Managing Fujifilm Company in the Global Context - Case Study Example

Managing in the Global Context Introduction Fujifilm was established in 1934 in Japan out of a government’s venture to establish a domestic photographic film manufacturing industry (FUJIFILM, 2012). The decades that followed have seen it diversify in terms of its products, markets and global operations. In 2006, the company shifted to a holding company structure, FUJIFILM Holding Corporation, which controls the groups’ two largest companies Fuji Xerox Co., Ltd and the FUJIFILM Corporation. It has a strong global presence with operations in Japan, USA, UK, China, Russia, Turkey, Hungary, Germany, India and the Middle East. Fujifilm serves different markets including medical, graphic, film, optical, recording industry and the industrial sector. This kind of diversity demonstrates the different business environments that the organization has operated in. Analysing the different business environments exposes the demand for managing practises that will match the challenges of globalised dynamic markets. Managerial processes in an organization are impacted by the business environments it operates in and countries have different business environments especially the social cultural and legal political environments. Therefore, “leaders need to understand the facts about different countries and cultures, business procedures and local information about customs and practices both in a social and business perspective” (“Acquiring a global leadership mindset” 2010 p. 28). This paper explores the global strategy of Fujifilm since its inception in 1934. It identifies the different social cultural and legal-political environments that Fujifilm has operated in. The analysis exposes the differences of a work environment in each of the national contexts with an emphasis on the decision making process and approaches to work and motivation. Furthermore, the paper discusses the appropriate management practices that are likely to lead to more motivated employees and high performance in each of the national contexts that Fujifilm operates in. Social Cultural and Legal Political Environments of Fujifilm The external environments in which organizations exist in affect their overall context. Among them are the social cultural and legal-political environments. A social-cultural environment is denoted by the demographic characteristics, values and the customs of the society in which an organization operates. The social cultural elements like norms, behaviours and beliefs that people hold also contribute to demand on products. This environment impact on the products and services produced and also the kind of standard that the society upholds. Other elements that denote social cultural environment include; language, aesthetics, education, religion, superstitions, attitudes, values, material culture, technology, social groups and organizations and business custom practices. All these elements determine the way people think, live and work. On the other hand, the legal-political environment has to do with government regulations and the kind of relationship that exist between an organization and the government. The legal framework defines what is allowed and what is not allowed. Organizations cannot operate beyond the legal framework of the countries in which they operate in. Mergers and acquisitions in some countries are not allowed because there is the fear that conglomerates put small companies out of business. Political stability is a very important factor as countries determine whom to trade with and who not to trade with. From its inception Fujifilm has operated in the Japanese legal political environment since it was established based on a government plan. The legal political environment has evolved through the decades; the way the government operated in the 30s is not the way it operates today. Japan’s legal political environment is controlled by its government formation – constitutional monarchy. Its legal laws are a replicated after the European laws with some American and English influence. The government follows bureaucracies in its dealings and this reflects on the way organizations form policies and acquire business clearances. Modernization and globalization has since impacted both the social cultural and legal political environments of Fujifilm in Japan. Smith (2012) observes that modernization, westernization and globalisation have influenced both environments in apparent ways. From Japan, Fujifilm has diversified its global presence in different countries. Each country has a social cultural as well as legal political environment. There are two broad categories of environments; the West and Asian environments. Western countries include Europe, USA, and Hungary while most of the other international countries are in Asia, such as India, Russia and China among others. Fujifilm has had a heavy presence in the United States. In 1965, the Fujifilm U.S.A was established in New York which would manage its businesses in North America. Later, it acquired shares in Chiyoda medical Co., Limited. In 2004, there was the merging of the Chiyoda Medical Company into FUJIFILM CO. LTD. Still in the same year, FUJIFILM Battery Co., Ltd was merged into the FUJIFILM AXI Co., Ltd. In addition, it also acquired the microelectronic materials of Arch Chemicals Inc. based in the United States to form the FUJIFILM Electronics Materials. It has had activities in the medical sector through activities in the radiology information systems. It acquired the Empiric Systems and the FUJIFILM-RU which is a distributor of medical imaging products. All mergers and acquisitions are determined by government regulations and political stability in a country. Europe has also has a fair share of Fujifilm’s presence. The organization established Fuji Photo Film (Europe) GmbH in Dusseldorf, Germany to manage business in Europe. It also set up FUJIFILM Manufacturing Europe B. V. Still in Germany Fuji Magnetic GmbH, a recording media company, was established. Later it acquired the IP Labs GmbH for the online development of photo service. It has made several acquisitions in European countries; Acquisition of the German-based Eurocolour Photofinishing Company, FujiFilm also acquired the Sericol Group Limited based in the United Kingdom. The FUJIFILM Hungary Co., Ltd was also acquired and changed into a subsidiary (FUJIFILM, 2012). Asian countries also share Fujifilm’s international presence. In 1995, it established FUJIFILM Imaging System in China. In 2008, Fuji Film established a subsidiary in India – FUJIFILM India Private Limited. It has had its activities in the Middle East which started with the establishment of the FUJIFILM Middle East FZE subsidiary. In addition, it acquired the Turkish Agency for Endoscopy products. The social cultural and legal political environments that Fujifilm has and continue to operate in have an impact on the managerial practices like the decision making process and employees’ approaches work and motivation. Different Work