How does a firm’s corporate strategy affect its operation management?
Corporate strategy, by definition, views the organization as a complete system which is known to be formulated of departments or functions which are interconnected and dependent on each other in such a manner that they aim to achieve the ultimate corporate goals (Krajewski & Ritzman, 2005). In other words, we can say that corporate strategy is a bigger picture which shows how inter-linkage about various departments or functions can result in the attainment of final aims and objectives. Operations management or operation strategy basically focuses on ensuring that the small tasks are carried out effectively which ultimately makes the achievement of bigger goals possible. Whenever corporate strategies are to be formulated, the operations management is consulted because operations team communicate the resource availability and production capabilities in the light of the overall policies and goals of the organization. In the absence of operations management, no organization can achieve its corporate objectives because in order to achieve objectives, sufficient resources are required and successful operations department can guarantee attainment. The corporate strategies of organizations also support the operations management department in the creation of competitive advantage. Operations managers have to ensure that the entire operations team coordinate to offer the best human resource, technology, financial sustainability and manufacturing or service facilities which are far better and advanced than those offered by competitors. We can simply say that corporate strategies also require the operations management team to look at the simplified tasks and complete them with efficiency and effectiveness so that they can contribute towards the achievement of goals as laid down in the corporate strategy.
What basic set of factors must a firm consider when selecting a location for a production facility?
There are several factors a firm must consider when selecting a location for a production facility such as:
Country Based Factors
A firm must ensure resource availability and infrastructure if it wishes to open up its production facility in another country. Usually, countries, where the cost of production is less, is chosen as production site by many successful organizations because it is obvious that the labor will demand less salary in exchange of their skill. Infrastructure is also an important requirement because if the basic facilities such as roads, electricity, water, and technology are unavailable, then the location will not be chosen for setting up a production facility.
Product Related Issue
Briscoe & Schuler (2004) mentioned that successful firms should ensure that the manufacturing site should be close to the point of sale so that the product does not take long durations to reach the customers. Setting up production facility near the point of sale not only eliminates transportation costs but also allow the customers to provide timely and accurate feedback whenever required.
Government Regulations
The rules and policies of the government are also considered while making production facility decisions because procedures of taxes and safety cannot, in any case, be ignored.
Inventory Issues
The decision of production facility can be taken by taking into account the inventory management strategy of the firm. If the firm decides to have a just in time inventory policy, then the size of the production site and warehouse requirement will be different whereas if the firm keeps sufficient raw or finished good in its inventory system, then the size of chosen location would be different.
Organization’s Objectives
Many times, the decision for setting up production facility is based on the ultimate objectives of the firm. For instance, if the firm’s core competency is linked to its low-cost structure, then the production facility will be set up in a location where the costs incurred are less. On the other hand, if technological advancements or innovation serves as a competitive advantage for an organization, then the production facility is meant to be advanced and technologically updated.
What issues are at the core of expatriation and repatriation problems?
It is a common practice in multinational organizations to send its talented employees abroad on special assignments. When the expatriates go abroad, the very first thing they experience is a cultural shock. The expatriates come from a different cultural and religious background and noticing a completely different culture in terms of language, traditions, and customs in a foreign country, they undergo serious shock. It becomes every difficult for them to mix up with work fellows of a foreign country. Sometimes, religious differences prevail more and the employees are unable to find the food (halal food in case of Muslims or vegetarian in the case of Hindus) to eat. It takes quite a lot of time and psychological effort to settle into a new location. When the assignment period is over, the employee is repatriated meaning, he is sent back to his country of origin where he again faces some kind of cultural shock. This is because the employee has made himself accustomed to the trends of a foreign country and when he comes back to the home country, it becomes difficult for him to adjust once again. Good organizations always realize this core issue and make sure that they offer proper training and counseling sessions to those who will be going to foreign locations for official assignments. Another possible issue faced by expatriates and repatriates is of currency exchange values. When expatriates are sent to a developed country from a developing or less developed country, they are offered a salary in the currency of the developed country which certainly improves their way of living and social status back home. When they are repatriated, they receive a salary in the currency of their home country which creates a psychological imbalance within the employee (Mendenhall, Dunbar & Oddou, 1987).
How does the degree of centralization or decentralization affect international staffing?
There are basically two types of organizations a) centralized and b) decentralized. Organizations which are centralized are those where there is a corporate headquarter and senior managers take all decisions related to all departments. Centralization is a conventional approach which has been replaced by decentralization, however, some government organizations or those which traditional objectives still follow it. When an organization is centralized, staffing decisions are stringent in the sense that managers are usually hired from a home country which ultimately restricts innovation and growth measures. On the other hand, when an organization is decentralized where every department or office location has the authority to make its own decision while taking into consideration the ultimate corporate objectives. When an organization is decentralized, it hires employees from all over the globe so as to maximize the chances of growth and success. When every department makes its own decisions, the employees tend to feel motivated and generate positive results.
References
Briscoe, D. R., & Schuler, R. S. (2004). International human resource management: Policy and practice for the global enterprise (Vol. 5). Psychology Press.
Krajewski, L. J., & Ritzman, L. P. (2005). Operations management: processes and value chains. Prentice Hall.
Mendenhall, M. E., Dunbar, E., & Oddou, G. R. (1987). Expatriate selection, training and career‐pathing: a review and critique. Human Resource Management, 26(3), 331-345.
