Introduction
It is indeed important for any business entity to engage in the global market so as to strengthen its production capacity and also improve its efficiency. However, the decision to go international should be motivated by an organizations vision, mission and objectives (Martin, 2012). Various factors such as culture, business growth, production costs, profit-making opportunities, competitive advantage, availability of labor and resources should first be taken into account (Beamish, 2003). The paper will focus on SterMexicana an American-Mexican joint venture that was established in Guadalajara, Mexico. Sterling Metal’s primary objective for investing in Mexico was the desire to improve its overall operational efficiency and reduce labor costs. Unfortunately, the business experienced low productivity due to poor business strategies.
Mistakes Made by Ted While Managing SterMexicana
Ted undoubtedly committed many mistakes in his management of SterMexicana. First, he had handed over the responsibility of running the plant to Manuel despite the fact that he was the plant manager. Even though he assumed his role later, much damage had been done hence productivity decreased. He had a duty of overseeing all the company’s operations as the plant manager. Also, Ted did not take the time to learn the Mexican culture despite it being different from his culture. He argued that business efficiency was not a cultural issue. However, Ted should have identified with the Mexican people through learning their culture (Martin, 2012). Additionally, Ted underestimated the importance of establishing good business relationships with his suppliers. Ted also made critical decisions without consulting other stakeholders. Some of the decisions include: firing some employees and the introduction of an incentive pay system. Ted did not make follow-ups about the recommendations he made hence he failed to realize that the suppliers had not implemented the participative approach system of decision making.
Whether Manuel is Responsible for the Difficulties Presented
Inasmuch as Ted made mistakes, Manuel was also responsible for some of the difficulties that surfaced in the business. Manuel did not give much regard to the business deal and spent hours discussing sports, history and politics at the expense of the critical business matters. Manuel should have acted steadfastly when he was left to run a business. Manuel would have incorporated appropriate business strategies in an attempt to enhance efficiency (Beamish, 2003). Additionally, Manuel failed to disclose the difference between the Mexican law and the US law. Consequently, Ted fired some employees oblivious of the fact that the Mexican law required that they were given a severance pay. Manuel also exercised insubordination and favoritism. For instance: he did not fire some five employees as instructed because they were his close relatives. Leaders in any business entity should exercise fairness and respect senior members of staff.
What Ted Needs To Do So As To Correct the Situation
Ted should come up with sound business strategies that will increase production levels. He also needs to motivate the employees by offering increased salaries and promotions on merit. Ted must ensure that the participative-approach method of decision making is fully implemented. Ted should undertake a performance evaluation exercise regularly in order to determine employee competence and suitability for the job. Ted should also provide Leadership training programs so as to increase the management’s potential. Additionally, Ted needs to consult all the relevant stakeholders while making decisions. Ted must ensure that employees have the proper training and skills so as to improve efficiency (Martin, 2012).
Conclusion
It is, therefore, imperative for business persons to have an in-depth understanding of the business environments of countries in which they intend to set-up businesses. Additionally, the business managers must learn and appreciate the cultural contexts of doing business in other countries. Finally, Ted’s family including Kim should have a positive attitude towards the Mexican culture that way; it will be easier to learn the culture. Further, Ted must incorporate creativity, innovativeness as well as technological advancements in order to increase efficiency.
References
Beamish, P. W. (2003). International management: Text and cases. New York: McGraw-Hill Education - Europe.
Martin, J. S., & Chaney, L. H. (2012). Global Business Etiquette. Santa Barbara: ABC-CLIO.