Environments on Approaches to Work The social-cultural issues play a role on the feelings workers have about their jobs and the organizations they work for. This has an impact on their approaches to work and motivation. An attitude towards work is important since it is a determining factor to productivity, job satisfaction, morale and motivation. The approaches to work and motivation in the work place are different in different countries. Huo and Glinox (1995) note that there is an assumption by managers from Western countries that managerial practises that have succeeded in the West can be transferred to other countries. They however assert that “Even if a human resource practice is transferable, the costs of implementation and the chance of backfire could be so high as to wipe out all the potential benefits” (Hou and Glinox, 1995, p. 3). In essence, the success of human resource management is anchored on the degree to which it amalgamates the beliefs and values of the host country. Human resources practices are different, from the selection process to rewards and approaches to work. For instance, the reward system in the Asian countries cannot be compared to that of the Western countries. In the US and European countries, the reward system is sophisticated and a there is a variety of the way rewards are tailored to motivate employees. Pay, for instance, is not a big motivating factor in the West unless it is a huge one. On the other hand, since most people in the Asian countries are still inadequately paid, pay for them would be a significant motivating factor. Western workers have expectations of equity at the work place and suppose that their government legislation should intervene in cases of exploitation in the work place. The way organizations formulate policies and structures to meet the needs of the people reflect on equity in the work place. The legal political environment and the social cultural environments determine how the organization incorporates the employee expectation in the formulation of their work policies. Issues like working hours, benefits and the work environment will contribute to the attitude employees have on work. There are core values in the American culture which could impact on both decision making and approaches to work in Fujifilm. Individualism, which has an emphasis on personal achievement and individual initiative, would reflect on levels of motivation and approaches to work. Language is another element of the social cultural environment. English could be appropriate in most western countries. However, in the Middle East and other Asian countries, there is the need for employees who can speak the local languages in order to serve a wider clientele. Furthermore, America and European countries have a more liberal religious culture as compared to the Asian world. Although, it would be important to consider some religious elements like the days of worship and personal religious convictions for these employees, it does not carry as much weight as those in the Asian countries. The social cultural setting in countries like Dubai is heavily Islamic. In effect, the extent to which the employees’ religious convictions are respected would determine their approach to work and also their motivation. For example, although Sunday is considered a weekly holiday in many countries around the world, in Islamic countries, it is Friday that is treated as a holiday. In effect, managers should be flexible with different employees. In Russia, the Russian labour code is the bedrock of the labour relations that define employee rights. The normal working hours is eight hours each day and basically they are given an hour’s break. Overtime is well addressed in the Russian Labour Code which requires employees to give a written approval and they should be compensated at an increased rate for overtime. An employee in the Russian subsidiary would have a positive attitude towards work if his/her employment rights are respected. Therefore, the legal political elements like what is allowed by the government in terms of work and labour laws would impact on the approaches employees have to work. Similarly, social cultural elements that determine the way employees think, act and live will greatly influence their approach to work. Different Work Environments on Decision making process According to Seth (2003), the legal political environment affects every aspect of the business in a country. The government determines the laws, policies and regulations that organizations should abide with. It also sets the property laws as well as labour regulations that organizations are governed by. On the same note, the political movement have influences on “the prevailing attitudes toward foreign corporations and result in new regulations” (Seth, 2003, p. 142). The nature of political ideology characterises a government. Fujifilm business environment is exposed to the democratic and liberal United States, federalism in Russia, Chinese communism among others. People tend to make decisions according to the political ideology they subscribe to. Management of the decision making process in a multinational company should include all these ideologies and how they affect their decisions. This will determine issues like social justice which in turn reflect on the decision making process. According to Seth, “political factors in a country include: political stability, the predominant ideology toward business (and foreign business in particular), and the roles that institutions have in the country...” (2003, p. 158). These factors impact on the decision making processes of an organization. Historically, some Asian countries are slow to implement gender equity especially in decision making. Women are known to serve the decisions that men make. However modernization and globalization has changed that view and women now take active roles in the decision making process. Women in the US would be more offended if they were segregated during organizational decision making, a situation that some women from the Asian countries may not have a big problem with. In the Japanese social-cultural environment, the people esteem principle of Wa – social harmony (Communicaid, Online). This implies that, in a case of decision making, the Japanese would rather avoid confrontations or conflicts. On the hand, the Americans tend to deal with conflict openly and directly and therefore they tend to oppose decisions they do not agree with and they would even criticise some actions. This is not reflected in most Asian countries where there is a cultural way of addressing, for instance seniors and expression may not be as succinct as in the case of Americans. Americans are egalitarianism and would embrace a work environment that upholds equality. This means that they want to be given a fare share of audience when it comes to decision making as well as participating in the organization’s work. In Germany, the society is strict on rules, laws and procedures. The people emphasise on facts and therefore the decision-making