Business expansion across national borders is a common practice in the present time. Through successful relocating to more suitable regions or areas, a firm can gain competitive advantage. The objective of corporate relocation is mainly to benefit from cheap and skilled labor, increase competitive edge and minimize production cost. The paper seeks to present the main factors that should be considered while undertaking business expansion and relocation, and the challenges likely to be encountered in Singapore.
Among the internal business environment elements that may affect the move are the investment barriers present in the country. The obstacles hinder trade development, business expansion and, therefore, limit profit margins. The barriers may include the measures taken by the private sector or public authorities which put restrictions on the market access of goods. High custom tariffs and formalities of customs that lead to unnecessary expenses hinder business, too (Needham, 2013). Technical regulations protocols that have discriminatory effects on foreign products or companies are other barriers in internal business environment.
Sometimes the presence of insufficient protection may pose a trade barrier, and unless efforts are put to eliminate it, it becomes an investment problem, too. Such incident may occur particularly when the rights and copyrights of the industrial property are not protected. Lack of trade guidelines that are clear and unambiguous is a common problem in most of the countries that have experienced investment issues. The regulations that govern how business is conducted in a state must always be transparent to the stakeholders including the business owners and the shareholders. Lack of clarity and transparency in the regulations causes a trade barrier hence hindering business progress and profit realization.
Foreign investment restriction is an investment barrier that may affect corporate relocation. Notably, the local content requirements and the technology transfer restrictions pose critical challenges to investment. The administrative pre-approvals are also significant limitations that cannot allow investment in a country and may affect corporate relocation. Another investment impediment is subsidizing domestic producers, especially the state owned enterprises (SOE) (Needham, 2013).
Obstacles in the International Environment
When moving to a new business environment, there are obstacles that one is likely to face. The barriers determine the overall performance and productivity level, which is the primary factor for the long-term success. Finding means to overcome them enables the business entity to register substantial sales volumes. The obstacles may present themselves in the form of limited market access, lack of ability to lower the cost and lack of availability of new skills and resources such as technology and raw materials. They constitute the resources and materials required to maintain production as well as their cost and supply in the region (Needham, 2013).
New labor cost is a significant obstacle that may be faced in a new environment. The labor productivity and availability are critical areas that the company is likely to grapple with in its first days of operation. Low labor cost may not be beneficial to the enterprise if the labor productivity is also low. Nevertheless, technology advancement is reducing the involvement of labor in production processes. Additionally, the new environment may present challenges concerning availability and cost of labor (Needham, 2013). The company may find low productive labor, high-cost labor or lack of it. Businesses relocate to areas with the economic certainty that reflects sound employment policies and growth. Such a region with the favorable business environment is Singapore.
Communication infrastructure is an essential factor for production. Lack of proper infrastructural development may pose serious threats to production. Wireless communication is changing the way business is conducted in the world like the invention of telephone influenced the yesterday's world. With the possibilities of advancement in wireless technology, most business deals are carried out using it. The company, therefore, must have a strategy to overcome challenges that are presented by the lack of communication infrastructure (Needham, 2013).
The business is also likely to face challenges in personnel training and skills. Since the Sunglasses Company will be new in the environment, it is likely that the workforce will not be conversant with the technological expertise and skills. The firm may be forced to educate its new employees on the specific functions and tasks concerning the sunglasses production.
Managing the Business Differently
International trade management is associated with more challenges than domestic one. The chances of achieving desirable results differ from one region to another. The business strategy must undergo alteration and change the management style while undertaking international business activities. For success, the Sunglass Company must incorporate global strategy. It usually involves exports, imports, direct investing, and license agreement.
The Sunglass Company will implement a new style of management while operating in Singapore. The factors that the firm has to consider in its management will determine its organizational structure. These aspects include function, product, and territory. The Sunglass Company will seek the services of competent and experienced managers. The directors' attitudes towards operations of the firm may range from geocentric, polycentric to ethnocentric. Diverse attitudes, society needs and language that define people’s culture make it difficult to have influence over the latter. The company will employ new tactics to manage the different cultural background of the clients.
Some of the specific new management strategies will include preparing expatriates for international assignments and maintaining ethics. The latter always poses a significant challenge to management strategy. What is viewed as ethical in one country may not necessarily be such in another state. By incorporating ethics into the new master plan for the strategy, it will assist to respect local traditions and human rights and determine what is deemed wrong or rights by the culture at hand. The Sunglass Company will also train the expatriates with regards to cultural adaptation, cultural profiles, logical information and the administrators’ role applicable to the business.
The relationship between followers and leaders is culture-specific. The employees’ expectations of their leaders differ from one country to another. In some cultures and states, workers expect less freedom while it may be opposite in other nations. Having such knowledge in mind, the Sunglass Company in Singapore will adjust its management so that it will correspond to the particular cultures behaviors and demand typical for the region of its operations. The changes will differentiate the new management approach as opposed to the domestic style.
Challenges of Managing New Employees
Most challenges in running new personnel come mainly from unstructured and poor communication. The best solution to the challenges, therefore, is always the application of fundamental principles of management (Tulgan, 2014). The problem of performance management will be faced by the company in Singapore when the productivity level will be required to be increased. Being a new business that is beginning its operations in a different environment, productivity, quality and momentum gain will be the priorities for the company in the beginning of its activities. There will be high chances of encountering challenges from the workforce regarding supervision of the mentioned aspects.
The company management will also experience issues with helping the workers to advance the basics of their work habits. The firm has its principles to which each employee has to adhere. These are the issues related to time management, interpersonal communication, general employee organization, and improving the problem-solving abilities (Tulgan, 2014). Personnel’s attitude to their work is known to affect their wellness, moral and human relations. The Sunglasses Company is likely to experience problems concerning the intangible part of the human performance. Employees’ attitude adjustment and personal problems are some of the challenges that will have to be overcome for the success of business operation.
Businesses deal with productivity challenges and market changes by moving to better areas. The problems that accompany such move are immense although they can be overcome by implementing the appropriate management strategies. Changes in technology and computing system have facilitated globalization and easy entry to the market systems. Successful business relocation to a friendlier environment regarding operational cost may provide the business entity with a competitive advantage over its rivals.
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