs and practices. With respect to the beliefs, it can be assumed that members of an organization have a belief in knowledge, although these beliefs differ across organizational boundaries (1989).

Effectiveness of Japanese Business Model

The Japanese business model can be beneficial and profitable for the company who chooses to use it. However, the results may not be immediate. It may still take time for the type of business model the Japanese company uses to sink in to foreign workers, especially Americans.

The success of the Japaneses business model is phenomenal. They have successfully infiltrated every country with numerous businesses ranging from clothing to food. It is because of the managerial strategy adapted that they have successfully managed and let their store flourish throughout the years. The Chinese business models main strength is that it assures profit in the part of the company. This would ensure the longevity and the strength of the company. Of course, profit may spell the betterment of the company thats why it is a major factor in the business. Furthermore, it assures the company of the loyalty of the employees, and the customers as well, since it makes quality the top priority. In the theory of CSR, or Corporate Social Responsibility, it is stated there that a company has social obligations to its shareholders. It must incorporate in its goals the needs of its stakeholders. Firms are said to follow the theory of Corporate Social Responsibility, taking into consideration not only the profit to be made, but also the best things for its stakeholders. Corporate Governance as was mentioned is the method of regulating and monitoring the behaviour and practices of the company. This idea may relate in many ways in the aspect of corporate social responsibility. Corporate Social Responsibility or CSR is one of the leading theories relating to corporate governance. The theory talks about the responsibility of the corporation, or any organization for that matter, to all its stakeholders, which comprises mainly of its customers, employees, etc. The theory mainly states that the organization should keep in mind the interests of their shareholders and not only the possibility of making higher profit.

Implementation of Japanese Practices

The Japan way of thinking cannot be easily taken in by an Anglo-American workforce, therefore, great care must be taken before any changes be implemented. In Chiba's case, they took it a step at a time, and was successful in the endeavor they chose to take. Japanese companies possess several characteristics that it can use as advantages.

Its ability to increase its funds and capital due to the sales of its securities. By selling its securities to the public, the company may be able to raise its capital and funds. It is the primary reason for its continual existence. Historically, it has been reported that it truly was very difficult for private firms to obtain such large sums of capital, so in order to do that, private enterprises resorted to the act of selling their securities to the public.

Japanese companies have the ability to issue their securities as compensation for members who render service to the company. Though private companies also do give out their securities as compensation, it is harder to sell the securities obtained in an open market. But in the issue of public companies, it is much easier to sell the securities they give out as compensation since their shares are already established by having fair market value, thus, making it virtually easier to sell.

Using ability as the prime judging value for employment and elevation. Since Japanese owned companies are not composed of relatives, usually, chances of elevating ones position are quite fair. As for the management, it is very advantageous for them since they have relatively large pool of candidates to choose from. The company need not worry about slighting a family member or

a non-family employee for that matter, since the ascension will greatly depend on the capabilities and achievements of the employee in question.

Conclusion

Therefore, one can conclude that, though there are many differences in the western and Asian business practices, westerners can learn a lot with Asian practices, especially Japanese. One maybe that there are aspects on the business approach that the Asian companies need to perfect. For example the part wherein the company only focuses on the profit made and often forgets the relationship to the customer and the shareholders.

But also, there are similarities between western and Asian business practices. Take for example the Japanese firms and western firms. Somehow, they have aspects that are of the same, more or less.

Due to the constant move to catch up with the highly industrialized world, business models must constantly be renewed and reviewed. This is not only for the betterment of the company, but also for the betterment of the economy worldwide.

Furthermore, an American firm can indeed learn much from Japanese firms. Japanese firms manage based on the founding values and goals of the company. Many factors are put in place of the values that should be there, in the context of American firm . Also, higher annual capital is attributed to Japanese firms rather than American firms.

Many attributes that were expected to be on the side of American firms are found out to be really existent in Japanese firms rather than American firms. This

attributes point out the weakness of the American firms. Due to the tyranny of the stock market, American firms have great difficulty in taking risks and developing things such as values. Often, the aim of the American firms is only to maximize profits mechanically, rather than focus on their stakeholders. Employees, being part of that, should be given more support and attention, and also should be treated as humans, rather than mere workers of the company. Japanese firms have overcome this obstacle by continually keeping touch with their human side, by giving out the proper incentives and treatment to the employees and also taking the theory of CSR and always referring to it. Also, keeping in touch with the founding goals and values are vital in keeping the humanistic side of the company. Since the global market is perceived to be dark and faceless, then the values that have been inculcated in every officer and employee will keep the identity and the warmth of th e company
throughout much of its existence.

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