process focuses on analysis of information in a logical rather than intuitional manner. This means that knowledge and following of the rules on the part of the managers will reflect on the success of the decision making process. The decisions an organization makes are guided and guarded by the legal system in the country in which it operates. While most western countries enjoy a democratic kind of system, other countries like Japan have a monarchy while others like the Middle East are governed by federal laws with a heavy influence from Muslim laws. Therefore when making decisions whether at a national level of international level, it is important to consider that. Appropriate Management Practices Moran et al (2011) emphasize on the need of managers to be global people. They say that a manager should not only learn to respect people from other cultures and their way of life, but they should also be ‘worldminded’. They should not only learn the cultures from which their employees come from, but they should also know the legal political setting of the countries they are operating in. Managers working in different cultures and with people from different cultures are required to manage diversity. For instance, the Indian society is known for its caste social setting. This means that the managers from other societies working in the Fujifilm’s Indian office will be required to change their philosophy and become more open in recognizing and responding to those differences in a way to ensure maximum productivity and retention (Singla et al, n.d.). Another area of difference in the social cultural setting is in religion. As Singla et al (n.d) note, religious convictions, beliefs, rituals, customs and festivals differ in different groups. This means that managers who ignore the religious stances of employees as well as their customers could cause the organization some losses. Managers or employees who are to be moved to a different country, for instance from Japan to the US need to be prepared on culture shock. This is because culture shock could affect the employees approach to work and motivation as well as the decision making process. Communication competence in the managerial position is important since organizations’ communication success contributes to the decision making process and the approaches people have to their work. It is important to learn some of the cultural ways to communicate, for instance the use of gestures, tone of voice and giving timely messages (Moran et al, 2011). Seth (2003) says that managers should be able to manage the political environments in countries they that they have operations. This means being able to follow the customs of the country as well as “knowing the facets of the foreign country that must be monitored and which can be manipulated” (p. 158). Another area that could give the organization success is the knowledge of the motivations and goals of the host country. This would help the organization to determine the kind of products and markets to target. For instance, Fujifilm targets the medical field in the United States. Another managerial practice that is likely to lead to more motivated employees and high performance is research and development. One of the ways in carrying out research is to establish a feedback channel in which the employees in the different national contexts can speak out what they prefer. It would be easier to get employees views in the United States compared to countries like Japan. Cultivating a culture of giving feedback could improve the initiatives the company has in improving the employee motivation as well as in the decision making process. Giving feedback enables the people to learn to speak out what they feel without the fear of being victimised. The Fuji Xerox, one part of the Fujifilm Holding, uses the ‘Morale Survey’ to find out the employees’ attitudes towards their work, the company as a whole and the management performance (Fuji Xerox, 2012) Rewards are one of the most important factors in ensuring that the employees have the right attitude to work and increase their level of motivation. As earlier discussed, the way awards are appreciated is determined by the social cultural perspective of the person. Benefits such as medical benefits would be a good incentive in the United States, where medical care is financed by insurance, than in other countries. In china there is competition in the labour market and the competent people are competed for by the US and Europe-based companies (Fa, 2006). Professional advancement of the employees would ensure their retention in the company. Fuji Xerox has also adopted the strategy of hiring the local people in the countries it has operations in on short-term contract basis. This means that there is a continued flow of new talent and diversity. Conclusion The corporate strategy of an organization is influenced by the environments, both internal and external, in which it operates. Knowing the kind of environment enables the organization to tailor its strategy and operations in a profitable manner. The social cultural and legal political environment in which Fujifilm operated has a bearing on the way it tailors its operations. Since the organization has a heavy international presence, the managers are faced with a myriad varying social cultural and legal political challenged in their decision making processes and in people management. The knowledge of those influences, as Dunning and Luddan (2008) observe, will help them change their management practices to match the expectations and challenges that the different environment pose. Carrying out research and having a good feedback system is one of the ways that managers could exploit to stay abreast with the satisfaction levels of their different employees. In addition, training on culture as well as knowledge of the different national contexts will also contribute to more motivated employees and high performance. References “Acquiring a global leadership mindset: The new competitive advantage in the marketplace”, (2010) Development and Learning in Organizations, Vol. 24 No. 4 pp. 27 – 29. Dunning John and Lundan Sarrianna, (2008), Multinational Enterprises in the Global Economy 2nd Ed, Edward Elgar Publishing Limited, Cheltenham: UK. Fan, Ke, (2006) “How can multinational corporations retain their employees in China?” Ithaca, NY: Cornell University, School of Industrial and Labor Relations, Center for Advanced Human Resource Studies. Available at Fujifilm global, Corporate History, 2012. Available on : FujiXerox, (2012) Employment and Working Environment, Available at: Humphries Maria and Grice Shayne. (1995) Equal employment opportunity and the management of diversity: A global discourse of assimilation? Journal of Organizational Change Management, Vol. 8 No. 5, pp. 17 – 32. Huo Paul and Glinow Mary Ann, (1995), On transplanting human resource practices to China: A culture-driven approach, International Journal of Manpower, Vol. 16 No. 9, pp. 3 – 15. 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